Brand Theft Facebook

Social networks such as Facebook, Myspace, and Twitter have reached mainstream popularity. As such, businesses are quickly picking up on the advertising potential these sites offer as a way to market mass audiences. But in a race to reach the consumer, companies may be left in the dust by social-network-saavy entreprenuers, who snatch up valuable online intellectual property.

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For example, Facebook recently offered users the option to create a personalized direct link to their Facebook page (i.e., www.facebook.com/[insert-personalization-here]). Perhaps most Facebook users would use their name to personalize their page, but what if Joe Smith used the name of his favorite soda? The company producing that soda would then be unable to create a direct link to a page devoted to promoting its product. While this scenario obviously creates a marketing issue for the soda company, it may also create a legal issue for Joe Smith.

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If Soda Company had trademarked the name of its product, Joe Smith would be committing a trademark violation by using the name without Soda Company's consent. Maybe it was an innocent mistake on Joe's part. However, this type of situation often results in the illegal practice of "cybersquatting"--the act of obtaining a domain name with the bad faith intent to profit from the goodwill of a trademark by offering to sell the domain to the trademark-holder at an inflated price.

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INTELLECTUAL PROPERTY LAW

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In general, "intellectual property law" covers trademarks, copyrights, and patents. Most relevant to the concept of "cybersquatting" is a trademark. A trademark is a word, phrase, logo or other graphic that a company uses to distinguish its product or products from those of others. The main purpose of a trademark is to designate the source of goods or services. Essentially, a trademark is the commercial equivalent of a signature. Trademarks are protected under the common law by use, even when they are not registered with the federal government. In order to gain federal protection, a trademark must be (1) distinctive rather than merely descriptive or generic; (2) affixed to a product that is actually sold in the marketplace; and (3) registered with the U.S. Patent and Trademark Office.

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In the context of the internet and “e-commerce”, Federal courts have held that the use of other’s trademarks in website domain names constitutes trademark infringement. In the Lanham Act, the Federal government codified various laws designed to protect trademarks in the context of e-commerce. The act also provides trademark holders with protection from cybersquatting by outlawing the practice.

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HOW TO PREVENT BRAND THEFT AND TRADEMARK VIOLATIONS

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Companies should actively monitor social networking sites in order to prevent trademark violations and to prevent others from “squatting” on their intellectual property rights. Facebook offers an online form that companies can fill out to report and eliminate trademark infringements. The form can be accessed by clicking here.

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Moving beyond Facebook, companies should also consider creating specific groups or divisions responsible for monitoring the various social networking sites such as Twitter and Myspace. For example, Twitter also uses usernames. Any Twitter user could create a username that illegally uses another’s brand name. Every social networking site creates the potential for brand theft. Therefore it is imperative to monitor the sites and keep up to date with new developments in how the sites are used.

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One of the most effective ways to monitor these sites is to use them as part of a marketing strategy. By creating a Facebook or Twitter site, the company not only helps to ensure that its brand is not being used by another, but also gains access to valuable consumer information. These sites will allow the company to directly communicate with a massive group of potential consumers in ways which are not otherwise possible. It will also create an official brand site, for which consumers may already be looking. There are currently over 200 million users on Facebook alone, and over 1 billion messages transmitted on the site daily. Establishing a free brand site on the network will prevent others from stealing a company’s brand name, while simultaneously providing the company with access to a massive consumer market.