Copyright 2010, Blake, Cassels & Graydon LLP
Originally published in Blakes Bulletin on Intellectual Property: Social Media Series - Brand Protection, September 2010
Social media raise several new trade-mark challenges. While some would argue that Web 1.0 raised many of the same issues, there are others unique to, or treated differently in, the context of Web 2.0.
The New Paradigm
In general terms, the unauthorized use of a trade-mark, be it in print, broadcast or other traditional media, raises long-understood issues of trade-mark infringement, passing-off, and depreciation of goodwill.
In that respect, the unauthorized use of trade-marks is similar if, in the context of social media, a person uses a mark which suggests that it is the trade-mark owner or is licensed or endorsed by the owner. What makes social media different from traditional media is the way in which power and control over use of the trade‑mark can quickly shift from its owner to others.
In contrast to traditional media, with its high cost of paid advertising or other access to media that would display the trade-mark to large numbers of people, the cost to set up a blog or a page on a social networking site like TWITTER is negligible. As well, the ability to "go live" in modern social media is almost instantaneous.
While the phenomenon of unauthorized third parties registering domain names containing trade-marks of well‑known brand owners is not a new one, the inter‑connections of social networking sites and other social media exacerbate the effect on brand owners. For example, the use of a well‑known trade‑mark in conjunction with a video posted on a site such as YOUTUBE can go "viral" very quickly, resulting in a large number of visits to a particular page. Given the way the algorithms of some search engines operate, the large number of hits on that page may quickly cause it to leap to the top of Internet searches, based on the assumption that websites with the greatest number of visits in relation to a search term have the closest relationship to it.
There are many examples of how brand owners can start to lose control over their brands through social media. Whereas in the past, brand owners which were substantial businesses typically had the resources to control the media in which their trade-marks appeared, social media have effected a game‑changing shift.
A good example of the issues between brand owners and third parties involves the SCRABULOUS interactive electronic game, which appeared first in social media. SCRABULOUS had substantially the same board layout, rules and other indicia, such as the number of tiles, as the well‑known board game SCRABBLE. Worldwide rights to the SCRABBLE trade-mark were split between Hasbro, which owns the rights in Canada and the United States, and Mattel, which owns the rights elsewhere.
At one point, SCRABULOUS was the most popular game on social networking sites such as Facebook, with tens of millions of games played. The SCRABULOUS developers did not, and it appears never intended to, sell a tangible board game. The only manifestation of SCRABULOUS was on social media websites. The number of games of SCRABULOUS played in the relatively short period of time in which the game was available in social media exceeded the number of individual SCRABBLE board games sold throughout the many decades of their availability.
Hasbro negotiated with the SCRABULOUS developers with the view to getting them to take the game down. When negotiations failed, Hasbro sued. While the SCRABULOUS game was ultimately taken down and changed, the resulting publicity of Hasbro's attempt to enforce its intellectual property rights generated a firestorm of controversy. Fans of SCRABULOUS made viral videos in support of SCRABULOUS. Supporters threatened to boycott the other products of Hasbro and Mattel. Thus, in the social media world, the benefits of enforcing trade-mark and other intellectual property rights had to be balanced against the potential cost of harm to the brand owner's goodwill caused by outraged consumers.
In the past, an infringer who received a demand letter from a brand owner alleging infringement may have felt isolated. In the early days of the Internet, brand owners had to consider the possibility of a demand letter to an infringer in respect of domain names and websites being posted on the website. Web 2.0 takes this concern one step further as the recipient of the demand letter can "push" communications to the followers of multiple social media pages almost instantaneously. Now, where the recipient of such a demand letter feels aggrieved, there are instantaneous and free media for it to respond with its point of view.
Another situation where social media have an effect on trade‑marks relates to marks that run the risk of becoming descriptive or generic. Owners of trade‑marks that may fall into this category must be vigilant to remind people that the term in question is a trade-mark.
Historically, the owner of a trade-mark that risked becoming generic through common usage would advertise to remind consumers that the term was a trade-mark, not a common word. Brand owners would also often write to editors of reference sources such as dictionaries to object to "definitions" of their trade-marks or, at a minimum, to require an additional entry to point out that the word in question was a trade‑mark. With the advent of user-generated content, for example in reference wikis such as WIKIPEDIA, the "venues" at which a trade‑mark may become wrongly used or defined as a common term rather than as a trade‑mark are increasing. Whereas in the past, changes to dictionaries took a great deal of time, as definitions were revised infrequently and only after significant consideration and input, the definition of a term on Wikipedia can change overnight. The challenges for brand owners to educate the marketplace about the word in question as a trade-mark owned by them are increasing.
While traditional trade‑mark law continues to apply to social media, the overall shift in control of brands from brand owners to users is one of the significant impacts of social media. This shift is particularly acute for trade-mark owners since trade‑mark law is based on preventing confusion among relevant prospective purchasers, including consumers. In contrast to many areas of the law, how the public perceives a trademark affects substantive rights in the mark. Therefore, owners must be even more vigilant in protecting their trade-marks in social media.
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