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July 17, 2008

Google Ad Revenue Share Up, and Spam is Most of Your Email

Statistics, we've got statistics.  Google's share of online ad market revenue is 77%.  Google really knows how to monetize search, but we all knew that.  Yahoo! comes in at 17.8% and Microsoft at 4.8%.  Microsoft is trying to buy the wrong company.  More here.  And, figures show that spam made up 81.5% of all email sent in June.  Yow!  I might even be able to read some of it if I knew how to read Chinese or Cyrillic characters.

July 17, 2008 | Permalink | Comments (0) | TrackBack

July 15, 2008

Google Search Share Up, Microsoft and Yahoo! Squabble

Google's share of search is just about 70% according to the latest figures from Hitwise.  Yahoo! and Microsoft dropped fractions of a percent to 19.62 and 5.46 respectively.  That cash bribe rebate program announced a while back for Live Search has really brought them in.  This is all on the heels of news that Microsoft made a Carl Icahn brokered deal for the Yahoo! search function over the weekend which the current Yahoo! board rejected.  The reports are that Microsoft gave a 24 hour take it or leave it condition with no opportunity to negotiate.  There are various interpretations from Microsoft and Yahoo! as to how the deal's financials would stack up, with each side blaming the other for failure.  This sets the stage for the proxy fight that may determine whether Yahoo! stays an independent company, or a shell of its former self.

What happens to Yahoo! if it sells only search.  Can a Icahn led Yahoo! operate profitably under these circumstances?  What favors Yahoo!'s current board is the Icahn doesn't seem to have a plan B for running the rest of the Yahoo! properties.  Yahoo! stockholders will get some return on the sale for search to Microsoft, but may well be stuck with limited revenues from whatever is left, which likely means stock that is worth even less than today.  The best hope is that Icahn can deliver a sale of the entire company to Microsoft at a decent price.  That may be significantly less that the $33 share rejected by the Yahoo! board, but more than the stock is currently worth.   

As for the current board's approach, an advertising deal with Google, the United States Senate is holding a hearing on that, not that the Senate has anything to say about it as a regulatory matter.  The Committee will hear from representatives from Google (for), Yahoo! (for), Microsoft (against), AT&T (against), and Askthebuilder.com (for).  The Senate page for the hearing is here.

July 15, 2008 | Permalink | Comments (0) | TrackBack

July 14, 2008

Tiffany Loses Infringement Suit Against eBay

eBay has successfully defended a suit brought by Tiffany for trademark infringement and sale of counterfeit Tiffany goods on the auction site.  The Court describes the issues and its conclusions in a series of paragraphs prior to the analysis.

From the lengthy court opinion:

Specifically, Tiffany alleges that hundreds of thousands of counterfeit silver jewelry items were offered for sale on eBay’s website from 2003 to 2006. Tiffany seeks to hold eBay liable for direct and contributory trademark infringement, unfair competition, false advertising, and direct and contributory trademark dilution, on the grounds that eBay facilitated and allowed these counterfeit items to be sold on its website.

Tiffany acknowledges that individual sellers, rather than eBay, are responsible for listing and selling counterfeit Tiffany items.  Nevertheless, Tiffany argues that eBay was on notice that a problem existed and accordingly, that eBay had the obligation to investigate and control the illegal activities of these sellers — specifically, by preemptively refusing to post any listing offering five or more Tiffany items and by immediately suspending sellers upon learning of Tiffany’s belief that the seller had engaged in potentially infringing activity. In response, eBay contends that it is Tiffany’s burden, not eBay’s, to monitor the eBay website for counterfeits and to bring counterfeits to eBay’s attention. eBay claims that in practice, when potentially infringing listings were reported to eBay, eBay immediately removed the offending listings. It is clear that Tiffany and eBay alike have an interest in eliminating counterfeit Tiffany merchandise from eBay — Tiffany to protect its famous brand name, and eBay to preserve the reputation of its website as a safe place to do business. Accordingly, the heart of this dispute is not whether counterfeit Tiffany jewelry should flourish on eBay, but rather, who should bear the burden of policing Tiffany’s valuable trademarks in Internet commerce.

Having held a bench trial in this action, the Court issues the following Findings of Fact and Conclusions of Law, as required by Rule 52(a) of the Federal Rules of Civil Procedure. Specifically, after carefully considering the evidence introduced at trial, the arguments of counsel, and the law pertaining to this matter, the Court concludes that Tiffany has failed to carry its burden with respect to each claim alleged in the complaint.  First, the Court finds that eBay’s use of Tiffany’s trademarks in its advertising, on its homepage, and in sponsored links purchased through Yahoo! and Google, is a protected, nominative fair use of the marks.

Second, the Court finds that eBay is not liable for contributory trademark infringement. In determining whether eBay is liable, the standard is not whether eBay could reasonably anticipate possible infringement, but rather whether eBay continued to supply its services to sellers when it knew or had reason to know of infringement by those sellers. See Inwood Labs., Inc. v. Ives Labs., Inc., 456 U.S. 844, 854 (1982). Indeed, the Supreme Court has specifically disavowed the reasonable anticipation standard as a “watered down” and incorrect standard. Id. at 854 n.13.  Here, when Tiffany put eBay on notice of specific items that Tiffany believed to be infringing, eBay immediately removed those listings. eBay refused, however, to monitor its website and preemptively remove listings of Tiffany jewelry before the listings became public. The law does not impose liability for contributory trademark infringement on eBay for its refusal to take such preemptive steps in light of eBay’s “reasonable anticipation” or generalized knowledge that counterfeit goods might be sold on its website. Quite simply, the law demands more specific knowledge as to which items are infringing and which seller is listing those items before requiring eBay to take action.

The result of the application of this legal standard is that Tiffany must ultimately bear the burden of protecting its trademark.  Policymakers may yet decide that the law as it stands is inadequate to protect rights owners in light of the increasing scope of Internet commerce and the concomitant rise in potential trademark infringement.  Nevertheless, under the law as it currently stands, it does not matter whether eBay or Tiffany could more efficiently bear the burden of policing the eBay website for Tiffany counterfeits — an open question left unresolved by this trial. Instead, the issue is whether eBay continued to provide its website to sellers when eBay knew or had reason to know that those sellers were using the website to traffic in counterfeit Tiffany jewelry. The Court finds that when eBay possessed the requisite knowledge, it took appropriate steps to remove listings and suspend service. Under these circumstances, the Court declines to impose liability for contributory trademark infringement.

Third, the Court finds that Tiffany has failed to meet its burden in proving its claims for unfair competition. Fourth, in regard to Tiffany’s claim for false advertising, the Court concludes that eBay’s use of the Tiffany trademarks in advertising is a protected, nominative fair use of the marks.  Finally, the Court finds that Tiffany has failed to prove that eBay’s use of the TIFFANY Marks is likely to cause dilution. Even assuming arguendo that Tiffany could be said to have made out a claim for trademark dilution, the Court finds that eBay’s use of the marks is protected by the statutory defense of nominative fair use.

Accordingly, the Court hereby enters judgment for eBay.

Yes, it's trademark law and not copyright, but doesn't some of the issues described sound a lot like Viacom and Google?  Just asking.

The text of the full 66 page opinion, Tiffany (NJ) Inc. and Tiffany and Company v. eBay, Inc. 04 Civ. 4607 (RJS) from the Southern District of New York, is here.

July 14, 2008 | Permalink | Comments (0) | TrackBack