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Episode 13 of the “Law & Business” podcast welcomes Oz Sultan again.
Oz Sultan
In this episode, Oz and Anthony talk about three internet policy thoughts.
- Domain Name Issues
- Management and Enforcement of Intellectual Property
- Economic Rationals for Enforcement
Also – was .sucks a good idea or a bad idea and can registering a .sucks domain name bring legal action?
Here is a lightly-edited transcript of the podcast episode:
Anthony Verna:
So welcome again to the Law and Business podcast. I’m here again with Oz Sultan. And how you doing?
Oz Sultan:
Hello. Good to be catching up.
Anthony Verna:
So let’s start here. Plug yourself once again for those who may have missed your previous appearance.
Oz Sultan:
Sure. I am Oz Sultan and I focus on digital strategy, brand management, the execution and development of social campaigns and lead generation. And we have a new analytics dashboard product. So if you have a big data problem or a social digital data problem or a brand problem, SCM, that kind of stuff, we can probably help you develop your KPIs and look at all of that stuff in a simple way that your executives will love.
Anthony Verna:
What is a KPI? I do advertising law and I never heard that phrase before.
Oz Sultan:
Key Performance Indicator. It’s basically what are your metrics? It’s like what’s important to you?
Anthony Verna:
I can’t keep up with the TLAs today.
Oz Sultan:
I know.
At least that’s better than, than trying to keep up with the TLDs.
Anthony Verna:
Those I can keep up with.
Oz Sultan:
And the TMCs…
Anthony Verna:
Quick aside, speaking of TLS…
Oz Sultan:
What’s your P’s and Q’s?
Anthony Verna:
Yes, exactly. Speaking of top level domains, there are some issues because apparently I can allow the .sucks. And, of course, a lot of companies are up in arms because who wants to…
Oz Sultan:
Let’s talk about the most important person who is up in arms, Taylor Swift.
Anthony Verna:
Why? Did somebody register TaylorSwift.sucks?
Oz Sultan:
No, as soon as the TLDs came out, Taylor Swift went out and registered a lot of those for herself and it kind of hearkens back to in 2000 going back to yesteryear or going back to a 2001- 2002 When I was running, fye.com, which had to be purchased from the Fye family of Australia.
And that was a Trans World property back when Trans World was a $3 billion company, and had all of the music stores in the country and then bought Tower and Warehouse and sort of imploded like a flan in the cupboard. I had to sit there with this much older than I woman and explain to her in graphic detail why we had to buy swear word permutations of the domain. She was sitting there basically just ghost faced with the list I gave her, cause there was about 75 different permutations, but it was basically F a F coconuts, F FYE because they owned every single music store back then.
Anthony Verna:
Right. I understand.
Oz Sultan:
So one of the things that you know, that harkens back to is reputation management and piracy and some of the things I guess you want to discuss today.
Anthony Verna:
Sure, we can easily slide into that because talking about management of intellectual property, and that’s one way of managing trademarks and managing brands. And as many brand owners will tell you, you have to make sure that people can can’t come at you in other ways. And having all those, owning all those domain names, regardless of the permutations, is one way of getting people to not, not talk about.
Oz Sultan:
Just out of curiosity, how much are the dot sex domains?
Anthony Verna:
Dot sex?
Oz Sultan:
Dot sucks.
Anthony Verna:
Sorry. Some were going for $2,500. Let’s take a look cause I know some are going for really high numbers here, but, Joel Wilcox. sucks. So, whoever owns that now with selling it for about $4,000. Wow. Yeah. So, some people are buying domains like ADP. Dot sucks. Applecare.sucks and you know, eharmony.sucks. But, I’ll go and do something that I did a long time ago and I wrote a paper on brand management. And really it was, it was for musicians, but ultimately musicians are a subset of being a brand and domain names. When you file a domain name, you have to know that you’ve got some ability to, to use it.
Oz Sultan:
By the way that the dot sucks are, I mean, I just searched the dot sucks domains are expensive. They’re 230 bucks a pop.
Anthony Verna:
Right. And but these brand domain names, I mean that’s cybersquatting. Under US federal law. We don’t really call it cybersquatting although, I forget the term now in the trademark statute, but it a cyber piracy, no, not cyber piracy, I forget the term. But anyway, it is trademark infringement to take a domain name that you know that is somebody else’s right. And use it. And also, it’s a violation of the UDRP (uniform domain name resolution policy) to not have good faith, right. To use a domain name of somebody else’s trademark. Now, one mad face is a different story as well. And you know, somebody could set up an email address and use it and maybe that’s good faith, but you know, if you buy a domain name with somebody else’s trademark and you’re out to bad mouth that company or just kind of hold it hostage, and, and try to resell it for a lot of money, that’s not going to be good faith.
Oz Sultan:
No. Well, I think one of the things to think about too is, well in addition to what you do and the work that you do, one of the easiest ways to really kind of see where you are is take a look at the Howard Greenstein who we’ve known from the tech community forever has a new company called DomainSkate. Which is a good way for you to kind of check what is the reputation around your brand and what’s interesting too, And you two should actually talk next week, they can help shepherd the litigation process. One of the pieces of this is if someone is squatting on a permutation of your brand, say for example, you had, I think it’s Olive Garden has sued a few people in the past, but I’m trying to think of someone who’s more germane where there was, it was kind of like cooption, right? So, it says whatever you had was very close to the name of the brand that’s there. That happens on a regular basis. One of the things that, that we’d sort of laughed about was I think someone that created Taco Bell with an E. This is a while back, but,
Anthony Verna:
Like a woman?
Oz Sultan:
So you have a picture of a woman and it’s Taco Belle, but because the trademarks sounds the same, you know, and they hadn’t trademarked and I think they got shut down. It was just a one-time thing in the South. But, because the trademark’s in place and the trademark’s enforced and it’s really something to think about in terms of your brand. And then really if you’re even creating a brand, and even nowadays with, with all of the brand assimilation going on, I mean, Kraft just bought Heinz, so I suppose you can now have macaroni and cheese and ketchup in some sort of value pack. It sounds right.
Anthony Verna:
I love your sentences.
Oz Sultan:
You know, that’s it. This is where it’s going, man. You know, it’s going into brand wars. And it’s, it’s going into brand carteling, based upon who you are and where those brands are important in your life. And I think people need to be aware of that. I think people need to be aware of that and sort of the trademark aspect that you’re talking about. And then to everything that you were talking about with the UDP and those pieces, you know, what is there beyond fair use and, and how do you really protect your brand online and, and how do you handle your reputation management if you really piss someone off. Like what if someone went out and spent the money to buy Comcast.sucks?
Anthony Verna:
I would say there’s an ability to, under the U S Constitution we have a first amendment right to at least express an opinion about a company. But on the same token, you don’t have the ability to block that business’ ability to do commerce in many states. And you don’t have a right to defame a company. No. And frankly, when it comes to a domain name, it’s straight out trademark infringement if you’re taking that domain name and either using it to just resell and make a profit or using it to really speak poorly about the company that domain name’s about.
Oz Sultan:
In a lot of cases, you know, when it’s expletive or F-word or something like that name, it’s kind of clear cut. The problem that you sort of run into is it’s the opposite of what exactly was the term. It’s all of this revenge porn stuff that was going on online. I mean, that guy just got 18 years. And realistically what that could be used at looked at is it’s an infringement issue on the rights of the content holder. It’s also an issue of interstate commerce fraud for underage sex trafficking. Okay. So weird things that kinda come into play with all of these little digital tools.
Anthony Verna:
That’s really the law of unintended consequences in play for the dot sucks, we know ICAN was looking to create conversations and they really, ICAN really want it to have something like life.sucks or divorce.sucks. And, maybe it’s a little on the controversial side, but the idea was that these domain names are about things that hurt people and they didn’t really think that through that their property that some people might take it to complain about others.
Oz Sultan:
Well, no, you’re a name of person dot sucks. Name of religion dot sucks and name of political concept dot sucks. It’s really open, it’s a shooting gallery of sorts.
Anthony Verna:
Absolutely. But, we’re talking about intellectual property protection in general and that’s trademark protection. Copyright protection comes in with businesses that create works that fall under copyright law. And just like we just talked about having a sliding scale, where’s your ability to protect, say with copyright law, where’s your ability to protect and what makes sense and what doesn’t make sense? I’m not a game of Thrones fan. But you certainly have seen game of Thrones downloading. That’s right.
Oz Sultan:
Well, so eight million viewers. Okay. For the premiere on HBO, which is a pay service. And that also includes HBO Go. I believe they factored in there. I called it game of buffering because I was trying to watch it on HBO Go. And that just didn’t happen. You would think that if they can have 20 million people watching the Victoria’s Secret angel show that HBO would get their act together given the fact that that Victoria’s Secret thing happened 10 years ago. Maybe they need to fire their CTO. I don’t know. Or maybe they need to call my buddy Robbie over at Ramp Rate.
Anthony Verna:
Oh, sure. Just keep plugging all your friends.
Oz Sultan:
I’m just going to plug all my friends.
Anthony Verna:
I’m going to say hi to Raj of Braden Link. Hey, how ya doin’, Raj?
Oz Sultan:
It’s just like it’s ludicrous. It’s absolutely ludicrous. You could go…
Anthony Verna:
I want to say hi to my fiancee, Michelle at New York Funeral Consultant, if you’re planning a funeral, call Michelle. I’m sorry.
Oz Sultan:
I haven’t been an applied gas for a while. These are germane conversations, other conversations you and I are having. There’s brand issues there. So, one is HBO had a bit of a fail, but there’ll be fine because people figure out how to watch it. But what people were worried about inside of the industry two weeks ago was, Oh my God, everyone’s been to take Periscope, or Merecats, or they’re going to take a String Wire and and they’re going to record this and then they’re going to syndicate it and everyone will be watching it on Twitter.
Anthony Verna:
And didn’t major league baseball issue a press release stating that they wouldn’t stop fans from using Periscope in stadium stadiums.
Oz Sultan:
Correct. And, and you know, I think what you have to consider as major league baseball is taken this as is probably the smartest because, not everyone wants to buy the bootleg DVD from the Asian guy who sells them in my McDonald’s, right around the corner from my house.
Anthony Verna:
Those of us who live in urban areas. I mean, we’ve had that experience before in a bar, somebody just like walks in with a whole stack of bootleg DVDs and movies that came out yesterday and the bouncers are trying to figure out how to boot the guy quietly. And of course, they’re getting better. Bootlegs are getting better, but, but I think when it’s something through Periscope, you’re still dealing with the limited quality, the limited quality experience. I mean, even Periscoping abut I can’t believe I just used it as a verb, but, but even broadcasting through Periscope, a baseball game, it means that somebody who’s holding his cell phone up during the game. It’s not a television quality camera. It’s not television quality broadcasting. It’s limited, but that’s one app as compared to downloading Game of Thrones, which, which we know happens. We know that there’s bootleg out there. We know that you can get the torrents and start downloading and get the the high definition file.
Oz Sultan::
Well, and then let’s go to the second problem with this. So, all of a sudden, the first five episodes of GoT (Game of Thrones) are available in the Tor network. They’re available as torrents. They’re they’re all over the place. Right? And you know, there’s nothing in addition to plot reveals, which are pissing people off. And you know, Google has, well, it’s interesting Google, Google just patented preventing spoilers from your search results based upon their indexing way too much data about your life. So that’s their latest patent falling. But we live in this very interesting world where on the one side, you have to, to maintain your brand and protect your brand. But let’s kinda think about this, right? In a way, Game of Thrones by allowing that kind of piracy is going to allow the dissemination of this to drive larger fan bases than they’ve ever had before.
And at the same point in time, because seasons one through four are now available on HBO Go, which just happened to deploy on an Apple device. Everyone who has access on PlayStation 4 Okay, but the market penetration of PlayStation 4 is versus Apple TV devices, is infinitesimal. So, all I’m thinking is in a way by their allowing for the brand co-option and allowing for the brand, dilution as you would think about it. They’re actually allowing for the success of this because this is just going to get bigger and bigger and more popular, more popular. However, that doesn’t necessarily apply to things like Adidas. Right. Where I think anyone here who’s traveled to Latin America or in the Middle East or some Southeast Asian country has seen a Adidos. My favorite is Nikke.
You know, it’s not Nike, it’s Nikke. Yeah. Yeah. It’s an that’s getting better. There was a actually going to a house, like Game of Thrones, but House of Lies, right? So, OK. Recently in House of Lies, Marty’s son became very unpopular because he got caught selling basically knock off high end designer bags, which as we know in New York is a big thing, you know, for tourists, tourists coming to Canal Street, it’s like you don’t think that you’re going to go into some back room on Canal Street and get a brand new Valencia bag for fricking 300 bucks. You know, it’s just not going to happen.
Anthony Verna:
$30, $30, $30. And, I will say counterfeiting of product has gotten better in times the quality of the product is better, but you will still see differences, differences in stitching, differences in the quality of maybe the inner liners, maybe the zipper is a different quality. A lot of people don’t realize you do pay for what you get. And if you’re paying $30 for a bag, it’s not going to be the same quality.
Oz Sultan:
It’s not just the quality. It’s, I mean, in a lot of cases, think about this. You’re paying for design. Yes. You’re paying for the conceptualization, you’re paying for the salaries of a ton of people to produce this. You’re then paying for the production mechanism and transport of it, and then you’re paying for the people who are selling it to you in boutique so that they can give you odd faces. If you sort of, not necessarily disrupt, but if you disintermediate that model by going and buying something bootleg, yeah. There’s multiple ramifications. One is the economic ramification. Two is the fact that if someone catches you with it, you’ll just be made fun of. But three is the fact that it’s somewhat harmful to the brand. Yes. I think that’s the the United States. I think it’s the of, it’s the FTC in conjunction with like two other departments destroys like they confiscate and destroy something about how something like a billion dollars a year.
Anthony Verna:
So, how something can get destroyed comes from a myriad of different ways. I mean obviously if something’s brought into the US through customs and there is a registered trademark, the registered trademark owner has to be a federally registered mark. This is one of those hidden benefits of having a federally registered mark is that the business owner can have customs actively help in grabbing counterfeit goods and then destroying the counterfeit goods. And the importer can pay fines up to the retail cost of the goods. So, if it’s bought at wholesale and then of course retail is double the price and that means the fine could be double the price. So that means that the importer is out the cost of the goods plus the retail cost of the goods as well. So, double that in that loss. So, there are high fines for it and obviously you can be fined storage fees as well as their structured fees. So, there are high fines for importing counterfeit goods.
Oz Sultan:
Right. Well, one other thing I’ll add too is, and so this loops back to our talk about social media this morning, one of the biggest places to find counterfeit goods is Instagram and you have folks who are not necessarily in this country, , they could be in Mia, so Europe- Middle East region, sometimes in Asia, but largely what they do is they’ll have, it’s close enough looking. You know, I mean, you and I both worked in the industry with a couple of marks, so I think we can kind of look at stuff and be like, yeah, that’s off. It just looks off. But I think a lot of people just don’t know. And if you were to say just, what is it Louis Vuitton through Chanel clutches, it’s like average somewhere in between $595 to $1395 each.
When you have someone selling for $295 on Instagram plus shipping and we’ll ship anywhere in the world. When you look at it and it’s like I don’t think Chanel uses cheap brown paper and tape to take like portions of their their straps. There’s that. But I think maybe, well there’s a follow up to this. I’ll put a, an article on LinkedIn cause I’ve got a lot of that content captured and we can discuss that. But you know, it’s bad for you in the long run because you look foolish. It’s bad for the brand in the long run because they’ve lost a sale and it’s, I think bad economically because realistically you’re not pouring those dollars in a way that they’re actually going to benefit a company that’s going to reinvest in our country. You’re benefiting someone who’s probably using sweat labor or slave labor somewhere else to make something of substandard quality.
Anthony Verna:
Yes, yes. As a business owner that owns intellectual property, all of these of businesses need to consider the economic cost and ramification of the hard fisted tact as well as the let everything go tact. I mean, if we let everything go, effectively all of your registrations and all of your intellectual property isn’t worth the media that you’ve done. It’s put on. But the hard fisted is you go after everybody. And I know a lot of business owners don’t like to be seen as being a bully, but there’s an economic cost to letting to letting infringements go, whether it’s trademark infringement, copyright infringement. There’s that economic reality and that economic reality is that you let a sale go, you let substandard products into the marketplace. You may think that your consumers would prefer maybe a lesser quality than what you’re giving. You know, especially if stuff just gets out there for free.
Oz Sultan:
If stuff gets out there for free, it’s a challenge and I that’s like a good way to bridge into maybe some final thoughts, but also talking about freemium versus premium. A great way for people who are selling virtual products and goods and services is to allow freemium version for premium. And in a lot of cases people will convert with that. If you’re talking about traditional goods and services in the brand mark associated there too, there’s a necessity to be vigilant and there’s a necessity I think to maintain your trademark or get your brand mark. And I think there’s a necessity to look at things from the perspective of there is some fair play you will allow in terms of its co-option or if someone is for example, there’s other folks I’ve seen on Instagram, who will take a Louis Vuitton bag and they’ll decorate it and then they’ll sign. It’s basically like such company X, Louis Vuitton, which is very much like, what we’ve seen Yeezy ex Adidas recently with your $2 to $20,000 a day to shoes.
Anthony Verna:
And of course the, the legality or lawfulness of that is in a gray zone because on the one hand, these are two companies that aren’t really doing business with each other. But on the other hand, we have something called the first sale doctrine. But still when you’re, when those two collide is fills a gray area in a situation like that.
Oz Sultan:
Right. You know, and, and I think that the simple fact that you’ve got larger brands sort of annointing these types of collaborations, it makes other brands say, well, you know, I can’t really be too harsh in regards to these folks that are extending my brand reach by making my brand a little bit cooler than the way that we can necessarily make it cool because we’re a little bit too corporate or because you know what, that just doesn’t necessarily fit our style. But if you like having something original, I think a lot of people do. And I think, you know, looking at norm core, looking at half of the stuff that’s out there is, it’s being original in a sea of similarities to the degree that you think that your original to yourself, right? I know maybe this kind of definition, it’s like a hipster.
Anthony Verna:
I feel like I’m having a shark tank moment. “There’s nothing proprietary in this …”
Oz Sultan:
Exactly. Exactly.
Anthony Verna:
So I guess our general thought is that if you’re a business owner, you seriously need to consider how hard you are protecting your intellectual property regardless of what form the IP is, right? Because economically it might cost you a little extra. Either you don’t have a cease and desist letter be written right by counsel, or to pick up the phone and say there’s something infringing here. But ultimately the economic benefits will overcome that little bit of pain.
Oz Sultan:
Absolutely. And I think also the point is you need to understand if it’s digital media, traditional media, a digital product or a traditional product, and what is the opportunity afforded to you by allowing this and what is the impact afforded to you by pursuing it, right? If you chase them, is this going to make you look foolish? And if you allow it, is it gonna make you look better and sell more goods? So, it’s a very fine line that you’re kind of treading these days, especially with the way that the social medium is evolving so quickly.
Anthony Verna:
I always have people ask me because they find themselves as defendants in lawsuits and they always say, well, what if I just go to the press with this? And I said, well, what do you think the press is going to do? Well, they’re going to see that this company is a bully. I go, probably not. You know, probably not. It probably because the plaintiff has some kind of trademark claim and the press looks at this and says, I don’t really understand this area of law myself. And it doesn’t necessarily seem as if there’s something bullying going on. I felt a little different with the eat more chicken, eat more kale this year because I think inherently a lot of people understood that eat more kale when you know represented a company that was not fast food.
Oz Sultan:
I mean you’re, you’re not going to see more kale and think, Oh my God, they’re ripping off Chick-Fil-A. I know. I think that there’s that decided separation there. The same thing can be alluded to the new no angels campaign that basically puts natural sized women and plus size women alongside the idiom of what Victoria Secret was pushing, which is basically lingerie for anyone up to a size six, right? Or realistically more like an average size two. And that’s fine. You know, I just kind of think it’s becoming very interesting that where do you want to pick and choose your battles with this stuff? Because you are not necessarily trying this in court the way you used to.
You are being tried in the eyes of society and if you do this the wrong way, you can hang yourself out to dry. You could also pretty much ruin your entire customer base as we saw with, the social media debacle with that small restaurant in Arizona that had been in a Gordon Ramsay show that then subsequently got into a massive sort of internet verbal fist fight.
Anthony Verna:
Started on Yelp and bled over to Facebook.
Oz Sultan:
And bled to Reddit first, remember. That it started in Yelp and bled to Reddit. Then it bled to Facebook and they were ridiculed because they couldn’t even get the nomenclature right. They didn’t know what this, they’re like, you know, you Reddits, go to heck. And it’s like, well, they’re actually called Redditors or, you know, and the same way we’re called New Yorkers and Pennsylvania are called Pennsylvanians.
Not Pennsylvanias. You Pennsylvanias! I mean it’s substantial and also sometimes a mia culpa is needed if something stupid happens. After all of that, they try to Mia culpa, you might as well just change your brand at that point.
Anthony Verna:
Sure.
Oz Sultan:
After you’ve had a protracted three months flame war with everyone who is challenging you on some of the most basic things.
Anthony Verna:
It really says that in these particular areas, businesses need to get experts in those areas to help, whether it’s social media and exactly what it is. Thank you for coming.
Oz Sultan:
Absolutely.
Anthony Verna:
And we shall do this again soon.
Oz Sultan:
I think we shall. This is a good dynamic.
Anthony Verna:
I agree completely.
Oz Sultan:
Excellent.
Anthony Verna:
Thanks, Oz.
Oz Sultan:
All right. Bye bye.