Utah invents the electronic registration mark.
Utah General Counsel is reminded of the dormant commerce clause:
As required by legislative rule and practice, the Office of Legislative Research and General Counsel provides the following legislative review note to assist the Legislature in making its own determination as to the constitutionality of the bill. The note is based on an analysis of relevant state and federal constitutional law as applied to the bill. The note is not written for the purpose of influencing whether the bill should become law, but is written to provide information relevant to legislators’ consideration of this bill. The note is not a substitute for the judgment of the judiciary, which has authority to determine the constitutionality of a law in the context of a specific case.
This legislation allows the registration of an electronic mark that would prohibit the triggering of an advertisement for a competitor. The most prominent application for this type of mark is the use of user-entered search terms in an Internet search engine to trigger advertisements. These triggered advertisements are often advertisements for a competitor of an entity whose name is entered in the search engine by a potential customer. Because of the potential impact on interstate commerce from the state’s regulation of electronic registration mark use on Internet search engines, this legislation has a high probability of being held to be unconstitutional.
The Commerce Clause to the United States Constitution provides that Congress has the power to regulate interstate commerce. (U.S. Const. art. I, sec. 8). This provision also has a “dormant” aspect that “prohibits state . . . regulation that discriminates against or unduly burdens interstate commerce.” General Motors Corp. v. Tracy, 519 U.S. 278, 287 (1997) (Citations omitted). Although the dormant aspect of the Commerce Clause is not implicated when Congress has delegated its power to regulate in an area to the states, that delegation “must be either ‘expressly stated’ or ‘made unmistakably clear.'” New York State Dairy Foods, Inc. v. Northeast Dairy Compact Comm’n, 198 F.3d 1, 20 (citations omitted). Further, this delegation must be specific to that state action challenged. See Ind. Community Bankers Ass’n v. Bd. of Comm’rs of the Fed. Reserve Sys., 838 F.2d 969, 973-77 (8th Cir. 1988) (holding that although Congress authorized states to allow a bank’s acquisition by out-of-state entity, Congress did not authorize restrictions on acquired banks).
In the context of this legislation, there has been no specific delegation by Congress of the authority to regulate the type of Internet advertising that this legislation targets, whether triggered by an electronic registration mark or any other method. Thus, the dormant Commerce Clause is implicated and the legislation will be analyzed to determine whether it places a burden on interstate commerce that outweighs the state’s benefit. ACLU v. Johnson, 194 F.3d 1149, 1161 (10th Cir. 1999).
This legislation applies to an electronic mark registered in Utah that is used to trigger an advertisement if the advertisement is delivered in Utah or if the advertiser or person selling the advertisement is located in Utah. A large Internet search engine must first determine whether a user is located within Utah. If the user is in Utah, the Internet search engine must check search terms against Utah’s registry of trademarks to prevent the unlawful triggering of advertising. Literally millions of search requests from locations worldwide each day would be subject to verification of location. Once verified, the search engine would then use a separate process for delivering advertising to Utah. This results in multiple systems of advertisement for a search engine to manage.
It is plausible that a search engine might merely decide to check all searches against the state’s registry to avoid the need to ascertain the location of each user. This would be strong evidence of the magnitude of the burden of verifying the location of each user and of the interstate impact of this legislation. See, e.g., Id. (stating “the nature of the Internet forecloses the argument that [the statute] applies only to intrastate communications.”). Whether deciding to verify a user’s location or to merely check the registry with each search, any benefit to the state from this legislation is likely substantially outweighed by the burden on every Internet search engine or similar system to re- engineer its systems and constantly check the search terms or the location of a user. This is likely the case even with advances in technology that make it easier to determine a user’s location.
In ACLU v. Johnson, the Tenth Circuit U.S. Court of Appeals held that a New Mexico statute that prohibited the dissemination of material harmful to minors by computer violated the Commerce Clause because it applied to material that was being disseminated over the Internet. Id. at 1152, 1161-63. This legislation is not dissimilar from the laws struck down in ACLU v. Johnson, in that it has the effect of requiring entities outside of Utah to verify the location of a user or ensure that all content complies with Utah law. Additionally, the benefit to the state from this legislation is likely less than in ACLU v. Johnson, which dealt with the protection of minors from pornography. Thus, in addition to regulating conduct outside of Utah, this legislation also likely provides a benefit that is substantially outweighed by the burdens on interstate commerce. For these reasons, this legislation has a high probability of being held to be unconstitutional.
Office of Legislative Research and General Counsel
MichaelGeist.ca: “DMCA Architect Acknowledges Need For A New Approach“: (Former head of the Patent and Trademark Office, Bruce Lehman, influential in the creation of the DMCA, during a panel conference (available on video):
“. . . Lehman says that we are entering the “post-copyright” era for music, suggesting that a new form of patronage will emerge with support coming from industries that require music (webcasters, satellite radio) and government funding. While he says that teens have lost respect for copyright, he lays much of the blame at the feet of the recording industry for their failure to adapt to the online marketplace in the mid-1990s.”
TMBrandingCap.com reports that the village of Katonah (about ten miles from here) and at least one housewares business within Katonah, will take action against local resident Martha Stewart’s applications for the mark KATONAH for housewares. Background here.
I wouldn’t mind if Martha Stewart used my home town’s name as a trademark. If the product wasn’t junk, it could help property values.
AP: ‘McDonald’s Seeks To Redefine ‘McJobs‘:
“McDonald’s Corp. is reviving its campaign to ditch the dictionary definition of “McJob,” this time setting its sites on the vocabulary of Britons. The world’s largest fast food company said Tuesday it plans to launch a campaign in the U.K. this spring to get the country’s dictionary houses to change current references to the word “McJob.””
Wikipedia entry on McJob.
Information on careers at McDonalds.
TVNZ: “Thirst For Knowledge Leads To Court“:
“Two Auckland schoolgirls have taken on one of the world’s most powerful food and drug companies and won.
A school science experiment has led to GlaxoSmithKline being prosecuted for allegedly misleading consumers about the vitamin c content of Ribena.”
The Conglomerate: “I Can’t Believe I’m Defending the American Girl Doll Racket”:
“. . . a young girl on a playdate took her Target knock-off of an American Girl doll to the Manhattan American Girl doll store and was refused the $20 hair salon experience for her nonconforming doll.”
News.com: “Starz Sues Disney Over Movie Downloads”:
“Liberty Media Holding’s Starz Entertainment cable network said on Thursday it is suing a unit of Walt Disney for allowing other movie download services to sell titles while they were exclusively licensed to Starz.
The lawsuit, filed in U.S. District Court in Los Angeles, was brought by Starz against Disney’s Buena Vista Television, which this year signed deals to sell movies on Apple’s iTunes online store and Wal-Mart Stores’ new movie download site.”
HT BNA Internet Law News.
Hollywood Reporter: “Music Publishers Sue XM Over Digital Copying”:
“The suit, filed in federal court in New York by the National Music Publishers Assn., alleges that XM engages in massive copyright infringement through its subscription digital music download service known as XM + MP3.
According to the NMPA, the suit was filed after months of discussions between NMPA and XM regarding the satellite radio company’s obligation to compensate creators fairly for the songs it distributes.”
HT BNA Reporter