Earlier today, June 12, you may have received numerous memos from law firms and bloggers eager to respond to the announcement by Facebook that it is allowing trademark owners to notify Facebook of their IP rights through use of a special electronic form. The purpose is to allow trademark owners to record their IP rights in advance of Facebook allowing its users to register personalized Facebook URLs. While we applaud advising clients and friends of issues, we think the matter is considerably more complicated than previous briefs and hasty reports may indicate. As is so often the case, the devil is in the detail, and this memorandum provides a deeper look at the process and related issues before undertaking Facebook's new program to record trademarks.

Facebook Announcement

On Tuesday, June 9, Facebook, Inc., the popular social networking website, announced that on Saturday, June 13 at 12:01 a.m. U.S. EDT, it will allow Facebook users, subject to certain criteria and qualifications, to create personalized URLs for their pages on Facebook. By way of example, John Smith will be able to register "Facebook.com/johnsmith." Currently, a user's Facebook URL consists of the Facebook.com URL followed by a random series of numbers, e.g., facebook.com/profiles.Php?349485).

Whenever users can register any name on the Internet, however, it raises infringement issues under federal and state trademark and related intellectual property laws, particularly for owners of well-known brands. Any registration process creates fears of cybersquatting or other attempts to hijack trademarks and brand names. Sometimes these fears are real; other times they are not.

What Trademark Owners Need to Know

Facebook has responded to concerns of trademark owners in several ways. Here's what you need to know:

• Facebook has created an online form for use by registered trademark owners (whether Facebook users or not) to record their trademarks and thereby notify Facebook of their IP rights, at least in the first instance, to prevent others from using their trademarks in their personalized URL. For example, if a company had a registered trademark for, e.g., Robert Hall for shoes—by registering the mark with Facebook, it could prevent someone else from registering Facebook.com/roberthall. It is unclear, though, whether a registration protects only the exact trademark as opposed to variations. While the FAQs indicate user names are not case sensitive, that does not necessarily mean every variation of a trademark is protected by recording a claim.
• Regrettably, Facebook has given trademark owners only a couple of days to notify Facebook of their IP rights. If a trademark owner has not done so by the end of day, Friday, June 12, anyone else can potentially register a personalized Facebook URL using the brand owner's trademark.
• The new form can be found at: www.facebook.com/help/contact.php?show_form=username_rights
• Facebook has also provided FAQs at www.facebook.com/help.php?page=896
• The notification process applies only to registered trademarks. Currently, it appears that a trademark owner can only submit a registration based on a United States registration, as that number is used for the account number. While state and foreign registrations and pending applications have not been specifically addressed, presumably any registration number in the field of the form will suffice. But there must be an official registration number. Common law claims are not covered. A trademark owner must also complete a separate form for each trademark, which could prove to be a significant undertaking for a company that has a sizeable portfolio of trademarks. And what if other social networking sites adopt similar provisions?
• Facebook is limiting the June 13 URL registration to individual users who already had a user profile page prior to the June 9 announcement, and to Facebook Pages (these are the Facebook pages owned by businesses, public figures, brands and artists) that were live prior to May 31, 2009 that had at least 1,000 fans at that time. If your Facebook account does not meet these requirements, you have to wait until June 28 to register a personalized URL using a trademark or brand name.
• Facebook also has a procedure and a form for notifying Facebook of alleged infringements of a non-copyright nature, such as trademark infringement or rights of publicity. Presumably, this form can be used in lieu of the new form but will apply only after an infringement has occurred. This form is available at: www.facebook.com/copyright.php?noncopyright_notice=1.
  
  Note that copyright infringement allegations are directed to a separate Digital Millennium Copyright Act form for users to complete.
• Facebook users can sign up for only one username for their Facebook page and profile. Once selected, the username cannot be changed or transferred to third parties. If a user cancels an account, the associated URL will not be available as a new Facebook URL. Users will also not be permitted to register generic terms as usernames. Facebook reserves the right to remove or reclaim a username at any time and for any reason. Facebook hopes these restrictions will help to prevent the trafficking in usernames, and leaves a remedy open even where a trademark owner has failed to record its claim with the new form.

The $64,000 Question

If you are a trademark owner, should you record your trademark claim through use of the new form, or wait to assert claims as alleged infringements occur? This is not an easy question to answer.

By failing to record its claim, a trademark owner does not waive any rights to its intellectual property otherwise provided by law. Failing to record a claim simply means that a trademark owner may have to enforce its intellectual property rights after an infringement has occurred, as opposed to preventing it prior to use.

However, it is unclear whether using the new form to notify Facebook of IP rights subjects the trademark owner to the Facebook general terms of use (referred to by Facebook as the "Statement of Rights and Responsibilities") should the trademark owner have any issues with Facebook regarding to the processing and enforcement of its claim to a trademark.

For example, the Facebook terms of use provide that venue for any claims or disputes against Facebook are vested exclusively in the courts in Santa Clara County, California. Absent consent to such venue, a trademark owner could proceed against Facebook in virtually any jurisdiction in the United States, including in the trademark owner's home state. Whether that is an advantage or not is debatable, but it is an unresolved issue. Other provisions in Facebook's terms of use may also be problematic for some trademark owners.

Before deciding to undertake notifying Facebook of IP rights, however, a trademark owner should also consider the likelihood of someone hijacking its marks. Moreover, while the initial notification (and even later registration of a personalized URL) is free, it remains unclear whether Facebook will seek to monetize the offering in the future.

On the other hand, if a brand already has a Facebook Page (or knows that it will soon create one), then it is already (or will be) subject to the Facebook terms of use. Under such circumstances, notifying Facebook of IP rights through the new form may be the easiest means of avoiding a needless intellectual property battle that will most certainly cost more than the time spent completing a form.

The Evolution of Social Media

Facebook is adding another dimension to social networking—allowing personalization of pages while seeking to develop mechanisms to deal with brands and brand owners. But Facebook users interact with brands as well as people. The personalized URL launch is another example of the collision of social media interaction and intellectual property protection. While Facebook's latest offering may be the next evolutionary step forward, it may also be a passing fad. Time will tell. But one thing is certain:

If you are a brand owner with trademark registrations, you need to consider all of the issues before blindly jumping on anything that appears simple and easy, but that may be more costly than first meets the eye.

Should you have any questions, please feel free to contact any of the attorneys listed on this Alert.