Dreyfus

The Internet revolution is at its peak with the advent of new generic top level domain names. The possibility to register new gTLDs opens new avenues for significant trade and economic prospects. Internet stakeholders are engaged in a raging battle to secure the most promising gTLDs.

In this ferociously competitive setting, it is not uncommon that a TLD is coveted by several applicants. A string contention then occurs, where two or more applicants successfully pass the stages of the evaluation process for domain names, which are identical or similar.

Module 4 of the ICANN’s New gTLDs Applicant Guidebook provides that the String Similarity Panel identifies contention sets.While identical gTLDs will automatically be assigned to the same contention set, similar gTLDs will only be placed in the same contention set when this similarity is such that it may create probability of confusion thus impacting the visibility of the gTLDs.

When such a string contention occurs, the applicants are invited to reach an amicable settlement. If they are unable to do so, the Applicant Guidebook provides for an auction as a means of last resort allowing to distinguish between applicants for a gTLD string belonging to the same contention set.The winner will then be able to proceed to the stage of contract execution, subject to meeting the requisite criteria.

An auction was held on September 17 in a view to resolving string contention sets for three new  gTLDs:the <.buy>, <.tech> and <.vip> gTLDs, which were sought by 4, 6 and 5 applicants respectively.During the auction which was facilitated by Power Auctions LLC, an auction service provider appointed by ICANN, Amazon won <.buy> for $ 4,588,888, while Dot Tech LLC acquired <.tech> for $ 6,760,000 and <.vip> was secured by Top Level Domain Holdings for $ 3,000,888.

The sums at stake are indicative of the high level of competition, which piques internet stakeholders and the economic significance attributed to the new  gTLDs.

The auction system is a recent one: as at 17 September, only one auction had taken place, on June 4 this year, Beijing Tele-Info Network Technology Co. LTD won the <.信息> gTLD for $ 600 000.Auctions will take place every month until March 2015. For instance, 108, 134, 106 and 208 applicants are competing for the <.law>, <.sucks>, <.music> and <.forum> gTLDs respectively…Nonetheless, it is unlikely that all of the above mentioned applicants will be participating in the auction: while some will voluntarily withdraw themselves, others will be evicted during the more extensive evaluation phases.

It is noteworthy that the significant proceeds from these auctions have not yet been assigned to any particular purpose; the proceeds collected will therefore be separated from the traditional proceeds of ICANN. It remains to determine how they will be used.

Following the separation of Sudan and South Sudan in 2011, a trademark must be subject to dual protection so as to be safeguarded throughout the territory of the two countries. Trademarks registered in Sudan are no longer protected in South Sudan. Thus, it is advisable to have two distinct registrations.

The Ministry of Justice of South Sudan is responsible for the completion of formalities under the 1969 Sudanese law. The existing system is expeditious (2 to 3 months to secure a registration certificate) but requires that an application to be filed for each proposed class (mono class system).

Once registered, the trademark will be protected for a renewable period of 10 years in the territory of South Sudan.

Any application filed today will only be legally enforceable once the new law, which is currently being debated in Parliament, shall come into force. However, protection will run retroactively from the filing date.

With the rapid proliferation of social networks and the increased access to virtual currencies, it was inevitable that the two would merge at some point. Indeed, virtual currencies are being increasingly used in networks, particularly for the payment of premium services.

Virtual currencies are characterized by their digital nature. They are stored on electronic media and used by electronic devices. They serve the same purpose as real money, that is, to purchase goods and services. However, they are private currencies and are thus not controlled or regulated by the state. They may be used either for profit or for charity.

These new currencies, which work in parallel with real money, are often network-specific. Facebook Credits and Twitter’s Twollars are amongst the most popular. They have also established themselves in other media, particularly in video games.

There are two systems of virtual currencies:

–       open systems where real money can be converted into virtual currency and vice versa;

–       closed systems where virtual currency cannot be reconverted back into real money.

In connection with these currencies, new payment methods can be found which are specifically designed for social networks like, for instance, Dwolla. At the same time, “likes”, followers and tweets are being monetized. This concept was used in Marc Jacobs’ pop-up store during the Fashion Week in New York where customers could pay through tweets by using the hashtag #MJDaisychain.

Currently, these currencies are not regulated. However, their evolution and the stakes involved make it very important for a related legal framework to be established. Given their lack of territoriality, an international solution should be found for these currencies to be effectively monitored. This makes the issue a complex one.

Dorothy M. Hartman, a retired science teacher and the CEO of the ABFY SELLERS group, claims that her contributions towards The Internet 2 were stolen by the federal government through its Small Business Innovation Programs and the National Science Foundation. According to Hartman, after her patent application was fraudulently prosecuted by the United States Patent and Trademark Office, she responded by filing writs in the United States Supreme Court.  The Internet 2, which has brought enormous change around the globe in terms of how people do business, and has turned into to a trillion dollar industry, is certainly worth fighting for, especially considering Hartman’s current business ventures are struggling.

As a background, if you are unaware of the drastic differences between the Internet 1 and the Internet 2, and don’t want to delve in-depth into technical details, imagine the difference between a line and a circle.  Before the invention of the Internet 2, the internet was more or less seen as a tool for business and utility.  Websites, created by webmasters could be visited by online users.  However, communication remained fixed between these two actors in a linear relationship.  If we compare this to the advent of The Internet 2, which has become more about social media, commercial transactions, and online interactions, amongst various parties together, the complexities of these differences become evident.  It is now circular, with webmasters, online users and other online users all in a circle of communication together. In linking her ideas to the success of The Internet 2, Hartman says it took her insight of the web to realize these interactive transformations.

It has now been 24 years that Hartman’s voice has been ignored.  At the time, Hartman was 46 years old when she submitted a business plan to the government with the goal of obtaining funding for a telecommunications services prototype company.  Her plan, which was dismissed by the government, was apparently stolen to enrich the Internet 1 and those already in the internet industry.  The battle for her intellectual property has felt like an up-hill battle to the now senior Hartman, who no longer feels she has the strength to fight against the power of the government and massive multinational companies.

Hartman rejects the reasoning of the U.S. Court of Appeals for the Federal Circuit in the 2013 case on the following grounds:

• She claims that the Court did not distinguish between the Internet 1 and the Internet 2 and that the difference is definite;
• the Court did not acknowledge the, what she claims to be, fraudulent behavior of the United States Patent and Trademark Office;
• the Patent Office argument was invalid in its assertion of “indefiniteness.”

Despite her age, Hartman claims she will continue to fight for justice and for what she deserves for producing an invention which has without doubt changed the world.  Numerous media outlets have begun describing this case and the injustice to which Hartman is being subjected to in relation to Hartman’s status as a black female operating in a male dominated industry.  Regardless of this, it can surely be said that whoever the inventor of the Internet 2 is, they deserve credit for what could be said to be the 20^th century’s greatest invention.

Three post-delegation dispute resolution procedures (PDDRP)for the new extensions have been implemented :

• The TM-PDDRP on trademark infringement;
• The RRDRP which comes into play when the registry of a new community extension goes beyond the restrictions contained in its registry agreement;
• The PICDRP.

The Public Interest Commitments Dispute Resolution Procedure (PICDRP) was developed to ensure the compliance of the registries with the commitments undertaken in their registry agreement with ICANN.

What does the procedure sanction?

By signing the registry agreement with ICANN, companies applying for new domain name extensions subjected themselves to numerous technical, financial and legal obligations. The duty to comply with public interest commitments (PICs) as well as the duty to comply with Specification 11 of the registry agreement (see below) form part of these obligations. The PICDRP therefore sanctions the registries’ non-compliance with their commitments in this respect.

Like all post-delegation dispute resolution procedures, the PICDRP sanctions the very behavior of the extension registry. It thus differs significantly from the UDRP procedure, for instance, which targets domain names registrants.

What are PICs?

As from March 5, 2013, applicants for new gTLDs were given twenty-eight days to make public interest commitments. They were thus afforded the opportunity to specifically define the commitments they intended to take (or not), either by referring to their application file, or by undertaking completely new obligations.

For example, Donuts Inc, the applicant with the largest number of filed applications, undertook that the domain name .lawyer be only open to legal professionals, with a view to protecting consumers. Donuts may thus be liable if it decides to make the .lawyer extension accessible to all internet users.

“These are commitments made to the community, to governments, and to all those who could oppose applications – they are not commitments to ICANN,” said the President of the Global Domains Division at ICANN, Akram Atallah, at the time. And of course, it is these same commitments that the PICRDP will sanction in the event of non-compliance.

What is Specification 11?

Inserted in the registry agreements entered into with ICANN, Specification 11 requires registry operators of new gTLDs inter alia not to impose eligibility criteria for the registration of domain names which would limit the registrations to a single person/entity or affiliated persons/entities.

Specification 11 results from the opinions emanating from the GAC, the ICANN body representing governments. The GAC had identified gTLDs reflecting regulated or restricted industries, as well as generic extensions which applicants wish to make exclusive use of (known as “closed generic TLDs”). The GAC thus made several proposals in an effort to protect public interest in relation to these extensions which took the form of Specification 11. This document is attached to the registry agreement.

The obligation of registries to sign the RAA 2013 (the latest version of the Registrar Accreditation Agreement) with the registrars or that to publish and comply with the registration rules are also included in Specification 11.

What is the procedure?

The PICDRP is the mechanism through which ICANN intends to enforce public interest commitments. Any person who deems that PICs or provisions of Specification 11 have not been complied with by an extension registry can lodge a complaint with ICANN stating:

–       The basis of the complaint;

–       The way in which the registry did not comply with its commitments;

–       The resulting loss.

After a preliminary assessment, ICANN forwards the complaint to the relevant extension registry. The latter then has 30 days to liaise with the complainant and try to find a solution. Beyond this deadline, the registry will have to explain to ICANN how it complies with public interest commitments. ICANN will have investigation powers and, at its sole discretion, will have the power to appoint three experts who will investigate and assess whether the registry has breached its commitments. If the behavior of the registry does not comply with the PICs or Specification 11, ICANN may require it to take corrective measures within 30 days and could thereafter adopt measures culminating in the termination of the registry agreement.

Which TLDs does the procedure apply to?

The PICDRP is solely intended for new domain name extensions. Therefore, neither national extensions known as ccTLDs (such as .fr or .uk) nor traditional gTLDs (such as .com, .info, .net or .org) are covered.

Dreyfus specializes in the resolution of Internet disputes, particularly in relation to new domain name extensions. Please do not hesitate to contact us for any queries.

The issue of net neutrality, and particularly that of leading players such as Google, Apple or Amazon, is currently of interest to the French Government.

The Digital Council, an advisory body for all matters relating to digital development, presented a report on “platform neutrality” on Friday, June 13. This report aims at initiating discussions with Internet stakeholders for the development of a set of the best practices in order to ensure a free and open Internet that can reconcile innovation, freedom of trade and industry as well as respect for individual freedoms.

The objective of net neutrality is achieved through the fairness and transparency of the platforms. The major recommendations of the report are as follows:

• impose a certain degree of fairness in the overall process of collecting and processing personal data;
• acknowledge the principle of neutrality as a “fundamental principle which is necessary for the exercise of the freedom of communication and freedom of expression” and provide for its inclusion in the law “at the highest level in the hierarchy of norms”;
• set up rating agencies to evaluate and grade platforms. The rationale seems to rest upon staking the reputation of businesses so that the latter rectify their behavior on their own accord out of their apprehension of reputational damage.

Despite the regrettable lack of recommendations with regard to Internet access providers in this report, the proposals of the National Digital Council shall, in France, pave the way for the informed preparation of an effective draft legislation in respect of the French digital technology and the country’s digital strategy in Europe.

It remains to be seen, however, whether major Net players will be compelled to adhere to the French rules.

On April 9, 2014, the Paris Court of Appeals[1] ruled on Google’s status regarding its AdWords services. It found that Google is a passive host provider for these specific services, which awards it limited liability destined for passive hosts provided by the E-commerce Directive.[2]

Google’s AdWords service is frequently the cause of legal disputes. This decision follows, inter alia, a decision of the Court of Justice of the European Union (CJEU), which ruled that hosting keywords corresponding to trademarks does not amount to a “use in the course of trade” that the right owner can prevent.[3]

A decision was rendered in lower court in January 2009, which found Google liable for unfair competition and misleading advertising. On appeal, the Court excluded the misleading character of the ads, stating that the display allowed any average internet user to perceive the difference between the advertising and the natural results.

The Court then focused on Google’s role in the keywords selection for its AdWords service. Google’s intervention was qualified by the judges as “merely technical, automatic and passive […], consequently lacking control and knowledge of the hosted information”. The Court also pointed out that the hosting provider had no monitoring obligation regarding illegal content.

Indeed, European law distinguishes active service providers from passive hosts to whom it offers partial immunity. This immunity exempts the hosting providers from liability for third-party content hosted on its platform. However, if there is actual knowledge of information, facts or circumstances of an illegal nature and no action was taken expeditiously to remove or disable access to the illegal content, the host may be held liable.

The Paris Court of Appeals’ decision confirms the trend set by previous French case law as well as the Spanish Court in the Telecinco v Youtube case[4] whereby automatic services do not contravene to the neutral nature of the services provided. Therefore, the Courts recognize that there is no reason to exclude such passive service providers from liability immunity according to the E-commerce Directive.

As part of its monitoring activities, Dreyfus offers watch services covering AdWords campaigns as well as domain names and social networks.

[1] CA Paris, April 9, 2014, Google France, Inc. et Ireland / Voyageurs du monde, Terres d’aventures

[2] Directive 2000/31/CE on E-commerce

[3] CJEU, March 23, 2010, Google France v Louis Vuitton Malletier, joined cases C-236/08 to C-238/08

[4] CA Madrid, January 14, 2014, Telecinco v Youtube, N° 11/2014

Recently, the U.S. Food and Drug Administration (“FDA”) released two sets of guidance surrounding how pharmaceutical, medical devices and prescription drug companies should utilize social media platforms, particularly those like Twitter with limited character space, in order to effectively provide information on products to consumers.  Specifically, the FDA is concerned with accurately regulating communications of medical devices and prescription drug products in terms of the benefits and risks associated with their usage.  However, a #FDAMedia post on Twitter dated June 27^th, approving a new product to treat diabetes, “a rapid-acting inhaled insulin”, appears to follow none of the newly conceived guidance.

The new set of media guidance, which goes as far as to provide “Twitter Rules”, reminds the Regulated Entities that “beneficial claims in product promotion should be balanced with risk information (U.S. Department of Health and Human Services Food and Drug Administration, Guidance for Industry Internet/ Social Media Platforms with Character Space Limitations- Presenting Risk and Benefit Information for Prescription Drugs and Medical Devices (June 2014).”  A thorough examination of the guidance reveals that Regulated Entity’s should qualify with the following criteria (Id., page 5 and 6):

• Be relevant and responsive to the misinformation;
• Be limited and tailed to the misinformation ;
• Be non-promotional in nature, tone and presentation;
• Be accurate;
• Be consistent with the FDA-required labeling for the product;
• Be supported by sufficient evidence, including substantial evidence, when appropriate, for prescription drugs;
• Either be posted in conjunction with the misinformation in the same area of forum (if posted directly to the forum by the firm), or should reference the misinformation and be intended to be posted in conjunction with the misinformation (if provided to the forum operator or author); and
• Disclose that the person providing the corrective information is affiliated with the firm that manufactures, packs, or distributes the product.

The #FDAMedia tweet, which reads “FDA approves Afrezza, a rapid-acting inhaled insult to treat diabetes go.usa.gov/97P9” does not hold any risk information and the generic and chemical name is also not noted.  Mark Senak of Fleishman-Hillard’s Washington, D.C. office, who is the blog author of Eye on FDA commented that the, “FDA is not so contrained when it sends out news of its own,” which appears to be an accurate statement concerning this case (“To Tweet or Not to Tweet? Or Even Retweet? FDA, Tweeting and Twitter”).

In the future, it should be expected that the FDA will uphold and abide by its own guidance when posting on social media platforms, or else the expectation that companies will follow suit, is not a realistic one.

The Hamon law of March 17, 2014 on consumption came into effect on June 13 of this year. This law has been transposed from a European Directive of 2011 that aims to enhance consumer protection.

A summary of the changes brought about by this law:

According to the Hamon law, a consumer should be provided with a number of information about his order on a «durable medium» after executing the contract. In practice, this concerns the general terms and conditions that contain the complete clause on the right of withdrawal and the standard withdrawal form, as well as a summary of the order (product or service ordered, price, delivery time). In practice, there are 3 options:

• Send the general terms and conditions and the form in PDF format as an attachment to the confirmation email
• Insert the text of the general terms and conditions and the form in the body of the confirmation email
• Print the general terms and conditions and the form, and attach them to the parcel containing the goods ordered

These do not apply to B2B websites:

• “Order with obligation to pay” feature
• Right of withdrawal
• Automatic responsibility for transportation risks
• Penalty scheme andwithdrawal from the contract in case of late delivery

The following continues to apply to B2B websites:

• Obligations relating to the protection of personal data (CNIL notices, privacy policy, cooky rules)
• Complete legal notice
• Permanent feature allowing for an order to be confirmed at the check-out stage

These are not new additions brought forth by the Hamon law.

This article contains general recommendations but does not, in any case, constitute a legal opinion for which Dreyfus can be held liable in case of inaccuracy. Do not hesitate to contact us for advice regarding your specific situation.