Toy Story 3 offers many pleasures and not a little wisdom. I absorbed them with a shocking output of tears, both the laughing kind and otherwise. At one point, too, I raised my fist in solidarity, moved by the political philosophy voiced by Barbie (brilliantly played by Barbie). I liked Barbie’s quote so much that I put it on a t-shirt:

Fellow Bluebook geeks will notice that, despite its graphic fripperies, the shirt sports a proper legal citation. Scholars might take comfort in the fact that I crosschecked the quote against the junior novel version of Toy Story 3. Lawyers for Disney/Pixar must admit that my usage falls within the traditional bounds of the fair use defense to copyright infringement, and Hasbro cannot justly complain that the shirt’s use of “Barbie” violates that trademark.

Tyrants might not like the shirt, granted. But Barbie showed us what happens to tyrants. I won’t say more about that, here; just go see the movie!

UPDATE: Notwithstanding law and logic, Zazzle.com pulled the shirt almost immediately after I posted it for sale. I’m currently trying to correct the matter. Sorry for the inconvenience.

[Crossposted at Agoraphilia and The Technology Liberation Front.]

PFF Adjunct Fellow Mike Palage led this extraordinary discussion of ICANN’s origins, evolution and future with four of ICANN’s “Founding Fathers”: Milton Mueller (author of Ruling the Root), law professor David Johnson, ICANN’s first CEO Mike Roberts and then ICANN CEO Paul Twomey. In particular, the group discussed ICANN’s mission, governance structure, and accountability; the difficult issue of new generic Top Level Domain names (gTLDs) and trademark concerns; and ICANN’s future relationship with the U.S. government. Be sure to check out the handy ICANN Glossary on page 33. The audio can be downloaded here.

Here’s the transcript (PDF):

Google today unveiled the Data Liberation Front, a team of engineers in Chicago dedicated to ensuring that Google build “liberated products”—ones that have “built in features that make it easy (and free) to remove your data from the product in the event that you’d like to take it elsewhere.” We’ve spent a lot of time here warning about the dangers of Googlephobia, but now that Google has brazenly appropriated the TLF’s unique mock-Communist iconography, we’re starting to think that Jeff Chester and Scott Cleland may be right: Maybe Google really is trying to take over the world!

So we regret to announce our filing of a lawsuit in the Twelfth Circuit Court of Appeals to challenge Google’s infringement of our mark. We demand 50% of the $0.00 Google earns every time they “allow” users to port their application data out of Google to a competitor’s services! We will, of course, dedicate these royalties to the important project of educating and empowering users about how they can determine their own destiny online.

But seriously… We heartily agree with our Data Liberation Front comrades that users should be fully empowered to switch from one service to another online. This kind of competition is clearly the best protection for consumers in the Digital Age. Making switching easy should assuage not just antitrust concerns, but also concerns about how much privacy or security each web service offers to its users, no matter how big its market share: If you don’t like what a service offers, just take your data and leave! Who needs the government micro-managing the Internet when users have that kind of control?

Viva la (Technology) Revolution!

P.S. In case you haven’t seen it the Monty Python video we’re all riffing on:

http://www.youtube.com/v/gb_qHP7VaZE

My PFF colleague Mike Palage just released a paper about a series of recent applications for national trademark rights in terms that correspond to likely strings for new top-level domain names, or TLDs, (e.g., “.BLOG”). These attempts highlight just one way in which ICANN’s new generic TLD (gTLD) application process is likely to be “gamed.” But it is also a strategy to which some trademark holders may feel compelled to resort to defend their rights to that string. Unfortunately, it does not appear that ICANN is addressing these important public policy considerations. In fact, based upon some of the provisions in the proposed draft registry agreements, it appears that ICANN staff’s actions may increase, rather than decrease, the ambiguity that opens the door to such gaming of the system.

http://d.scribd.com/ScribdViewer.swf?document_id=17847370&access_key=key-17v70dtd7qa1zrmq3z6x&page=1&version=1&viewMode=list

The proliferation of Web 2.0 social media services has magnified the old problem of cyber-squatting: Every new service represents the possibility that someone else might claim your name, or your organization’s trademark, as a user name before you do! This problem is especially significant where user names correspond to vanity URLs, as with Twitter and, more recently, Facebook.

So I was intrigued to discover that the market is responding to this need: ClaimMyName (CMN) will take care of user registrations on 30 Web 20 services for $329 or on an astounding 300 services for $799. CMN is a “freemium” service offered by DandyID.com, a nifty free service that allows users to organize all their social media profiles for something like 390 services so that buttons for each service can easily be added to an author bio page on a blog, as we’ve done at the TLF. So if I really wanted to make sure that no one else registered http://<WEB2.0service>.com/berinszoka, or /techliberation or /ProgressFreedom, this service would allow me to do so with just a few clicks—at a price of either $10.97/service for thirty or $2.66/service for 300 services.

CMN is essentially a mini-Mark Monitor, the international company famous for protecting trademarks online—except that CMN facilitates self-help by users outside of trademark law: No registration is required; everything is done on a first-come-first-serve basis. Pretty cool.

Google has announced that it will soon begin allowing U.S. advertisers to use trademarked keywords in limited circumstances in text ads, much as Yahoo! already does.  Google currently allow advertisers to bid on trademarked terms as keywords that could cause an ad to appear, either next to Google search results or on a third-party publisher’s website.  That policy will not change, and is discussed here by my PFF colleague Sid Rosenzweig.  The new policy is focused on the text seen by users in ads themselves and applies only if the “landing page” (to which the ad links) is used by a reseller, aggregator or parts supplier to sell only products that are relevant to the mark in question, or if the page is used to provide impartial reviews or other information about the trademarked product.  The new policy does not apply to sites/pages that (a) facilitate the sale of counterfeit goods, (b) allow the sale of a competitor’s goods, (c) criticize the trademarked good, or (d) do not provide substantial information or a purchase option.  Despite these limitations and other safeguards, Google has been sharply criticized by some trademark holders and might even be sued (e.g., for contributory infringement).

I’ll defer to the real trademark lawyers to figure out whether Google is correct that its new policy falls within the bounds of trademark law (particularly the “nominative fair use” doctrine).  But since Adam Thierer and I have been involved in an ongoing defense of online advertising against those who would squelch it through regulation in the name of privacy concerns (not at play here), I think it’s important to highlight the potential benefits to users from this seemingly arcane policy change-and to consider what this episode says about online advertising generally.  I see three main benefits to consumers from the policy change that should be considered alongside the vitally important role that trademarks play in our economy in communicating reputational information.

First, Google’s new policy will allow consumers to find products more easily because advertisers will be able to offer more descriptive and therefore informative ads, mentioning what they sell by name. Looking for a Prada handbag?  You’d probably find the ads that appear next to your search results for “Prada Handbag” more useful if the text of the ad specifically mentioned “Prada”-and if, as Google’s new policy requires (to protect trademark holders), the landing page actually sold Prada handbags, and only Prada handbags.  You’ll currently see a few ads that mention Prada, reflecting the current policy, which allows advertisers to use a trademark in an ad text, but only with permission of the trademark holder.  But the new policy will allow any advertiser that meets the criteria stated above to compete for attention with ads that convey more useful information to users and that are therefore more likely to be clicked on.  This might particularly benefit the Long Tail of products and services, because it could help retailers of niche products advertise, particularly if those products are accessories to major brands.

Of course, Marxists have long argued that advertising is a dead-weight loss to society because it doesn’t actually convey useful information:  Ads just “manipulate” users, who are-the elites tell us-too stupid to tell the difference between what they really want and what they’ve been tricked into thinking they want (“false consciousness”).  Whatever one thinks of this argument, it’s pure hypocrisy to criticize advertising as being “information-poor” and also attack tools and policies that convey more information-in this case, the fact that the advertised page concerns a particular trademarked good/service.

Second, this policy change will allow the Long Tail of retailers & review/information sites to compete more effectively by letting users know they’re out there.  As anyone who’s ever started a business knows, perhaps the single greatest barrier to entry is simply the difficulty and expense entailed in building awareness among potential customers.  This is why effective, targeted speech is so vitally important to competition and the overall health of the economy.  Giving consumers more information means more small businesses will be able to break in to compete with entrenched firms by offering lower prices and higher quality (including on non-price factors like privacy).

Third, by raising the value of advertising, this policy change will create more funding for free content & services, both those provided directly by Google and those provided by third parties supported by ads sold through Google.  Obviously, Google wouldn’t be adopting this new policy they didn’t think it would allow them to make more money:  Allowing more descriptive ads means users are more likely to find the ads they see relevant and to click on them, which, in turn raises the value of ads sold by Google.  But contrary to what some Googlephobes might have us believe (based on the usual reaction to every Google announcement), Larry & Serge won’t just spend that new revenue on building a Clone Army to implement some nefarious scheme to take over the Galaxy.  I can’t disprove the Clone Army possibility any more than I can disprove the existence of the Easter Bunny, Sasquatch or Zeus, but if this phantom menace does exist (perhaps on one of Google’s planned floating data centers), our soon-to-be Digital Overlords are sure doing a good job of hiding it amid all the “free” (i.e., ad-supported) stuff they give away to consumers-at considerable expense:

• As I’ve written previously, two-thirds ($14.41B) of Google’s 2008 global revenue ($21.78B) came from advertising on its own sites, primarily the search engine. These sites and the dozens of its free services like Maps and Gmail aren’t cheap, altogether costing Google another $3.34B to support, including the enormous cost of its data centers (“cost of revenues”). Google spent $2.79B on R&D, much of which will lead to innovative new services for users. Of course, until the Clone Army can take over Google’s daily operations, someone’s got to keep the lights on (and the Cylons machines from rebelling)-so throw in another $1.8 billion for personnel, post-it notes, ethically harvested coffee and other “general and administrative” expenses.
• The remaining third of Google’s global 2008 revenue ($6.71B) came from ads sold on the “Google Content Network”: third-party publishers that sell ad space on their pages to advertisers through the AdSense auction system. Of that, Google paid out $5.28B (78.7%) to publishers, who used the money to support the content and services they give away to users-from simply paying hosting costs in the case of the smallest sites to, say, trying to keep cash-strapped newspapers alive.

Again, there is great value to protecting trademarks to minimize the possibility of confusion and fraud among Internet users.  But while this policy change is ultimately an issue of trademark law, it also highlights the benefits of improved online advertising for consumers.  If Google (and other ad networks) can increase the value of information-richness of advertising (and therefore its effectiveness and economic value) in a way that is consistent with the consumer protection purposes of trademark law, that’s something to be celebrated.   Sure, Google will benefit, but in this case, a rising tide will truly lift all boats.

If Google wants to minimize concerns about the automated process Google will use in deciding whether a trademark may be included in an ad for any particular page, the company could proactively address these concerns by providing trademark owners (and the third parties that monitor their online brands) tools that would indicate whether a particular trademark could be used in advertising a particular page.  This would alleviate the uncertainty of trademark holders as to whether their brands are at risk and allow them to call attention to inevitable shortcomings in Google’s algorithm, which will have to evolve constantly.  This would allow Google to keep its algorithms secret, but in order to prevent those who would abuse such tools from reverse-engineering Google’s abuse-detection algorithm, it would probably be necessary to restrict access to these tools to legitimate trademark holders and monitoring services.  How to implement that system might not be easy, but if anyone can figure that out, it’s Google.  I’ve applauded Google’s leadership in the privacy context, where Google has given users tools (the Ad Preference Manager and the Advertising Cookie Opt-Out Cookie plug-in) to manage their preferences about behavioral advertising.  I hope to see Google follow the same approach here:  addressing legitimate concerns through technological means in a way that maximizes consumer welfare.

Finally, it’s interesting to note here that Google is playing catch-up with Yahoo! here-just as Google lagged behind Yahoo! in introducing behavioral targeting, which has caused considerable privacy consternation.  As I’ve said before:

it’s no accident that Google was a late-comer to the [Online Behavioral Advertising] market, lagging behind Yahoo! in particular.  The most likely reason Google has taken its time in rolling out an OBA product is that Google is subject to a unique level of scrutiny by privacy advocates by virtue of its size.  Being the “big kid on the block,” Google has to be especially careful not to appear to be “Big Brother.”  This reputational check on Google should allay some concerns about Google’s size.

It seems Microsoft is facing much the same problem Pepsi faced in the 70s, when it created the Pepsi challenge (a blind taste test between Coke and Pepsi):

A stark sign of the challenge Yusuf Mehdi faces as a point man for Microsoft in the company’s battle with Google comes from the company’s own research into the habits of consumers online. During regular “blind taste tests,” in which Microsoft asks randomly-selected consumers to score the quality of results from various Internet search engines, the quality of Microsoft’s search results have so improved that people can’t tell the difference between Microsoft and Google search results, says Mr. Mehdi, senior vice president of Microsoft’s online audience business group. But when Microsoft slaps the Google brand name on the results from Microsoft’s own search engine during another portion of its tests, users invariably score them highest. “Just by putting the name up, people think it’s more relevant,” he says. … Microsoft still faces the problem of the strong association in consumers’ minds between Google and Internet search. In theory, it’s far easier for a consumer to switch Internet search engines than it is for them to switch other forms of software. But Mr. Mehdi–a veteran of the Web browser wars of the late 90s in which Microsoft managed to overtake the pioneer in the category, Netscape Communications–says in reality it’s very hard to convince consumers to change their search behavior.

So, Microsoft faces an uphill battle.  Happily for the Internet marketplace, it seems they’re embracing the challenge cheerily by attempting to kill two birds with one stone:  launching an innovative new semantic search engine capable of answering users’ questions more directly while also creating a fresh new brand for what Microsoft acknowledges is a “confusing jumble of brand names for its search efforts.”  I, for one am looking forward to Microsoft’s forthcoming search engine, dubbed “Kumo.”

But I think there’s a bigger lesson here:  Google’s most valuable asset is its brand. Sure, much of the strength of its brand may lie in the intangible irrationalities of human psychology:  Microsoft’s search engine will probably have to be significantly better than Google’s before the software giant can begin regrowing its 8% share of the search market.  However unfair this might seem to Microsoft, consider how Google reached this height of brand power:  by offering consumers a number of terrific products (for free!) and by carefully cultivating a reputation not just of coolness (think Google Lunar X-Prize) but of “Don’t be evil“-ness.  Many ridicule that motto and attack Google for trying to take over the world, as we’ve detailed in our ongoing Googlephobia series.  But consider what Google stands to loose by offending consumers:  the brand power that makes consumers keep coming back to its search engine.  Google’s reputation as helpful, cool and “non-evil” is perhaps just as valuable as Coke’s secret formula.  So why would Google risk throwing that away by offending real sensitivities about, say, its privacy practices?

Some might fear that the equation of the term “google” with “Search” could permanently entrench Google in a position of dominance in the search market (think “Kleenex” in the market for facial tissue).  Such worriers might be surprised to learn that Google actively discourages the “genericization” of the term “Google”—the use of “google” as a synonym for all search, just as Kleenex is commonly used for tissue paper, Xerox for copying and Coke for soda.  The reason?  Under trademark law, a company can lose its unique rights to its trademark if that term becomes sufficiently generic—a catastrophe for a corporation commonly referred to as “genericide.”  Thus, Google is actively working to check the very phenomenon that gives its products special appeal.

It’s by no means a perfect solution.  Microsoft, Yahoo! and others will still have to work extra-hard to overcome Google’s brand appeal.  But there is a certain elegance to the fact that existing laws provide some competitive check on the marketplace without the need for government regulation or an antitrust lawsuit.

I’ve been working closely with PFF Adjunct Fellow & former ICANN Board member Michael D. Palage on ICANN issues.  Michael had this to say about the ongoing saga of ICANN’s attempt to create new gTLDs.

During the recent ICANN Board meeting in Mexico City, the Board authorized the creation and funding of an Implementation Recommendation Team (IRT).  This team was to be comprised of “an internationally diverse group of persons with knowledge, expertise, and experience in the fields of trademark, consumer protection, or competition law, and the interplay of trademarks and the domain name system to develop and propose solutions to the overarching issue of trademark protection in connection with the introduction of new gTLDs.” This IRT is tasked to produce a report for consideration by the ICANN community at the Sydney meeting.

The IRT consists of 24 members:

• Chairwoman Caroline G. Chicoine; and
• Seventeen members; and
• Six ex officio members:  Four IPC-elected officers and two-GNSO elected Board Directors (Bruce Tonkin and Rita Rodin Johnston).  

I have a number of friends and colleagues serving on this team and I wish them well in their important endeavor.

I’ve previously proposed a number of rights-protection mechanisms that IRT should consider.  Today, I offer a few suggestions that I hope will guide IRT as they embark on their important work tomorrow.  In particular, I hope they’ll implement some of my suggestions intended to make the IRT process more transparent-so the rest of the global Internet can follow along with their important work and provide constructive input where possible.

I’ve gotten an unusually strong reaction to a TechKnowledge piece that went out today describing how the Nordstrom retail chain is capitalizing on a Patent and Trademark Office error to throw a small business under the bus.

Beckons is an organic yoga and lifestyle clothing business that Nordstrom is trying to force off of a trademark – or out of business. It’s owned by two businesswomen in Colorado who have done everything right to get a trademark, but now may have tens of thousands of dollars in legal bills to defend it. The short article is called U.S. Patent and Trademark Office: FAIL.

I wrote about it because I think it’s an outrage. People have written to me since I published it asking what they can do.

Well, there are a couple of things. The original error is with the PTO, so you can send a copy of the story or a link to your Member of Congress. The U.S. Patent and Trademark Office is within the jurisdiciation of the House and Senate Judiciary Committees.

But it’s Nordstrom that has really taken advantage of things. And you don’t have to beg for a politician’s help to bring companies to heel. Here’s a four-step plan for helping Beckons beat Goliath. Do one or all of the items listed below.

1. Send this page to all your friends. That’s probably the most important thing, because the more people doing the other things on this list, the better.
2. Write a letter to Nordstrom, telling them that you disapprove of their abuse of the trademark process, and that you won’t be shopping there until they mend their ways. Here’s the address for the president of the company. Blake W. Nordstrom, President Nordstrom, Inc. 1700 Seventh Avenue, Suite 300 Seattle, WA 98101
3. Print this page, copy it, and hand it out at Nordstrom. Or slip copies into the purses they sell – especially any with the “Beckon” label!
4. If you do yoga, or know anybody who does, shop at Beckons! (Be sure to send this along to friends who do yoga.)

So those are just a few ideas for getting Nordstrom to correct its abuse of the trademark process against this small business. Please feel free to put additional ideas or report on your successes in the comments. (Got a sample letter to Nordstrom, for example?)

A well-functioning marketplace requires assertive consumers – so assert yourself!