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Legal quagmires lurk online
By Gerald S. Geren Lee, Mann, Smith, McWilliams, Sweeney & Ohlson, Chicago -- Design News, August 11, 1997
By now, who hasn't heard about the Internet and its numerous advantages. The Internet, it is said, can gather information and provide opportunities for a business to increase its exposure and gain customers.
Most users are also aware of operating and security problems on the net. Net users understand their vulnerability to computer viruses and the difficulties involved in securing both information stored in their computer and their online credit card transactions.
Legal problems exist as well. Issues surrounding the protection and use of copyrighted information on the net and the liability of either a service provider who transmits such information or a user who receives and uses it have yet to be resolved. Neither has anyone suggested satisfactory solutions for on-line pornography or gambling.
Lurking problems. In addition to these well-publicized issues are underlying concerns that can also cause significant problems. One is the legal question of court jurisdiction arising from the use of the net. If one person (say his name is John) publishes on the net from one state (Rhode Island) and a second person (Bob) accesses the publication from a second state (Texas), can Bob sue John in Texas or must he sue in Rhode Island?
The question of court jurisdiction arises in other situations. For instance, John sells a product or service, and Bob enters into a contract to buy the product or service. What if John doesn't deliver or Bob doesn't pay? Who sues and where?
The answer seems to be--it depends. If John was using a basically passive home page (it only provided information), it does not appear that the necessary "minimum contacts" exist to permit suit in Texas. But if John's page featured activities that required Bob to accept an on-line contract by a point-and-click option or to download information, the "minimum contacts" may exist, and John may find himself being sued through a Texas court. This could be a significant disadvantage to John and totally unexpected.
Unresolved questions.What if John uses a trademark that Bob recognizes as his? If the sole issue is over the use of a trademark, then the question seems to be undecided at present. The courts then appear to look for the presence or absence of other activities on which to base a decision.
What happens if John selects a domain name which Bob believes is his or close enough to his to cause confusion between them? A registration process exists, but under certain conditions that registration can be challenged. For example, Bob may have a stronger case if he has a federal trademark registration for the domain name. In some cases the governing body (Network Solution Inc.) may place the name on hold and not grant it to either party until either one or the other party relinquishes or waives its rights or until the name issue is resolved in court or in an arbitration.
Use of the Internet may expose the user to litigation that is both unexpected and in a remote location. Moreover, domain name selection can cause problems. Thus one needs to be careful as to how the Internet is used and what names or terms are selected for use.
Legal questions
What is the status of the doctrine of equivalents in the U.S. Supreme Court?
The Supreme Court recently issued its decision. The case in the main has adopted the existing law as the existence of infringement by equivalent, but created some new wrinkles as to the scope of protection.
How heavy is the patent activity in the U.S. Patent and Trademark office?
About 236,000 patent applications were filed in 1995 versus about 201,000 in 1994, an increase of about 35,000. In terms of patents issued, about 114,000 were issued in 1995 versus the approximately 113,000 issued the year before. Note that there is about a two- to three-year lag time between filing and issue, but roughly about 50% of the applications filed were issued as patents.
What can be said about patents issuing to non-U.S. versus U.S. residents?
In 1995, about 64,000 patents were issued to U.S. residents and 49,000 for non-U.S. residents, giving U.S. residents about 75% of the patents issued.
What about trademarks and registrations?
About one-third of the applications filed in 1995 issued as a registration. Of the nearly 175,000 applications filed for trademarks, about 65,000 registrations were issued. Whereas in 1994 about 155,000 were filed and about 59,000 registrations were issued. But in 1995 about 88% of the issued registrations went to United States residents.
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