H A R Y A T I D E E P A K A D V O C A T E S & S O L I C I T O R S § T R A D E M A R K A G E N T S 1 haryatideepak advocates & solicitors I trade mark agents.

H A R Y A T I D E E P A K A D V O C A T E S & S O L I C I T O R S § T R A D E M A R K A G E N T S1

haryatideepakadvocates & solicitors I trade mark agents

IP In The Digital Economy23rd February 2011

Deepak PillaiPartnerHaryati Deepak



Agenda Part A: IP & E-COMMERCE

Part B: CREATING WEBSITE

Part C: CHOOSING DOMAIN NAME

Part D: PROTECTING YOUR WEBSITE



PART A: IP & E-Commerce

Impact of E-Commerce on IP

Challenges Raised by the Impact of E-Commerce



Impact Of E-Commerce On IP

IP and Online Trade of Products and Services IP resides in the goods and services traded via e-commerce

IP is the main component of value in the transaction e.g. music, pictures, photos, software, designs, training modules, systems, etc

Value is destroyed by piracy

IP and Digital Technologies The systems that allow the Internet to function - software, networks,

designs, chips, routers and switches, the user interface, are all based on IP

These are protected by IP rights




IP and Online Branding Trademarks and domain names are fundamental parts of e-commerce

Serves as your business identifiers, branding, customer recognition and goodwill

More so than for traditional businesses

IP and Business Value The valuation of businesses that are related to new digital technologies

usually related to their IP

Valuations affected by the level of protection they place on their patents, copyrights and trademarks




Relevance of Patent Licensing in E-Commerce

Patents may be relevant to e-commerce as well depending on what has been patented

Important in the United States where software and business patents are recognised

Web-based businesses may be reliant on patented technologies that they are licensed to use.



Challenges Raised By The Impact Of E-Commerce

IP Protection in Software

Online Contents Distribution

Domain Name Issues



IP Protection in Software Various aspects of software are protected by different heads /

types of IP

Copyright One of the most used forms of IP to protect the various components of a computer program

Patent In Malaysia, software is (in most cases) not patentable; while in other countries inventions

relating to software may be protected

Trade Secret Source code of computer software can be protected as a trade secret

Industrial Designs Certain features created by computer software may be protected in some countries as industrial

designs, e.g. icons on a computer software



Online Content Distribution Illegal Downloads

Because of the ease with which digital files can be downloaded, unauthorized copying of content has been a major problem for owners causing massive financial loss

Violate national laws of copyright

Recent proposals by the Intellectual Property Corporation of Malaysia

As an e-commerce business, keep in mind: Importance of protecting IP rights on the internet

The need to obtain permission before usage of ANY third party content

Employees need to know company policies on IP



Online Contents Distribution - Case Study RIAA v Napster

The first case filed against a P2P system operator

Put international spotlight on unauthorized downloading of music files

The claim was that Napster facilitated illegal copying by users of the system, not that Napster copied the files itself

Lessons learnt: Make sure you have a clear policy against unauthorized copying of files, or any

actions that encourage or facilitate such copying;

Make sure that your employees do not gain access to or keep in their possession or on their systems any unauthorized copies of software or other content;



Online Contents Distribution - Case Study Lessons learnt (continued):

Make sure that all your employees know about the company’s policies against misuse of IP

Senior management should be responsible for reviewing company business practices on a regular basis to make sure that the policy is being followed. It is wise to assess situations in which a policy violation is found, to see if disciplinary action should be taken.

Other cases: MGM Studios, Inc. v. Grokster, Ltd - 2005

Australian Record Industry Association v. Kazaa - 2005



Domain Name Issues Failure to make an informed choice when selecting a

domain name Domain name may be available and registrable but may be in conflict

with trademark rights or personality rights of a third party

To take note of: IP laws vary from country to country. Which law is applicable may be in

question especially when it involves parties from different countries.

Enforcement of rights is tougher when IP rights are violated over the internet.



PART B: CREATING WEBSITE

Outsourcing Website Development

Web Developer Agreement – Salient Clauses

Using Third Party Materials



Outsourcing Website Development

Developing a web presence would be critical in participating in the digital economy

If your website is developed by your employees, the copyright over the website will usually belong to the employers

However, it is questionable as to who owns the rights when the website is developed by an independent web developer or is otherwise outsourced The situation in most other jurisdictions v.

The situation in Malaysia

Underlines the importance to have written Web Developer Agreement Identifying who owns each element of the website

To note the issue of cost



Web Developer Agreement - Salient Clauses Matters to consider prior to contracting

Clear, long term vision of market for your product or service

The agreement entered needs to reflect the needs of your vision

Scope of work Specifications of what is to be developed

Scope of Developer’s Responsibilities Writing Program Code, Design and Appearance

Registration of domain name by whom

Whether consulting services provided

Whether services include maintenance and updating of site



Web Developer Agreement - Salient Clauses

Ownership of Material Who owns IP rights in components created by Developer?

e.g. computer code, graphics, text, website design, digital files used for creating site

Who owns IP rights in material provided by you to Developer for use in website?

Where the Developer owns IP rights, whether you have the right to sublicense, edit, etc.?

Who’s responsibility to get permission from third parties for their IP?

Who owns the IP rights in the software which displays your website and related components?

Can developer use the same designs as model and license the software (and related components) for others?



Web Developer Agreement - Salient Clauses Warranties

Each party should warrant that it owns or has permission to use any material that it provides for the website and that contents do not violate any law or regulation

Maintenance and update Maintenance to include changes, updates, troubleshooting or repairs

Level of maintenance and price terms

Responsibilities of the Web Developer

Actions upon service interruptions and break downs



Web Developer Agreement - Salient Clauses Confidentiality

Divulging confidential information about your business and giving access to your facilities

Non-disclosure clause to protect you against unauthorized disclosure of your trade secrets

Liability Who bears responsibility for links to other sites, designation of keywords

and metatags?

Whose liability in the event of any legal claims for infringement etc?



Web Developer Agreement - Salient Clauses Other relevant clauses on :

fees and payment

timetable for delivery of website

Indemnification

disclaimers

limitation of liability

jurisdiction

applicable law

forum of dispute resolution



Using Third Party Materials The internet makes it easy to reuse / copy the materials

of others Films / television clips, music, graphics, photographs, software, text, etc

The availability of these materials is does not give you the legal right to do so

Should not use these materials unless you have the necessary consent License or an assignment

Technical Tools If you are using any search engine or internet tool for your website,

ensure you have a written license agreement before the installation of the site begins



Using Third Party Materials Software

Shrink-Wrap License: Packaged software is often licensed to you upon purchase. The terms and

conditions of the license are contained in the package, which is returnable if you do not agree. By opening the package, you are deemed to have accepted the terms of the Agreement.

Click-Wrap License: The licensing agreement is included inside the packaged software or on the

webpage from which you can install or download the software. Each time an end user install or download the software, he/she may have an option to agree to the license terms.

In all cases, check the licensing agreement to find out what you may and may not do with the software you have bought



Using Third Party Materials Copyrighted Works

General Written permission is usually needed for the use of any written material,

photos, videos, music, logos, art work, cartoons, original databases, training manuals, drawings etc. in its original form or found from the internet.

Collective Management Organization Written permission is usually needed for the use of any written material,

photos, videos, music, logos, art work, cartoons, original databases, training manuals, drawings etc. in its original form or found from the internet.

Moral Rights Ensure the author’s name appears on the work and the work is not used

or changed in a way that would damage the author’s honour or reputation



Using Third Party Materials Photographs

Care should be taken when using photographs on your website. Authorization needs to be obtained from the copyright owner of the photograph and the subject matter depicted in the photograph, if necessary.

Public Domain Material Instead of tracking down copyright holders, an alternative to consider

would be using materials that are in the public domain

Sources range from libraries, collective management organisations to online portals that offer licenses for different types of works

e.g. photos, backgrounds, logos

Also called clipart, freeware, shareware, royalty-free, copy free



Using Third Party Materials Trademark

When using others trademarks on the website, need to ensure usage does not create confusion as to sponsorships, endorsements etc.

Permission needs to be obtained from the copyright owner, if the law requires so.

Other likeliness In some countries, publicity and privacy laws are in place. Malaysia has

the Personal Data Protection Act 2010.

Before using any part of the copyright work, advisable to check the applicable laws and to request permission.



Using Third Party Materials Other Potential Issues - Linking

General Links that lead web users to sites containing legal content (e.g. pirated songs,

unlawful software program etc.) may subject you to legal liability.

Links that comprise of company logos may violate copyright, trademark or unfair competition laws. Permission may need to be obtained

Deep Link Deep links means links that go straight to a specific page other than a website’s

home page. Deep linking is generally not allowed if it is a way of bypassing a subscription or payment mechanism, or if expressly forbidden by the site. Permission may need to be obtained.

Framing Means displaying the contents of another person’s website within a frame on

your site leading to the impression that the information originates from your website.



Using Third Party Materials Other Potential Issues - Metatagging

Metatags are keywords or phrases embedded in a website’s HTML code, which are invisible to the visitors of the website but are read by some search engines

Instead of using terms that properly describe the site, some website developers place the names of competing companies in their metatags in order to gain internet traffic

Deceptive use of another company’s trademark in a metatag may constitute unfair competition or trademark



Using Third Party Materials Other Potential Issues - Personal Information Treatment

Privacy laws or in the case of Malaysia, the Personal Data Protection Act 2010, may put limits and obligations on the collection, use and disclosure of personal information

If your website collects consumer information such as names, addresses, e-mail addresses, gender and professions, be sure you protect the privacy of such information

Also consider the need for training and supervision of all employees with access to such information



Using Third Party Materials Other Potential Issues - Terms and Conditions /

Disclaimers Terms and Conditions

If you sell products or services on your website, or allow users to download software, you may have specific agreements posted on your site that contain warranty information or disclaimers, limits on your liability etc

Will the agreement be binding on users? How apparent are the terms and conditions? Is there an opportunity to opt out? Has the user indicated his acceptance of the same?

Notices and Disclaimers Notices and disclaimers are rarely a cure-all for legal claims. However if your

notice or disclaimer is prominently displayed and clearly written, it may limit or even prevent liability

The notices and disclaimers should be tailored to fit the specifics of the website



Using Third Party Materials Other Potential Issues - Marketing and Removing

Infringing Material

Marketing and Advertising Online If you place advertising on your site, ensure that comply with specific laws and

regulations on advertising, content etc.

Removing Infringing Material If someone complains about an unauthorized use of copyright materials, you

should remove that material or disable the link pending resolution of dispute

Continuing to utilise the disputed materials may aggravate the claims and increase the chances of being found liable



PART C: CHOOSING A DOMAIN NAME

Basics of domain names

How to choose a domain name

Practical considerations

UDRP: Resolution of cybersquatitng disputes



Choosing A Domain Name Basics of Domain Names

Introduction Every computer that is connected to the internet must have an IP (Internet

Protocol) address

The Domain Name System (DNS) has a database to link these numerical addresses on a one-to-one basis with unique mnemonic alphanumeric equivalents called Internet Domain Names

Two Parts in Domain Name Top-level domain (TLD) - TLDs can be divided into two categories: the

generic top-level domains (gTLDs) and the country code top-level domains (ccTLDs). Domain names may be registered in either a gTLD or in a ccTLD

Second-level domain (SLD) - The section with the business/company’s name



Choosing A Domain Name How to Choose a Domain Name

Choosing the Top-Level Domain

Some gTLDs have no restrictions on who can register them e.g. .com, .info, .net and .org, depending on the entity

Other gTLDs are restricted i.e. only entities meeting certain criteria may be registered under them, e.g. .int for international organizations

You may register a domain name under a ccTLD, which corresponds to a country, territory, or other geographic location and bears a two-letter country code e.g. .my

The rules and policies for acquiring domain names in the ccTLDs vary significantly from country to country

You should take a careful look at the terms and conditions under which a registrar is offering ccTLD registration services



Choosing A Domain Name How to Choose a Domain Name

Choosing a Good Second-Level Domain

Select a domain name that is the same as or similar to your company’s business or product name

Choose a second-level domain that is distinctive of your business or products

Never choose a domain that is the trademark of another company

Avoid domain names that include controversial words

Choose the most “commercial” suffix if you are selling your products or services

Short domain names are generally the best as they are easier to pronounce, remember, spell and type into a browser



Choosing A Domain Name Case Study: Trademarks vs. Domain Names

Trademarks and Domain Names systems are different, but in some situations may overlap, e.g. when a trade name and trademark is used as part of a second-level domain name

Two identical trademarks may co-exist and be owned by different entities for identical products in separate geographical areas under relevant trademark laws

Two identical or similar trademarks in different classes of goods or services can also co-exist in the same geographical area or country

In contrast, the domain name system allows the use of one name by only one registrant



Choosing A Domain Name Case Study: Trademarks vs. Domain Names (continued)

Unlike trademarks, domain name create a monopoly right on a name or word, independent of the goods or services offered on the website

Two identical or similar trademarks in different classes of goods or services can also co-exist in the same geographical area or country

In contrast, the domain name system allows the use of one name by only one registrant.

Unlike trademarks, domain name create a monopoly right on a name or word, independent of the goods or services offered on the website.



Choosing A Domain Name Practical Considerations

Registration of Domain Name Anyone, whether an individual, organization, or company can register a

domain name

The duration of domain names are unlimited so long renewal or maintenance fees are paid, similar to trademarks

Exposure of the Domain Name It is important to make your business site’s ‘presence felt’ in order to attract

visitors

Register the domain name with popular search engines

Before registering the domain name with the search engines, understand the ranking system for different search engines



Choosing A Domain Name UDRP

To protect trademark owners and domain name registrants, the Internet Corporation for Assigned Names and Numbers (ICANN), WIPO and national internet authorities have put in place certain measures for the protection of the interests or trademark owners.

Abusive Registration Criteria: The domain name is identical or confusinglysimilar to the trademark in

question;

The trademark owner has a right or a legitimate interest in the domain name, and the domain registrant does not; and

The registrant registered or is using the domain in bad faith



Choosing A Domain Name Case Study: UDRP Procedure

The filing of a Complaint with an ICANN-accredited dispute resolution service provider chosen by the Complaint, such as the WIPO Center;

The filing of a Response by the person or entity against whom the Complaint was made;

The appointment by the chosen dispute resolution service provider of an Administrative Panel of one or three persons who will decide the dispute;

The issuance of the Administrative Panel’s decision and the notification to all relevant parties; and

The implementation of the Administrative Panel’s decision by the registrars concerned should there be a decision that the domain

names in question be cancelled or transferred.









PART D: HOW TO PROTECT YOUR WEBSITE

What elements of your website can be protected

How to protect your website

Take action against violations



How To Protect Your WebsiteElements Of Websites That Can Be Protected How Protected

New Technologies Systems, Search Engines, Technical Internet Tools

Patent / Utility Models

Software Copyright

Website Design Copyright

Creative Website Design – Written Material, Photographs, Graphics, Music and Videos

Copyright

Databases Copyright

Business names, logos, product names, domain names and other signs posted on websites

Trademarks

Computer-generated graphic symbols, screen displays, graphic user interfaces (GUIs) and webpages

Industrial Design Law

Graphic Symbols – Confidential Graphics, Source Code, Object Code, Algorithms, Programs or other Technical Descriptions, Data Flow Charts, Logic Flow Charts, User Manuals, Data Structures and Database Contents

Trade Secret Law



How To Protect Your Website Protecting your IP Rights

Register your Trademarks

Register a domain name that is user-friendly and reflects the trademark, business name or character of your business

Register your website and copyright material with the national copyright office (in countries which provide this option);

To think about patenting online business methods, in countries where such protection is available



How To Protect Your Website Letting People Know Content is Protected

Mark your trademarks with trademark symbols

Use the copyright notice

Use watermarks with embed copyright information into digital content itself.

Give notice to the public that your website or business method is patented.

Letting people know what use they can make of the content what can they do with the page

who to contact to get a copyright clearance in relation to any material on your site.



How To Protect Your Website Detecting Infringements of your Website

To detect infringements, you may take random snippets of text or images from your site and search for the snippets or images using search engines like Google and for images http://images.google.com by entering the graphic’s file name.

‘Spider programs’ can also search the internet for copies of your pages or graphics and illegal use of your trademarks.



How To Protect Your Website Taking Actions Against Violations

Make screen shots or prints of all relevant pages, and print source code from the infringing website

Be sure you can prove that your website content is original and that you have owned it for a longer period of time than the infringing website

Send a cease and desist letter to the owner of the infringing website asking to take your material off their website

If the owner does not respond, you may: send a notice of infringement to any search engine where the infringing site is

listed and demand that they remove any links to the infringing site; and

send a notice of infringement to the website hosting company or internet service provider (ISP) and demand that the infringing site be removed from the server where it is hosted.



Conclusion Recap:

IP & E-Commerce

Creating website

Choosing domain name

Protecting your website

Quiz



Thank You

Deepak PillaiMessrs Haryati DeepakAdvocates & SolicitorsUnit L-5-3A, Solaris Mont’ KiaraNo. 2 Jalan Solaris50480 Kuala Lumpur

Tel: 03-62030760 Fax: 03-62030761E-Mail: [email protected]: www.hdlaw.com.my

H A R Y A T I D E E P A K A D V O C A T E S & S O L I C I T O R S § T R A D E M A R K A G E N T S 1 haryatideepak advocates & solicitors I trade mark agents.

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