Dana and Ronnie operate a Web-based business, TraderRon.com, an Internet swap si
ID: 2649827 • Letter: D
Question
Dana and Ronnie operate a Web-based business, TraderRon.com, an Internet swap site that uses a Dutch auction system pioneered by Priceline.com. TraderRon.com allows customers to make offers to other customers to swap such items as their unused frequent flyer miles for other customers' unwanted merchandise, including DVDs, music CDs, used books, and any other merchandise customers might want to trade. No sales involving payment of money are made on the site. Some of the merchandise that has been offered on the site and swapped consists of bootleg or pirated merchandise, as well as designer knockoffs. All of TraderRon.com's income derives from advertising.
TraderRon's website and advertising use a black and grey symbol to represent its swapping service. It has used this symbol consistently and registered it with the U.S. Patent and Trademark Office. The symbol is very similar to the Nike swoosh symbol, except it fades from black to grey from left to right. TraderRon.com uses a multimedia presentation to explain its operation to users. The multimedia presentation was created by a friend of Dana's as his senior portfolio project at school, where he was majoring in website design and multimedia. Dana paid him with a free trip to the Caribbean, which she had won in a contest. No copyright was registered in connection with the multimedia presentation.
TraderRon.com sends a weekly e-mail update to customers who have registered on the site. The e-mail is sent via an e-mail address Ronnie established at Yahoo.com. TraderRon.com's customers are located throughout the U.S. and some are overseas.
What intellectual property and Internet law issues are raised by TraderRon.com's business model? What sort of liability is the business risking? What legal implications could arise from using the Yahoo.com e-mail account for swap.com
Explanation / Answer
The intellectual property in this case is the multi media presentation which TraderRon.com uses to explain its operations to users.
A copyright has not been registered for this presentation. Having no copyright on the presentation is a risk as TraderRon.com does not have the exclusive rights to use the presentation.
Secondly, TraderRon.com helps the swapping of certain bootlegged items which are not allowed by law. This can land them in legal trouble as the sale or swap or any form of dealings in bootlegged items is not allowed. TraderRon.com should immediately remove such items from their website.
Thirdly, the website has few items which are knockoffs of original designer items. The makers of these original designer items can carry legal action against TraderRon.com as they are dealing in knockoffs. Hence, TraderRon.com should remove such items from their website.
The company is using yahoo.com's e-mail account for mass e-mailings. If this is a business e-mail listed on Yahoo domain, then there should be no problem. If for example, the e-mail id is marketing@traderron.com. This e-mail id is listed on the Yahoo domain and TraderRon.com pays an annual amount of $10 to Yahoo for using this e-mail id registered on Yahoo's domain. In such a case, there will be no legal ramifications of using the e-mail id for mass e-mailings.
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