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You are here: Home  What's New  4/14/01 - 7/31/01

What's New on KEYTLaw - 4/14/01 - 7/31/01

FTC Focuses on Safety Risks of Comfrey Products Promoted via Internet

 The Federal Trade Commission announced a second case challenging the marketing and selling of unproven and dangerous comfrey products via the web.

FTC Focuses on Safety Risks of Comfrey Products Promoted Via Internet

The Federal Trade Commission announced an additional case challenging the marketing of unproven and dangerous products via the web. The FTC alleged that a manufacturer and marketer of a variety of products containing the herbal ingredient comfrey made unfounded claims that the products were beneficial in the treatment of a wide variety of serious diseases and conditions and that they were safe.

Netpliance Settles FTC Charges Involving Internet Access Device

The marketer of a device being advertised as a less expensive alternative to the PC for internet access and e-mail has agreed to settle Federal Trade Commission charges that its sales and billing practices violated federal laws. The agency charged Netpliance, Inc., with deceptive advertising, unfair billing, misrepresenting federal laws and violating a series of other federal laws, including the Mail or Telephone Order Merchandise Rule, the Truth-In-Lending Act and Regulation Z.

Notorious Cybersquatter Liable for $500,000 under the Anticybersquatting Consumer Protection Act

Typosquatting can be profitable, but John Zuccarini found that it comes with a high cost of doing business.  Zuccarini,  the internet's most infamous cybersquatter, lost two lawsuits in the last year brought under the Anticybersquatting Consumer Protection Act (the "Act").  Two federal courts ordered him to pay statutory damages totaling $550,000 plus attorneys' fees and costs of more than $60,000.  Mr. Zuccarini is single-handedly helping to make new law favorable to trade mark owners that assists them in their war against domain name cybersquatters.

Internet Pyramid Artists Settle FTC Charges

Defendants in a pyramid scheme that disguised itself as a legitimate work-at-home operation have agreed to settle Federal Trade Commission charges that the scheme violated federal laws. The settlement bans the defendants from engaging in pyramid schemes, bars misrepresentations about the availability and profitability of jobs and requires that the defendants pay $72,000 in consumer redress.

Credit Repair Operator Settles FTC Charges

The operator of a web site that sold credit repair advice and promised "perfect credit . . .instantly" agreed to settle Federal Trade Commission allegations that his scheme violated federal law.  The scam was identified in "Operation New ID - Bad IDea," an FTC initiative targeting illegal "credit repair" services.

FTC Sues Nationwide Internet Scam Involving Healthcare Products

The Federal Trade Commission sued a an internet operation it claimed was posing as a legitimate multi-level marketing business. The FTC charged that the scheme is actually an illegal pyramid that uses phony promises of easy income to scam consumers from across the country.

FTC Sues to Halt Deceptive Internet Access Fee Scam

The FTC sued an internet business that conned consumers into paying membership fees and turning over sensitive personal and financial information by deceptively claiming it would pay their internet access fees. The agency charged that more than 50,000 consumers were taken in by the scam and that the defendants actually paid the access fees for fewer than five percent of them.

Court Appoints Temporary Receiver over International Internet Pyramid Operation

The Federal Trade Commission asked a federal Judge to halt the unlawful operations of SkyBiz.com, charging that the operation that purports to sell online tutorials on web-based products is actually a massive illegal pyramid scheme that may have conned consumers around the world out of approximately $175,000,000.  The court temporarily halted all unlawful activities of the SkyBiz operation, frozen the defendants' assets to preserve them for consumer redress, and appointed a receiver.

Typosquatter Liable for Statutory Damages of $10,000 per Domain Name

On June 15, 2001, the United States Court of Appeals for the 3rd Circuit, in case of Shields v. Zuccarini, upheld a federal district court award of statutory damages of $50,000 plus attorneys' fees of $39,109 in the court's first case involving the Anticybersquatting Consumer Protection Act, 15 U.S.C. § 1125(d) (the "Act").  This case provides a lot of ammunition for owners of famous trade marks who desire to obtain infringing domain names plus obtain money damages and attorneys' fees from cybersquatters and typosquatters.

Spammers Beware of Washington's Anti-spam Law

On June 7, 2001, the Washington Supreme Court, in the case of State of Washington vs. Jason Heckel, upheld the State of Washington's anti-spam law on an appeal from the Superior Court of King County.  The State of Washington sued Oregon resident Jason Heckel alleging that his transmissions of email to Washington residents violated Washington's anti-spam law, Chapter 19.190 RCW.

Internet Pyramid Promoters Settle FTC Charges for $5 Million

Operators of an internet-based business opportunity that promised easy income for investors in an internet shopping mall network settled FTC charges that their scheme was an illegal pyramid operation.  Under the terms of the settlement, Bigsmart.Com L.L.C., and its principals will provide up to $5 million in consumer redress and post a $500,000 performance bond before engaging in any new multi-level marketing activity.

FTC Halts Domain Name Scam

The Federal Trade Commission asked a federal Judge to halt an internet domain name scheme that dupes consumers into needlessly registering variations of their existing domain names by deceptively contending that a third party, acting in bad faith, is about to claim it. The court issued a temporary restraining order, frozen the defendants' assets, and shut down their Web sites, pending trial.

Internet "Pagejacker" Settles FTC Charges

The FTC shut down a scam that copied existing web sites and inserted coded instructions in the copycat sites which automatically redirected consumers to adult sites. Then the scammers disabled the browser's "back" and "exit" commands so that Internet surfers trying to escape the pornographic images faced screen after screen of similar material and advertisements for other adult sites.

Law Enforcement Cracks Down on Deceptive Spam

The FTC and federal and state law enforcement partners brought hundreds of actions in the past year against scam artists who used the mail, unsolicited faxes and e-mail "spam" to bilk millions of dollars out of consumers and businesses.  For the fourth straight year, the FTC, U.S. Postal Inspection Service, Securities and Exchange Commission and National Association of Attorneys General partnered to stop a wide variety of deceptive offers sent to consumers via direct mail, by e-mail or fax.

Benefits of Federally Registered Trademarks & Service Marks

A federally registered trademark can be a very valuable intellectual property asset.  This article explains the benefits of having a federally registered mark.  If you currently produce or intend to produce a product, provide a service or operate a web site on the internet, and if you engage or will engage in interstate commerce, you should consider applying for and obtaining a federal trademark or service mark to identify the source of your goods or services.  

ICANN Approves .biz & .info TLDs

The Internet Corporation for Assigned Names and Numbers (ICANN) announced on May 15, 2001, that it signed accreditation agreements with new registry operators NeuLevel for the top level domain (TLD) ".biz" and Afilias for the TLD ".info."  NeuLevel and Afilias are now free to issue the first new global top level domain names since the mid 1980s. 

Gateway Settles FTC Charges over Free Internet Service Claims

Gateway, Inc., one of the largest domestic marketers of personal computers, has agreed to settle Federal Trade Commission allegations that the company misrepresented the cost of its "Gateway.net" Internet access service. According to the FTC, so-called "free" or flat-fee services offered by Gateway actually resulted in significant additional charges to many consumers - a fact inadequately disclosed by the company.

Juno Online Services Settles FTC Charges Over Internet Service Advertisements

The Federal Trade Commission has reached a consent agreement with Juno Online Services, Inc., a national Internet Service Provider, over charges that advertising for its "free" and fee-based dial-up Internet access services was deceptive, in violation of Federal law. According to the FTC, Juno engaged in several deceptive practices that made it unreasonably difficult for some consumers to cancel its so-called "free" trial period for its Premium Internet service, causing these consumers to be billed for service they no longer wanted. Other FTC allegations include the charge that Juno also failed to disclose adequately that some subscribers to its Internet services would incur long distance telephone charges while connecting to the Internet.

For Trademark Owners:  How to Find Cybersquatters Infringing on Your Mark

More than 33,000,000 domain names have been registered, including tens of thousands of domain names that infringe on trademarks and service marks.  If you own a trademark or service mark (whether federally registered or not), do you know if there are any domain names that infringe on your trademark?  Trademark owners have a duty to police their marks and prevent other parties from infringing on their trademarks and service marks.

KEYTLaw FAQ: ICANN's Uniform Dispute Resolution Policy

Trademark owners and domain name owners should know their rights under the UDRP.  It is a strong weapon for trademark owners and a potentially big problem for owners of domain names that are the same or identical to a trademark or service mark.  The UDRP is explained from A to Z.  What is it?  How does it work?  How long does it take?  What must a trademark owner prove?  What defenses does a domain name owner have?  What are the results?  Can the domain name owner appeal an adverse decision?

How to Obtain a Domain Name that Does Not Infringe on a Trademark

You have an idea for an online business and to your surprise, the domain name that you want is available.  You register the domain name, spend a lot of time and money to create a killer web site and open for business on the internet.  Business is good and prospects are even better until one day you receive a certified mail letter from the lawyer for XYZ, Inc., notifying you that: (i) your domain name infringes on XYZ's federally registered trademark, (ii) you must immediately cease and desist from using the domain name and all references to the trademark, (iii) you transfer the offending domain name to XYZ, and (iv) you pay XYZ damages equal to all the profits made by your online business.

The Anticybersquatting Consumer Protection Act

The ACPA  is a federal law that took affect on November 29, 1999.  It is intended to give trademark and service mark owners legal remedies against defendants who obtain domain names "in bad faith" that are identical or confusingly similar to a trademark or service mark.

FTC Halts Web Hosting Service that Billed Consumers Thousands in Bogus Bandwidth Charges

April 3, 2001.  Washington, D.C.  A United States District Court has halted the operation of a Web site hosting service that advertised services for flat fees ranging from $10 to $15 dollars but then crammed unauthorized charges of up to $20,000 onto consumers' credit cards for supposed "excess bandwidth" use.

FTC To Be More Creative Combating Online Fraud

April 5, 2001.  Washington, D.C.  Since 1994, the Commission has brought 170 Internet related cases against over 573 defendants. It obtained injunctions stopping the illegal schemes and ordering more than $180 million in redress and obtained orders freezing millions more in cases that are still in litigation.

Web Crammers Settle FTC Charges

April 17, 2001.  Washington, D.C.  Web site operators who billed consumers for "free trials" have agreed to settle Federal Trade Commission charges that their practices were deceptive and violated federal law.

FTC Fines COPPA Violators $100,000

April 19, 2001.  Washington, D.C.  The Federal Trade Commission announced settlements with three web operators for violations of the Children's Online Privacy Protection Rule. The FTC charged three web site operators with illegally collecting personally identifying information from children under 13 years of age without parental consent, in violation of the COPPA Rule.  The companies together will pay $100,000 in civil penalties for their COPPA violations.

Internet Fraud: How to Avoid Internet Investment Scams

The Internet serves as an excellent tool for investors, allowing them to easily and inexpensively research investment opportunities. But the Internet is also an excellent tool for fraudsters. That's why you should always think twice before you invest your money in any opportunity you learn about through the Internet.

Web Site Legal Audits

There are many laws and regulations that apply to doing business on the internet or operating a web site.  Violating a law can subject a web site owner to substantial civil liability, including the risk of defending a class action lawsuit.  In addition, some online activities such as offering an illegal lottery instead of a legal sweepstakes can impose criminal liability if not done properly.  Web site owners should know and understand what laws or rules apply to their web sites.

Selling on the Internet:  Prompt Delivery Rules

The Rule spells out the ground rules for making promises about shipments, notifying consumers about unexpected delays, and refunding consumers' money.

Dot Cons

The Internet has spawned a whole new lexicon and brought the world to your living room, 24/7/365. And while the opportunities online for consumers are almost endless, there are some challenges, too. As in dot con.

General Advertising Policies

The FTC's advertising guidelines and rules on many common ads such as: bait and switch, catalogs, children's advertising, comparative ads, contests and sweepstakes, credit, disclosures and disclaimers, endorsements and testimonials, food ads, franchises and business opportunities, free claims, guarantees, internet advertising, leasing, mail order advertising, pricing,  and rainchecks.

Frequently Asked Questions:  A Guide for Small Businesses

This FAQ answers common advertising questions such as when does truth in lending laws apply to ads and what makes an ad deceptive.

Guide to Online Payments

The Internet has taken its place next to the telephone and television as an important part of people's lives. Every day, more consumers are using the Internet for financial activities like investing, banking, and shopping. How do they do it? Most use charge, credit or debit cards to pay for their online purchases. Increasingly, however, new payment methods are becoming more common.

Electronic Commerce:  Selling Internationally, a Guide for Business

Thinking about doing business online, or expanding your outreach on the web?  Consumers around the world are increasingly turning to their computers to buy a wide array of goods and services.

Top 10 Urban Copyright Myths

The Internet has spanned many urban legends about copyright laws.  Copyright myths travel at light speed and replicate their plausible, but flawed logic at the touch of a computer key.  The following is KeytLaw's unscientific list of the top ten copyright myths.

The Risk of Allowing Somebody to Charge Sales on Your Credit Card Merchant Account

If you have a credit card merchant account for your online business and are approached by a person or company that asks to make credit card sales using your merchant account, do not do it.  Not only do you risk problems with your merchant bank because it is a breach of your merchant account agreement, but it could also be a violation of federal law. 

Fair Use

The most common defense to allegations of copyright infringement is that the alleged infringer made a "fair use" of the work.  The fair use defense, however, is relatively narrow and much misunderstood by the public.

Works Made for Hire Under the Copyright Act

The general rule is that the person who creates a work is the author of that work.  However, there is an exception to that principle.  The copyright law defines a category of works called “works made for hire.”  If a work is “made for hire,” the employer, and not the employee, is considered the author.

Sonny Bono Term Extension Act Extends Copyright Terms

The Sonny Bono Copyright Term Extension Act, signed into law on October 27, 1998, amends the copyright laws by extending the duration of copyright protection.  In general, copyright terms were extended for an additional 20 years.  


This page was last modified on July 22, 2007.

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