THE internet ENCYCLOPEDIA 1 volume 3 phần 5 doc

DDL that are stored in different tables—such as salaried employee wages and hourly employee wages It makes no sense to have number of tickets and ticket price joined via a union, but SQL will probably allow it because they are both numeric columns The syntax is: select statement 1 UNION select statement 2 Minus The minus operation, also directly ported from set theory, removes matching rows from multiple result sets This is useful in determine what is different between these results—or “what didn’t sell while it was under a promotion.” The syntax is: select statement 1 MINUS select statement 2 mapping to data in a table based upon the values stored in one or more columns Indexes are used by the database engine to improve a query’s performance by evaluating the where clause components and determining if an index is available for use If an index is not available for use during query processing, each and every row of the table will have to be evaluated against the query’s criteria for a match The syntax is not part of the SQL language specification (Groff & Weinberg, 1999, p 387) though most DBMSs have a version of the create index statement For example, to create an index on the MOVIE TITLE of the movie table located in the Appendix, the following syntax was used: create index MOVIE_NAME_IDX on MOVIE (MOVIE_TITLE); Create View DDL Create Table The create table statement allocates storage for data to be stored This storage has a structure (columns with datatypes) and optional constraints defined Once the table is created, the table is ready to receive data via the INSERT statement (see below) The syntax is straightforward: create table ( | ) For example, to create the movie table located in Appendix A, the following syntax was used: CREATE TABLE MOVIE ( MOVIE_ID MOVIE_TITLE INVENTORY_ID MOVIE_RATING PASS_ALLOWED 359 NUMBER VARCHAR2(50) NUMBER CHAR(5) CHAR(1) NOT NOT NOT NOT NOT NULL, NULL, NULL, NULL, NULL); Keys When a database is modeled using entity–relationship techniques, identifying attribute(s) are identified for all fundamental entities (tables), along with those attributes that relate two or more tables The identifying attribute(s) uniquely distinguish one row of data from all others in the table In SQL these identifying attribute(s) are identified to the database engine as a primary key Many database engines use this information to enforce the uniqueness property that is inherent in the definition Attributes that tie relations together are known as foreign keys Keys can be identified either when a table is created (with the create table command) or after (via the alter table command) Create Index The create index statement allows the database engine to create an index structure An index structure provides a “According to the SQL-92 standard, views are virtual tables that act as if they are materialized when their name appears” (Celko, 1999, p.55) The term virtual is used because the only permanent storage that a view uses is the data dictionary (DD) entries that the RDBMS defines When the view is accessed (by name) in a SQL from clause, the view is materialized This materialization is simply the naming, and the storing in the RDBMS’s temporary space, of the result set of the view’s select statement When the RDBMS evaluates the statement that used the view’s name in its from clause, the named result set is then referenced in the same fashion as a table object Once the statement is complete the view is released from the temporary space This guarantees read consistency of the view A more permanent form of materialized views is now being offered by RDBMS vendors as a form of replication, but is not germane to this discussion The syntax for creating a database view is below: create view [] as The power of a view is that the select statement (in the view definition) can be almost any select statement, no matter how simple or complex—various vendors may disallow certain functions being used in the select statement portion of a view’s definition Views have proven to be very useful in implementing security (restricting what rows and/or columns may be seen by a user); storing queries (especially queries that are complex or have specialized formatting, such as a report); and reducing overall query complexity (Slazinski, 2001) Constraints Constraints are simple validation fragments of code They are (from our perspective) either the first or last line of defense against bad data For example, we could validate that a gender code of “M” or “F” was entered into an employee record If any other value is entered, the data will not be allowed into the database 360 STRUCTURED QUERY LANGUAGE (SQL) Domains A domain is a user-created data type that has a constrained value set For our movie example we could create a movie rating domain that was a 5-character data type that only allowed the following ratings: {G, PG, PG-13, R, NC-17, X, NR} Once the domain was created, it could be used in any location where a predefined data type could be used, such as table definitions Not all database vendors support the creation and use of domains; check the user guide for information and syntax specifications DCL SQL’s DCL is used to control authorization for data access and auditing database use As with any application with Internet access, security is a prime concern Today’s RDBMSs provide a host of security mechanisms that the database administrators can use to prevent unauthorized access to the data stored within Granting Access to Data By default, in an enterprise-edition RDBMS, the only user who has access to an object (table, index, etc.) is the user who created that object This can be problematic when we have to generate a report based on information that is stored in tables that are owned by other users Fortunately, the solution is the grant statement The syntax is in another table that we wish to place in our table (perhaps copying data from a production database into a developer’s personal database), we can use an expression For instance, if we had ticket price information in a table named master ticket price, and we wanted to copy the data into our local ticket price table, we could issue the following command: insert into TICKET_PRICE select * from MASTER_TICKET_PRICE; Now this is assuming that the structure of THE MASTER TICKET PRICE table and the TICKET PRICE table are the same (i.e., the same columns) If we only want a partial set of values from the MASTER TICKET PRICE table, we can add a where clause to our select statement Likewise, we can reduce the number of columns by selecting only those columns from the MASTER TICKET PRICE table that match our TICKET PRICE table Modifying Data Syntax: update set = | {where_clause}; grant on to ; For a Single Row One drawback to the grant statement is that it requires a grant statement for every user–object–access level combination—which can be a challenging task in a large enterprise where data security is critical Accounting departments usually want a high degree of accountability from those individuals who have access to their data Depending on a database’s implementation, there may be mechanisms in place to help ease the burden of security management DML Inserting Data Syntax: insert into (column {[, column]})) values ( | ) For A Single Row For example, inserting a new row of data into the ticket price table would look like this: insert into TICKET_PRICE values ( 'MIDNIGHT SHOW', 5.50); For Multiple Rows If we want to insert multiple rows of data we simply have multiple insert statements; however, if we have data stored To update only one row in a table, we must specify the where clause that would return only that row For example, if we wanted to raise the price of a KIDS movie ticket to $5.00, we would issue the following: update TICKET_PRICE set PRICE = 5.00 where TICKET_TYPE = 'KIDS'; We could perform a calculation or retrieve a value from another database table instead of setting the price equal to a constant (5.00) For Multiple Rows For modifying multiple rows there are two options—if we want to modify all of the rows in a given table (say to increase the price of movie tickets by 10% or to change the case of a column), we just leave off the where clause as such: update TICKET_PRICE set PRICE = PRICE * 1.10; If we want to modify selected rows, then we must specify a where clause that will return only the desired rows For example, if we want to raise just the adult prices by 10%, we issue the following: update TICKET_PRICE set PRICE = PRICE * 1.10 where TICKET_TYPE like 'ADULT%'; MULTIUSER ENVIRONMENTS Removing Data Syntax: delete {where_clause}; For a Single Row To delete only one row in a table we must construct a where clause that returns only that row For example, if we wanted to remove the SENIORS movie ticket type, we would issue the following: delete TICKET_PRICE where TICKET_TYPE = 'SENIORS'; For Multiple Rows For deleting multiple rows there are two options—if we want to delete all of the rows in a given table, we just leave off the where clause as such: delete TICKET_PRICE; If we want to delete a set of specific rows from a table, then we must specify a where clause that returns only those rows For example, if we want to delete only the movies that allow passes, we issue the following: delete MOVIE where PASS_ALLOWED = 'Y'; TRANSACTION CONTROL A database transaction is a unit of work performed This could be the checkout portion of a shopping cart application—when the user finally hits the purchase button It could be a data entry person entering time card data or performing an inventory to verify that stock levels match what is on the shelves In database terms a transaction is a series of DML statements that are logically grouped together Because there are humans involved, SQL provides us with the ability to recover from mistakes (to a certain degree) We can start a transaction by issuing a “begin transaction” statement This marks the beginning of our work session We can then proceed with modifying the data in any way that is required Once we are sure of our changes—verified via SQL queries, no doubt—we can issue a “commit.” The commit statement tells the database engine that we are done with this unit of work and the changes should be made a permanent part of the database If we are not satisfied with out changes or we made a mistake we can issue a “rollback” statement, which undoes all of the work performed since the “begin transaction” was issued Note that SQL does not support multiple levels of undo, like many computer applications Once a commit is issued, we must manually undo any portion of our transaction that we are not satisfied with The classis example that is often used to illustrate mutual, dependent, or two-phase commits is the use of an ATM machine When someone uses the ATM machine he or she expects to receive the money requested, and the account will be altered to reflect this withdrawal Likewise, the 361 bank is willing to give the requesting person his or her money (if sufficient funds are available) and the account is properly adjusted If both of these actions (dispensing funds and altering account) are successful, then all is well If either action fails, then all transactions must be rolled back MULTIUSER ENVIRONMENTS One of the reasons for the success of the RDBMS is its ability to handle multiple, simultaneous users This is a critical feature for many Web sites Amazon.com would not be around too long if only one person at a time could look up a book’s information or check out However, in order to handle multiple, simultaneous users we must have some locking mechanism in place in order for users not to overwrite each other’s information Likewise, we do not want to delay a user’s ability to browse through our dataset while it is being worked on—a common problem for any system (Web site or otherwise) that is in a 24 × 7 support mode Various operations cause various types or levels of locks to be placed on the data For example, in modifying the data, an exclusive lock is entered This forbids any other user to modify the same data until the first user has completed his or her transaction A commit or rollback statement will either permanently record or undo the change This is the why developers should commit often and as early as possible Too many locks without committing or rolling back the data have profound performance implications Different RDBMSs lock at different levels—some lock only the data that are modified, others lock certain chunks of data (the affected rows and other rows that are contiguously stored with them) Techniques for dealing with various locks are beyond this chapter Concurrency Issues Concurrency is a big issue in multiuser systems Every user wants the most current data, yet just because we are entering data into a system does not mean that we entered them correctly—this is why transaction control was invented All enterprise RDBMSs have a form of locking that permits the querying of data that are in the process of being modified However, because the data being modified are not yet committed to the database, the query will only be allowed to see the committed data The impact is this—we can run a query, study the result, and 5 min later, rerun the query and get different results The only alternative would be to have all queries wait until all of the pieces of information that they are requesting were not being modified by any other users Another impact, where a user may have to wait until another user has completed a transaction, is when a user wants to modify a piece of information that is in the process of being modified by another user In this case only one user can modify a piece of information (set of rows in a table) at a time Deadlock Deadlock is a condition where two users are waiting for each other to finish Because they are waiting on each 362 STRUCTURED QUERY LANGUAGE (SQL) other, they can never finish their processing An example of deadlock would be as follows: User 1 is updating all of the rows in the MOVIE table and at the same time User 2 is updating all of the rows in the TICKET TYPE table Now, User 1 decides to update all of the rows in the TICKET TYPE table The database will make the user wait (because User 2 currently has the TICKET TYPE data locked—the transaction has not been committed) Meanwhile, User 2 decides to modify all of the rows in the MOVIE table Again the database will make User 2 wait (because User 1 has not committed his or her data) At this point deadlock has occurred—both users are in a wait state, which can never be resolved Many commercial RDBMSs test for deadlock and can perform some corrective measures once it is detected Corrective measures can range from aborting the SQL statement that caused the deadlock to terminating the session with the least amount of process time that was involved with the deadlock—refer to the RDBMS’s user guide for details on a system ENHANCED VERSIONS OF SQL Even though there have been three versions of the SQL language published, there is no vendor that adheres 100% to the standard All vendors add features to their database engines in an attempt to entice consumers This is not always a bad feature This is part of the reason that there have been three standards to date: the database vendors are continuously improving their products and exploring new areas that can be supported by database technologies Two of the most popular extensions are procedural extensions and specialized derivatives of SQL an end user does not have to type the code in each and every time that it needs to be called upon This supports the concepts of code reuse and modularity Performance is increased, because the code has been verified to be correct and security policies can be enforced For example, if we want to limit access to a given table, we can create an insert stored procedure and grant end users rights to execute the procedure We can then remove all rights to the table from all users (except the table’s owner) and now, if our database is broken into by any username other than the table’s owner, the only operation that can be performed is the insert stored procedure Triggers A trigger is a piece of procedurally enhanced SQL code that has been stored in a database, which is automatically called in response to an event that occurs in the database Triggers are typically considered unavoidable—i.e., if the event for which a trigger has been defined occurs, the trigger fires (is executed) Some RDBMSs do allow bulk load programs to disable the triggering mechanism—refer to the RDBMS’s user guide for details For example, for security reasons it has been determined that the finance manager will log all modifications to the EMPLOYEE SALARY table for review Granted, we could make use of a stored module (refer to the example above) and add the logging code into the stored module However, we still have the loophole that the database could be broken into using the EMPLOYEE SALARY table’s login ID (or worse yet the database administrator’s login!) If this were the case, the stored module would not be the only access point to the EMPLOYEE SALARY table CONCLUSION Procedural Extensions to SQL Although SQL is great at manipulating sets of data, it does have some shortcomings A few immediately come to mind It is usually very difficult with standard SQL to produce a top n listing, e.g., the top 10 songs on the Billboard charts It is impossible to process a result set, one row at a time Complex business rules governing data validation cannot be handled by normal constraint processing Last, performance of SQL queries (from the entire parse, execute, send results perspective) can be very poor when the number of clients is large, such as in a Web environment Note that a performance gain can be had if every query was stored as a View (see above) The first three of these items are typically handled in stored modules and triggers The last item can be handled either by using database views or by making use of the database engine’s query caching scheme (if it exists)—this is beyond the scope of this chapter Stored Modules A stored module (typically a procedure or function) is a piece of procedurally enhanced SQL code that has been stored in the database for quick retrieval The benefits of having the code stored are numerous By storing the code, This chapter has given a brief introduction to the SQL language, including its historical and mathematical foundations There are many good resources available online and in books, periodicals, and journals Even though there is a standard for the SQL language, many vendors have added extensions and alterations that are often used to gain performance enhancements, which are very critical in Web apps Complications in multiuser environments require that a locking analysis be conducted to detect and correct bottlenecks APPENDIX: SAMPLE SCHEMA AND DATA Figure 1 depicts the tables that are used in this chapter and their relationships The database supports the operation of a set of movie theaters (named SITES) Each site can run a MOVIE for a given number of weeks (this is stored in MOVIE RUN) Because a movie can have different showtimes each week that it is being shown, this information is stored in the MOVIE RUN TIMES table Of course, a movie cannot be shown without selling some tickets (TICKETS SOLD) Because there are various charges for movies, this information is stored in the TICKET PRICE table CROSS REFERENCES 363 TICKET PRICE TICKET TYPE KIDS SENIORS ADULT MAT ADULTS PRICE 4.50 5.00 5.00 7.00 MOVIE MOVIE ID 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 10001 10002 10003 10004 10005 10006 10007 10008 10009 10010 10011 10012 10013 10014 10015 10016 10017 10018 10019 10020 MOVIE TITLE MOVIE RATING PASS ALLOWED THE BEST MAN IN GRASS CREEK A KNIGHT’S TALE BRIDGET JONES”S DIARY ALONG CAME A SPIDER CROCODILE DUNDEE IN L.A BLOW DRIVEN EXIT WOUNDS FREDDY GOT FINGERED HEARTBREAKERS JOE DIRT FORSAKEN MEMENTO TOWN AND COUNTRY THE MUMMY RETURNS ONE NIGHT AT MCCOOL”S SPY KIDS THE TAILOR OF PANAMA ’CHOCOLAT’ ’AMORES PERROS’ PG PG-13 R R PG R PG-13 R R PG-13 PG-13 R R R PG-13 R PG R PG-13 R Y N Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y Figure 1: Relationship of tables used in this chapter GLOSSARY Database Collection of relevant data organized using a specific scheme Relational database Collection of data that conforms to properties of the relational database model first defined by E F Codd Relational database management system (RDBMS) Software that manages a relational database SQL An industry-standard language for creating, updating, and querying a relational database Tuple Data object containing two or more components; usually refers to a record in a relational database CROSS REFERENCES See Data Mining in E-Commerce; Data Warehousing and Data Marts; Databases on the Web 364 STRUCTURED QUERY LANGUAGE (SQL) REFERENCES Celko, J (1999) Joe Celko’s data & databases: Concepts in practice San Francisco: Morgan Kaufmann Chan, H C., Tan, C Y., & Wei, K K (1999, November 1) Three important determinants of user performance for database retrieval International Journal of Human– Computer Studies, 51, 895–918 Connolly, T., & Begg, C (2002) Database systems Reading, MA: AddisonWesley Date, C J (1994, October) Moving forward with relational [interview by David Kalman] DBMS, 62–75 Eisenberg, A., & Melton, J (2002) SQL:1999 [formerly known as SQL3] Retrieved April 24, 2002, from http://geochem.gsc.nrcan.gc.ca/miscellaneous resources/sql1999.pdf Elmasri, R., & Navathe, S B (1989) Fundamentals of database systems New York: Benjamin/Cummings Freeon-line dictionary of computing (FOLDOC) (2002) Retrieved August 14, 2002, from http://wombat.doc ic.ac.uk/foldoc/foldoc.cgi Groff, J R., & Weinberg, P N (1999) SQL: The complete reference Berkeley, CA: Osborne McGraw– Hill Hursch, C J., & Hursch, J L (1988) SQL The structured query language Blue Ridge Summit, PA: Tab Professional and Reference Books Slazinski, E D (2001) Views—The ‘other’ database object In D Colton, S Feather, M Payne, & W Tastle (Eds.) Proceedings of the ISECON 2001 18th Annual Information Systems Education Conference (p 33) Foundation for Information Technology Education Chicago: AITP SQL syntax diagrams (2002) Retrieved April 24, 2002 from http://www-dbs.inf.ethz.ch/∼isk98/Syntax Diagramme/ SQL/ Supply Chain Management Gerard J Burke, University of Florida Asoo J Vakharia, University of Florida Introduction Strategic and Tactical Issues in SCM Product Strategies Network Design Sourcing Strategies Transportation and Logistics Operations and Manufacturing Distribution Channels Supply Chain Coordination Incentive Impediments Fostering Trust between Partners 365 366 366 366 367 368 368 369 369 370 370 INTRODUCTION Supply chain management (SCM) is the art and science of creating and accentuating synergistic relationships among the trading members that constitute supply and distribution channels Supply chain managers strive to deliver desired goods or services to the “right person,” in the “right quantity,” at the “right time,” in the most effective and efficient manner Usually this is achieved by negotiating or achieving a balance between conflicting objectives of customer satisfaction and cost-efficiencies Each link in each supply chain represents an intersection where supply meets demand, and directing the product and information flows at these crossroads is at the core of SCM The integral value proposition of SCM is as follows: Total performance of the entire chain is enhanced when all links in the chain are simultaneously optimized compared with the resulting total performance when each individual link is optimized separately Obviously, coordination of the individual links in the chain is essential to achieve this objective The Internet, and information technology in general, facilitate the integration of multitudes of channel enterprises into a seamless “inter”prise, leading to substitution of vertical integration with “virtual integration.” Overcoming coordination roadblocks and creating incentives for collaboration among disparate channel members are some of the major current challenges in SCM How well the supply chain performs as a whole hinges on achieving fit between the nature of the products it supplies, the competitive strategies of the interacting firms, and the overall supply chain strategy Planning also plays a key role in the success of supply chains Decisions regarding facility location, manufacturing schedules, transportation routes and modes, and inventory levels and location are the basics that drive supply chains These dimensions of tactical effectiveness are the sprockets that guide the chain downstream through its channel to end demand Accurate and timely integrated information lubricate the chain for smooth operation Information Incentives from Terms of Sale Information Technology and SCM Enabling Collaboration Auctions and Exchanges Electronic End Demand Fulfillment Disintermediation Summary Glossary Cross References References 370 371 371 371 371 372 372 372 372 372 technologies allow supply chains to achieve better performance by providing visibility of the entire supply chain’s status to its members, regardless of their position in the chain The success of the collaborative forecasting, planning, and replenishment (CPFR) initiative illustrate the value of the internet to SCM (CPFR Committee, n.d.) A few of the most popular information tools or vehicles available to supply chains are enterprise resource planning (ERP) software and related planning applications, application service providers (ASP), online markets and auction mechanisms (business-to-business [B2B] commerce), and electronic customer relationship management (eCRM and business to consumer [B2C]) A supply chain can be visualized as a network of firms servicing and being serviced by several other businesses, although it is conceptually easier to imagine a chain as a river, originating from a source, moving downstream, and terminating at a sink The supply chain extends upstream to the sourcing of raw materials (backward integration) and downstream to the afterlife activities of the product, such as disposal, recycling, and remanufacturing (forward integration) Regardless of magnitude, all supply chains can be visualized as consisting of a sourcing stage, a manufacturing stage, and a distribution stage The supply chain operations reference model developed by the Supply Chain Council (n.d.) assumes that all processes at each of these stages are integral in all businesses Each stage plays both a primary (usually physical transformation or service creation) and a dual (market mediator) role This primary role depends on the strategy of the supply chain, which in turn, is a function of the serviced products’ demand pattern (Fisher, 1997) The most strategic link is typically in the manufacturing or service creation stage, because it is positioned between suppliers and consumers Depending on the structure of the chain (in terms of products and processes employed), power can shift from the supplier (e.g., monopolist supplier of key commodities such as oil), to the manufacturing (e.g., dominant producer of a unique product such as semiconductors), to the distribution (e.g., key distributor 365 366 SUPPLY CHAIN MANAGEMENT Enterprise Resource Planning Integration B2B Link Manufacturers Product Flow Wholesalers/ Distributors Customers Suppliers Information Sharing through EDI Retailers POS Data Link B2C Link Figure 1: Example of an information-enabled supply chain of consumer items) stage in the supply chain Obviously, power in the supply chain has a key bearing on the strategic positioning of each link in the chain The remainder of this chapter is organized as follows In the next section, we describe the key strategic and tactical issues in SCM This is followed by a discussion of mechanisms for coordinating stages in the supply chain The third and final section focuses on describing the significant impact of information technology on SCM practices STRATEGIC AND TACTICAL ISSUES IN SCM A holistic supply chain comprises multiple processes for suppliers, manufacturers, and distributors Each process employs a distinct focus and a related dimension of excellence Key issues in managing an entire supply chain relate to (a) analyzing product strategies, (b) network design and the related sourcing strategy employed, and (c) a strategic and tactical analysis of decisions in logistics, manufacturing, distribution, and after-sale service It is our view that by analyzing product demand characteristics and the supply chain’s capabilities, and crafting a fit between them, an individual manager can ensure that the specific process strategy employed does not create dissonance in the entire supply chain Product Strategies SCM has evolved from process reengineering efforts to coordinate and integrate production planning at the factory level to initiatives that expand the scope of strategic fit beyond a single enterprise (Chopra & Meindl, 2001) Positive results from intra-functional efforts extended the SCM philosophy throughout the enterprise Process improvements at the firm level highlighted the need for suppliers and customers of supply chain managed firms to adopt the SCM philosophy A supply chain is only as strong as its weakest link How the chain defines strength is at the core of a supply chain’s strategy and, therefore, its design Is strength anchored in efficiency, responsiveness, or both? Achieving a tight fit between the competitive strategies of supply chain members and the supply chain itself is gained by evaluating the characteristics of the products serviced by the chain “The root cause of the problems plaguing many supply chains is a mismatch between the type of product and the type of supply chain” (Fisher, 1997, p.105) Critical product attributes are (a) the demand pattern, (b) the life cycle, (c) the variety of offerings, and (d) the product delivery strategy Fisher (1997) categorized a product as being either functional (basic, predictable, long-lived, low profit margin) or innovative (differentiated, volatile, short-lived, high profit margin) Furthermore, using the product life-cycle argument, innovative products (if successful) will eventually evolve to become functional products The types of supply chain needed to service these two categories of products effectively are distinct An efficient or low-cost supply chain is more appropriate for a functional product, whereas a responsive or customer attuned supply chain fits an innovative product better Obviously, a spectrum of chain varieties exists between the end points of responsiveness and efficiency, hence most tailored supply chains are hybrids that target responsiveness requirements for each product serviced while exploiting commonalities in servicing all products to gain economies of scope Thus, the strategic position of a supply chain balances customer satisfaction demands and the firm’s need for cost minimization Information technologies enable both efficient and responsive supply chains because they have the potential to provide immediate and accurate demand and order status information Efficiency gains via information technologies are gleaned from decreased transactional costs resulting from order automation and easier access to information needed by chain members Likewise, responsiveness gains can be obtained by a quicker response to customer orders Hence, in practice, it seems to have become standard for all supply chains to use some form of information technology to enable not only a more efficient physical flow of their products but also to simultaneously improve their market mediation capability Network Design Network decisions in a supply chain focus on facility function, facility location, capacity, and sourcing and distribution (Chopra & Meindl, 2001) In general, network design STRATEGIC AND TACTICAL ISSUES IN SCM determines the supply chain’s tactical structure The significant capital investments required in building such a structure indicate the relative long run or strategic importance of network decisions Facility Function How will each network investment facilitate the supply chain strategy? Consider a manufacturing plant If the plant is set up to produce only a specific product type, the chain will be more efficient, but less flexible than it would be if the plant produced multiple product types A supply chain providing innovative products will likely perform better with flexible manufacturing facilities Facility Location What locations should be chosen for facilities? A good decision in this dimension is essential because the cost ramifications of a suboptimal location could be substantial Shutting down or moving a facility is significant not only in terms of financial resources but also in terms of the impact on employees and communities Other factors that should be considered are the available infrastructure for physical and information transportation, flexibility of production technologies employed, external or macroeconomic influences, political stability, location of competitors, availability of required labor and materials, and the logistics costs contingent on site selection Capacity Depending on the expected level of output for a facility, capacity allocations should be made so that idle time is minimal Underutilization results in lower return on investment and is sure to get the attention of company executives On the other hand, underallocating capacity (or large utilizations) will create a bottleneck or constricted link in the supply chain This will result in unsatisfied demand and lost sales or increased costs as a result of satisfying demand from a nonoptimal location The capacity allocation decision is a relatively long-term commitment, which becomes more significant as sophistication and price of the production technology increases Supply and Distribution Who will serve our needs, and whose needs will we serve? This is a recurring question Decisions regarding the suppliers to a facility and the demand to be satisfied by a facility determine the costs of material inputs, inventory, and delivery Therefore, as forces driving supply or demand (or both) change, this decision must be reconsidered The objective here is typically to match suppliers and markets to facilities to minimize not only the systemwide costs but also the customer responsiveness of the supply chain In general, these criteria are often orthogonal, implying that the sourcing and distribution decisions require a multiobjective focus with some prioritization of the cost and responsiveness aspects Each of these network design decisions are not made in isolation since there is a need to prioritize and coordinate their combined impact on the tactical operations of the supply chain They jointly determine the structure of the supply chain, and it is within this structure that tactical strategies are implemented to reinforce the overall 367 strategy of the entire chain Once network design has been finalized, the next key decision within the supply chain focuses on sourcing strategies Sourcing Strategies A primary driver of a firm’s SCM success is an effective sourcing strategy The firm’s ability to deliver its goods and services to customers in a timely manner hinges on obtaining the appropriate resources from the firm’s suppliers Because manufacturing firms typically spend more than 50% of earned revenue on purchased materials, the costs of disruptions to production due to supply inadequacies are especially significant Furthermore, a firm’s financial and strategic success is fused to its supply base The nature of a firm’s connection to its suppliers is evident in its sourcing strategy and is characterized by three key interrelated decisions: (a) how many suppliers to order from, (b) what criteria to use for choosing an appropriate set of suppliers, and (c) the quantity of goods to order from each supplier Single sourcing strategies seek to build partnerships between buyers and suppliers to foster cooperation and achieve benefits for both players With the adoption of just-in-time inventory policies, supplier alliances with varying degrees of coordination have shifted supply relations toward single sourcing to streamline the supply network At the strategic level, single sourcing contradicts portfolio theory By not diversifying, a firm is assuming greater risk Therefore, tactical single sourcing benefits need to justify the riskiness inherent in this relationship One method of alleviating the risks of single sourcing is to ensure that suppliers develop contingency plans for materials in case of unforeseen circumstances In fact, suppliers dealing with IBM are required to provide details of such contingency plans before the company will enter into purchasing contracts with them The obvious benefits of single sourcing for the firm are quantity discounts from order consolidation, reduced order lead times, and logistical cost reductions as a result of a scaled down supplier base The ordering costs advantage of single sourcing is diminishing, however, because of the proliferation of Internet procurement tools, which tend to reduce ordering costs and streamline purchasing processes In contrast, a larger supply base possesses greater upside volume flexibility through the summation of supplier capacities Strategically, a manufacturer’s leverage is kept intact when the firm diversifies its total requirements among multiple sources Additionally, alternative sources hedge the risk of creating a monopolistic (sole source) supplier, and the risk of a supplier integrating forward to compete with the buying firm directly Online exchanges and marketplaces also provide multiple sourcing benefits by automating the cumbersome tasks associated with multiple supplier dealings In concert with decisions regarding the number of suppliers for a product, a firm must develop an appropriate set of criteria to determine a given supplier’s abilities to satisfy the firm’s requirements In practice, this is evaluated using scoring models which incorporate quantifiable TELECOMMUTING PRODUCTIVITY 441 Table 2 Basis for a 20 Percent per Week Productivity Gain from One Day per Week Telecommuting IN OFFICE TOTAL FOR WEEK 8 32 40 16 32 48 100 0 20 TELECOMMUTING Actual hours Productivity equivalent (hours) Productivity gain/period (%) home A survey of pilot programs (Mokhtarian, 1996) indicated an average telecommuting rate of 1.2 days per week in 1991, which is comparable to the rates in the Nilles study Another survey of more than 80 published studies (Bailey & Kurland, 2002) found similarly low rates Deconstructing Telecommuting Productivity One way to evaluate the likelihood of potential productivity gains of large magnitude is to apply logic and common sense Figure 1 shows a model of productivity based on four major factors: 1 Amount of work—actual hours of work, per day, week, month or year 2 Intensity of work—how hard the person is working 3 Efficiency of work—ratio of outputs to labor inputs (affected by amount of supporting technology, experience and training, organization of work, concentration, etc.) 4 Adjustments—telecommuters generally require additional inputs from the organization compared with other employees, and any such costs need to be netted out of productivity calculations Based on this model a 10% increase in any factor, while the others remain constant or balance out, results in a productivity gain of a bit less than 10% (depending on the magnitude of the adjustments) A simultaneous 10% increase in two factors could produce a gain approaching 21%, and so on The question then becomes this: What types of changes in these factors are likely to occur as a result of telecommuting? Hours or Amount of Work The average one-way commute in major urban areas is between 20 and 30 minutes per day Thus, for an employee who works an eight-hour day, commuting represents around 10% of the work time Assuming that the average telecommuter puts all the commuting time savings into extra work, that the level of intensity and efficiency do not decline, and that the adjustments are small, this would result in an increase in productivity of close to 10% There are no guarantees that employees will actually devote all Productivity = Hours x Intensity x Efficiency Figure 1: Productivity model - Adjustments the extra time to more work than they would do in the office From an employee relations point of view, telecommuting consultants warn that it would be bad policy to suggest or even imply that telecommuters should work extra hours Another frequently mentioned source of extra work hours is recapturing time that would otherwise be lost because of medical appointments or problems in the home For example, instead of losing a whole day because of a medical appointment near home, the employee could put in couple of hours at home rather than wasting the rest of the workday (This argument assumes that all appointments are around the middle of the day, rather than in the early morning or late afternoon.) However simple calculations indicate a productivity gain of only 2.5% for a person who has a relatively high average of one such situation per month (12 situations × 4 hours/1900 work hours per year) Intensity of Work The telecommuting literature consistently emphasizes this aspect Authors claim that, away from the distractions of the office, people will be able concentrate much better and get much more work done There is anecdotal evidence for this in certain situations For example Kidder’s (1981) book, The Soul of a New Machine, mentioned a software engineer who ducked out to the Boston Public Library and developed the microcode for 195 minicomputer machine instructions in a very short time It is certainly true that people can work very intensely for short periods when highly motivated The issue here, however, is the impact of telecommuting Will this change in working circumstances motivate or energize people to work more intensely, on a sustained basis over months and years? Telecommuting advocates suggest several possible mechanisms for increases in intensity Not having to commute, telecommuters may have more energy to put into their tasks If this extra energy is used to work longer hours, as discussed earlier, it may not be available to also increase the intensity of work Another argument is that some employees work better at certain times of the day, and these times may not coincide with traditional office hours But even if there is a substantial proportion of the population that works significantly better at times that are largely outside traditional working hours, potential gains may be limited by the need for some to interact with other employees by telephone during the 8-to-5 time frame 442 TELECOMMUTING AND TELEWORK Efficiency of Work People who make more use of information technology in their work are more productive, and by its very nature telecommuting requires more use of IT Telecommuters in formalized programs usually receive extra training in using technologies and managing their work In many formal programs, managers of telecommuters also receive additional training Employees that are selected or allowed to telecommute typically have more experience and a track record of performance Therefore, telecommuters should be more productive These gains are not necessarily a result of telecommuting, however, and might be obtainable by providing comparable technology and training for other workers who remain on-site Another efficiency issue relates to the telecommuter’s distance from the workplace The modern office is an institution that has been evolving for more than 100 years It provides efficient access to support personnel, high-speed office equipment, office supplies, and also to the paper files that are still present in many organizations Telecommuters need to put in more time in planning to make sure all the necessary resources are available when away from work They may need to devote extra time or money to obtaining some of these resources if they become necessary while telecommuting Therefore for some aspects of their work, telecommuters may be less efficient than their counterparts back in the office Adjustments Productivity gains need to be reduced by tangible expenses for equipment, technology support, training, telecommunications and other services, for example, that are greater than that received by nontelecommuters In addition, the productivity calculations need to include intangible costs such as the following: r Extra managerial supervision Extra support from other employees (e.g., faxing materials) r Work transferred to other employees when telecommuters are unavailable r Decreases in the effectiveness of meetings due to scheduling problems or less effective communication by remote participants “Hawthorne” effects and employees’ inability to objectively evaluate their own work In this context, it should be noted that questions about the adequacy of the supporting evidence for productivity gains are not a secret among telecommuting researchers Such concerns have been around for a number of years For example, Kraut (1989, p 20) stated that “It is not yet possible in most studies, however, to untangle the effects of novelty, self selection and longer work hours from the effects of work location.” A more current review (Bailey & Kurland, 2002) reviewed more than 80 published studies and found that “little clear evidence exists that telework increases job satisfaction and productivity, as it is often asserted to do.” To put the productivity issue in context, consider that the continuing emphasis on increasing productivity throughout the United States and world economies has been a major driving force for investments in information technology If telecommuting were able to generate noticeable productivity gains that flowed down to the bottom line, it would be reasonable to expect that companies with high proportions of knowledge workers would massively adopt telecommuting and continue to use it on a large scale The fact that this has not happened is a telling indicator that telecommuting does not deliver, at least at the level of the whole organization, the productivity gains touted by consultants As an example of the hype on this topic, also consider the following anecdote The author attended a seminar on telecommuting just after a major earthquake disrupted the freeway system in Southern California in 1994 One vendor mentioned that, in addition to providing relief from the horrendous traffic congestion at the time, telecommuting also offered “tremendous productivity gains.” When asked why the details of these gains were not being published so that these benefits could become more widely known, the vendor said that organizations were using it as a “secret weapon.” r Hourly rates can be applied to these items to generate cost estimates These intangibles may also create problems with morale and communications within an organization, however (Prusak & Cohen, 2001) The impacts of such adverse organizational impacts could exceed the actual labor costs to support telecommuters The business press abounds with anecdotal accounts of about increased productivity resulting from telecommuting Published research studies are relatively rare, and many of these have not been of high quality Like the study by Nilles (1994) these studies typically rely on subjective estimates of productivity Westfall (1997) identified 15 possible factors that have not been adequately taken into account in much of the research on telecommuting productivity, including the subjective factors of TELECOMMUTING USAGE TRENDS Toffler (1980) predicted that 10 to 20% of the population might be working in an “electronic cottage” mode by the year 2000 Although he did not define how much time people would have to work at home to fall into this category, his comparisons to the work environment before the industrial revolution suggests that more than half of the working hours for such workers would be at home It is obvious that, based on any reasonable interpretation of the term, this prophecy has not come to pass (incidentally Toffler included little or no material on this subject in subsequent books) Toffler was by no means the only person who offered optimistic predictions of growth in telecommuting A cursory search of literature published during the 1990s finds numerous citations of forecasts of high rates of growth in telecommuting, and subsequent surveys predicting continued growth from higher usage levels These forecasts were developed by commercial firms, however, not published in sources that were publicly available at reasonable costs and not subject to academic review of the data or methodologies Analyses of the limited data published THEORETICAL CONSIDERATIONS on methodologies shows that the high levels reported in later surveys are based on extremely broad definitions of telecommuting (e.g., as low as 1 day per month), and a failure to distinguish between people who actually substitute telecommunications for physical travel versus other teleworkers (e.g., mobile workers, home-based self-employed workers, etc.) (The author’s e-mailed requests for additional details on two such forecasts did not receive responses.) THE INTERNET AND OTHER TECHNOLOGICAL TRENDS FAVORING TELEWORK In 1969, Gordon Moore, one of the founders of Intel, noted that the number of transistors per chip required for the most efficient production of integrated circuits seemed to be doubling every year He later revised his estimate to 18 months, and this observation came to be known as “Moore’s Law.” The concept is popularly understood as meaning that the power of computers doubles every 18 months (or sometimes 2 years), whereas the cost remains constant The progress of the computer industry seems to be tracking Moore’s Law well, resulting in exponential increases in the power of information and communication technologies, and rapidly declining costs for measures of computing power In addition to widening the use of existing technologies through lowered costs, the increasing power enables new applications that were not technically feasible before Both the reduced costs and the increased capabilities have favorable implications for telework Recent progress in communications technologies has positive implications for telecommuting In the year 2003, digital subscriber line (DSL) or cable modem connections are available throughout most of the United States For approximately $50 per month, telecommuters can access organizational networks and resources over the Internet at transmission rates of several hundred kilobits per second, without interfering with incoming or outgoing voice communications This bandwidth is sufficient to enable real-time audio and video communications With more than 3 billion Web pages indexed through the Google search engine in 2003, the telecommuting knowledge worker also has access to a tremendous wealth of information resources from all over the world The current situation is in is in sharp contrast to what was available just 10 years before in the early 1990s At that time, telecommuters were limited to dial-up connections typically operating at 14.4 kilobits or less per second The telephone costs for dialing in to corporate networks were so high that continuous online communications were impractical Even with minimal dial-ins to remote computers, the potential interference with other calls often made it necessary to lease an additional phone for voice communications Few telecommuters had heard of the Internet, and the World Wide Web was in its earliest stages, primarily being used by academic researchers The technological future promises to be even more favorable for telecommuting Increasing Internet bandwidth will make it possible for off-site workers to reduce 443 the impact of two problems—limited participation in meetings and reduced access to documents—that have been a significant impediment to telecommuting in the past High-resolution audio and video teleconferencing will enable telecommuters to “attend” on-site meetings, at minimal cost, with a presence that is not markedly inferior to that of people who are physically in the conference rooms This higher bandwidth will provide inexpensive real-time access to organizational document management systems These increasingly popular systems store documents in a digital form that can be transmitted over internal networks and the Internet In addition to reducing costs, these systems greatly facilitate “bringing the work to the worker,” making it possible for employees to effectively handle a larger proportion of their tasks from remote locations Nonetheless, it remains to be seen whether these increased technological capabilities, by themselves, will cause telecommuting to become as widespread as Toffler predicted It may be that there are other factors at work that will have a major impact on telecommuting participation and rates THEORETICAL CONSIDERATIONS We are all aware of the tremendous advances in supporting technologies Most of us are also only too familiar with the traffic congestion in major urban centers, which could make classic telecommuting more attractive in most developed countries Many other considerations (e.g., high fuel taxes outside of the United States, environmental issues including global warming, and the political instability of many of the major oil producing nations) strongly favor increased usage of classic telecommuting Figure 2 graphically illustrates this perspective, in which explicit factors have the greatest impact on telecommuting usage When expressed as a percent of total working hours, however, the actual substitution of telecommunications for vehicle trips is still low, not more than 3% at the start of the 21st century This low usage represents a paradox, in view of the very favorable trends over the three decades in which the concept has been seriously discussed In this same period, there have also been numerous implementation projects and many research studies The continuing low usage despite all this suggests that there may be other, less obvious factors that are retarding the substitution of telecommunications for physical travel Figure 3 illustrates the concept that telecommuting usage may be more affected by implicit factors, which have a greater impact than the explicit factors illustrated in Figure 2 What kind of implicit factors could account for the low usage of telecommuting, despite the favorable explicit considerations? For possible explanations, I look to two theories: agency theory from the field of economics and (neo)institutional theory from sociology ORGANIZATIONAL, PERSONAL, ENVIRONMENTAL AND TECHNOLOGICAL ADVANTAGES AND DISADVANTAGES DEMAND FOR TELECOMMUTING Figure 2: Explicit advantages and disadvantages model 444 TELECOMMUTING AND TELEWORK PERSONAL, ENVIRONMENTAL AND TECHNOLOGICAL ADVANTAGES AND DISADVANTAGES (EXPLICIT, WEAKER EFFECTS) SOCIOLOGICAL AND ORGANIZATIONAL ADVANTAGES AND DISADVANTAGES (IMPLICIT, STRONGER EFFECTS) DEMAND FOR TELECOMMUTING Figure 3: Explicit and implicit advantages and disadvantages model Agency Theory This theory views relationships between managers and employees (and other economic relationships) as implicit contracts In such relationships, an employee (agent) can be compensated either on the basis of behavior (what he or she is doing) or on outcomes (results, e.g., commissions on sales) In a typical office environment, where employees are physically present every working day, it is relatively easy to monitor behavior The more days per week an employee telecommutes, the more difficult it is to monitor behavior, and it becomes increasingly necessary to evaluate outcomes For employees who are doing anything other than very routine processing, however, it is often difficult to measure outcomes Typically it requires more managerial time (an expense item) to evaluate outcomes than monitor performance Thus agency theory provides a plausible explanation for the often-noted reluctance of managers to allow telecommuting, and also the prevalence of 1-day-per-week classic telecommuting arrangements On the other hand, there have been numerous successful projects, in which organizations have generated large real estate savings by having salespersons and consultants work largely away from organizational offices Although it may be more appropriate to identify these employees as mobile workers, the continuing usage of these arrangements (in contrast to the many classic telecommuting implementations that have not persisted) is exactly what agency theory would predict Because such employees typically work on commissions or generate billings, they are already operating under outcome-based contracts Therefore, the shift away from organizational offices requires relatively minor adjustments by their managers (For more information on agency theory, see Eisenhardt, 1989.) Institutional Theory Sociologists consider the business office to be an institution: something that is considered by the larger society as the norm, the “right” way to do knowledge work These norms transcend distances and cultural differences; for example, business offices in the United States, Asia, and Africa are more similar or homogenous than the underlying cultures and political systems Although office work is highly institutionalized, classic telecommuting has not yet reached that status (As an indicator, although business offices often form the setting for scenes in movies or television shows, telecommuting workers are rarely seen.) It has a certain air of illegitimacy: other employees may view a person who is telecommuting as “not really working” while away from the office (e.g., Scott Adams’ portrayals of telecommuters in the Dilbert comic strip often reflect this perspective) Neighbors may wonder if the telecommuter has lost his job Telecommuting consultants frequently recommend increased managerial planning with and supervision of telecommuters, but from the perspective of institutional theory, this raises additional questions about the legitimacy of this mode of work in the minds of both employees and managers Institutional theory thus provides an alternative explanation for the low rate of telecommuting Most people don’t telecommute at all, or very much, because it is not as socially acceptable as traditional office work This theory also accounts for the frequent association of telecommuting and health issues, for example, doing some work at home on days when an employee is ill or has a medical appointment Telecommuting becomes more legitimate if there is an “excuse” for it, a connection with something that is recognized as an acceptable reason for being away from the office (The seminal work on neo-institutional theory is Meyer and Rowan, 1977.) RECOMMENDATIONS FOR STAKEHOLDERS One of the impediments to increased classic telecommuting is that there are a number of types of stakeholders, and what is good for one stakeholder is not necessarily a benefit for all the others Therefore recommendations must be addressed to the various stakeholders, but also must be harmonious with the needs and expectations of the others It is appropriate to start with organizations, because organizational policies and attitudes are usually the most important factor in determining whether specific employees can telecommute and how much telework occurs Organizations Employers need to consider telecommuting from a holistic perspective, so that they can deal with it based on its impacts on the overall performance of the whole organization, rather than just looking at how it affects the telecommuters In many cases, this perspective will lead to organizational policies that are not directed specifically toward telework but which, as a side effect, will lead to modest increases in classic telecommuting Organizations need to have contingency plans and organizational capabilities that make it possible to function effectively in the event of a disaster The more employees who have computer equipment and high-speed connections at home and who are comfortable using these capabilities, the better prepared they are for disasters These capabilities also enable employees to work more effectively at home after and before regular working hours at the office, contributing to increased organizational productivity And finally, this kind of infrastructure at home can lead to increases in classic telecommuting Therefore, organizational policies that make it easier or less expensive (or both) to acquire quality hardware, software, and telecommunications services can be very RECOMMENDATIONS FOR STAKEHOLDERS cost-effective Organizations can often provide such encouragement at relatively low cost by working out volume buying arrangements for hardware, software, and telecommunications services Various kinds of training can lead to improved organizational performance in general and also have positive implications for telecommuting Training for specific kinds of software used at the office, for example, integrated e-mail and calendaring systems, will also lead to more efficient usage of the same software on home computers Training in time management has obvious implications for better employee performance both at the office and while telecommuting Training in management skills can make managers more effective in handling employees at the office, mobile workers in the field, and employees who do classic telecommuting 1 day or more per week Telecommuting arrangements sometimes make it possible for organizations to retain key employees who would otherwise be lost because either the employee or the organization relocates Telework arrangements may make it possible for an organization to access employees with skills (e.g., computer programming) that might not otherwise be available These situations generally are unique enough to be handled on a case-by-case basis, rather than through formal organizational policies Employees Telecommuting offers substantial personal benefits, even if it is only done for an average of 1 day a week Some of these benefits—vehicle costs and reduction in commuting stress—are proportional to the length of the commute For example, at the standard U.S rate of 36 cents per mile in 2003, telecommuting 48 days per year instead of driving back and forth to a work location that is 15 miles away would amount to a savings of more than $500 (U.S dollars, undiminished by income taxes) per year For some employees, the reduction in commuting stress (White & Rotton, 1998) can be important, especially when bad weather or other factors make the drive worse than usual In some relatively rare situations, fulltime telecommuting makes it possible for an employee to maintain a desirable position within an organization after either the employee or the organization relocates These personal benefits need to be placed within the context of the employee’s standing in the organization and the needs of the employer, however If an employee possesses skills that would be difficult to replace, based on specialization or on experience with the organization, it may be possible for him or her to work out a favorable telecommuting arrangement Similarly, if the characteristics of the job are such that telecommuting makes a lot of sense for the organization, it may not be difficult to have a telecommuting arrangement For commission sales, and telephone customer service representatives outside regular working hours, it may be more cost-effective for the organization and more productive for employees to work most of the time out of their homes If the employee does not have that kind of a bargaining position or job description, the emphasis would necessarily shift toward the perspectives of (a) how telecommuting can improve the individual’s performance 445 and (b) how it can contribute to the overall effectiveness of the organization Although their organizations may not mention this explicitly, it would be a good idea for such telecommuters to reinvest their commuting time savings into extra work on organizational projects In a sense, telecommuting is a privilege, so it would be appropriate for telecommuters to demonstrate that their organizations are getting something of value in exchange for any inconveniences resulting from their physical unavailability Although there is little empirical backing for the claims of increased productivity, telecommuters would be wise to put in the extra time to fulfill the expectations that these repeated claims may have generated in the minds of their managers and within their organizations A high level of flexibility in scheduling telecommuting days is important to avoid inconveniences to other employees Employees who telecommute 1 day per week should, as much as possible, avoid telecommuting by necessity on a certain day of every week Whenever there is a conflict between a scheduled telecommuting day and organizational requirements, the employee should try to move the telecommuting to another day or, if that is not possible, forego telecommuting for that week Telecommuting should also be based on identifying tasks that can be accomplished significantly better when working away from the office If a task can be done equally well at the office or at home, in most cases it should be handled at the office to avoid inconveniences to other employees Based on this criterion, there may be weeks where telecommuting is not appropriate at all and other weeks where more telecommuting than usual can be justified Telecommuting Equipment, Software, and Other Considerations The requirements for hardware, software, and furnishings will vary depending on the type of work done while telecommuting, the frequency of telecommuting, the type of software and systems being used within the organization, and the telecommuter’s personal preferences and technical capabilities Cable or DSL connections are desirable for almost all telecommuters, because of the extra bandwidth and because they do not interfere with use of a single telephone line for voice communications The same business productivity software (word processor, spreadsheet, etc.) should be used at home as at work to avoid time-consuming compatibly and conversion problems For software categories that are less vulnerable to interoperability issues (e.g., e-mail systems, web browsers, computer program development environments), technically savvy telecommuters would do well to use software that differs from organizational standards if it makes them significantly more productive without creating problems for coworkers Regulatory Authorities At the public policy level, it is important to be aware that telecommuting participation and usage trends have not and probably will not result in noticeable reductions in the need for transportation infrastructure (see Mokhtarian, 1998) At the start of the 21st century, the total traffic volume reduction from classic telecommuting throughout 446 TELECOMMUTING AND TELEWORK the United States is not more than 3%, which is less than the annual traffic volume growth per year in some major urban areas in the country Responding to their employees’ concerns and the impacts on local labor markets, businesses have been effective in opposing regulations, such as parking space restrictions, that indirectly encourage telecommuting by making it more difficult for their employees to drive to work It is generally not worth the effort to enact stringent regulatory disincentives for alternatives to telecommuting In an era of tight budgets and increasing demands for government services, it is also difficult to justify governmental expenditures (direct spending or tax incentives) that would encourage telecommuting, because in most cases the benefits will not justify the costs The best course of action at the public policy level would be to let organizations and their employees work this issue out on their own with minimal government intervention This laissez faire stance would include avoiding policies that might have the side effect of discouraging telecommuting As an example of unfavorable policies to avoid, the Occupational Health and Safety Administration proposed standards that would require employers to inspect conditions in employees’ homes if they used their home computers to do any job-related work (Joyce, 2000), but this proposal was dropped after encountering strong opposition CONCLUSION After 30 years of research and experience with the concept, it is evident that classic telecommuting is not, and is unlikely to ever become, a panacea for problems in the areas of transportation, the environment, or oilrelated foreign policy Commonsense analyses of findings of telecommuting research also indicate that it does not generate sustained large improvements in organizational productivity that are noticeable at the bottom line Classic telecommuting is and will continue to be one option within organizational human resources policies Even though it has implications for all of the following, by itself it is not and will not be as important a human resources issue as recruiting, compensation, or training In most organizations, telecommuting will continue to be implemented on a case-by-case basis in response to the needs of specific organizational units and individual employees who may not be typical of the organization The continuing development of the Internet and other information technologies should contribute to increases in the proportion of work days where employees can substitute telecommunications for commuting without creating organizational problems The huge increases in information technology capabilities and great reductions in information and communications technology costs have had a limited impact on this substitution over the 30 past years, however It is questionable whether such technology trends, in the absence of other, more compelling considerations, are going to have a substantially larger impact on classic telecommuting over the next 30 years On the other hand, other forms of telework will grow rapidly This growth should to continue until it approaches saturation of the employees whose job functions require them to work outside of organizational facilities at least part of the time One reason for the differing outcomes is that, in contrast to the effects of classic telecommuting, this form of telework actually increases the amount of contact between remote workers and other members of the organization GLOSSARY After-hours telecommuting Using information and communications technologies to perform organizational work after (or before) regular working hours Classic telecommuting Substituting information and communications technologies for physical commuting to a work location Free-address workspaces Unassigned organizational workstations available to employees on a first-come, first-served basis Full-time telecommuting Classic telecommuting on (usually) every day of the work week Home workers Persons who use their homes as the base for doing most or all of their paid work Hoteling Providing organizational workspaces that are available on a reservation basis Mobile worker An employee who primarily works outside of organizational offices and uses information and communications technologies for communications with supervisors, for scheduling and routing, and so on Moore’s Law (as commonly understood) The doubling of computer processing power every 18 to 24 months, without increases in costs Part-day telecommuting Telecommuting for part of a work day and working at organizational offices for the remainder Telecommuting center (sometimes called a satellite center) An office facility between employees homes and their regular workplaces, where they can work instead of driving all the way to their organizational locations Telecommuting frequency How often (e.g., how many days per week) classic telecommuters substitute telecommunications for physical travel to work Telecommuting participation The percentage of employees (in an organization, region, or throughout a national economy) who engage in classic telecommuting Telework Work at a distance from organizational or other facilities Virtual office A location or workplace that enables a person, by means of information and telecommunication technologies, to work together with others who are not physically nearby Virtual organization A (usually short-term) venture composed of components and personnel from different organizations that may be widely separated geographically, and that requires or is enabled by extensive use of telecommunications capabilities for coordination and communications CROSS REFERENCES See GroupWare; Internet Literacy; Virtual Enterprises; Virtual Teams REFERENCES REFERENCES Bailey, D E., & Kurland, N B (2002) A review of telework research: Findings, new directions, and lessons for the study of modern work Journal of Organizational Behavior, 23, 383–400 Christensen, K (1988) Women and home-based work: The unspoken contract New York: Holt Eisenhardt, K M (1989) Agency theory: An assessment and review Academy of Management Review, 14, 57–74 Forster, E M (1909) The machine stops Oxford and Cambridge Review Retrieved March 13, 2003, from http://www.plexus.org/forster.html Harkness, R C (1973) Communications substitutes for travel: A preliminary assessment of their potential for reducing urban transportation costs by altering office location patterns Unpublished doctoral dissertation, University of Washington, Seattle Huws, U., Korte, W., & Robinson, S (1990) Telework: Toward the elusive office New York: Wiley “It’s rush hour for telecommuting.” (1984, January 23) Business Week, 99, 102 Joyce, A (2000, January 5) Reversal sought on OSHA telecommuting rule The Washington Post, p E01 Kidder, T (1981) The soul of a new machine (1st ed.) Boston: Little, Brown Kraut, R (1989) Telecommuting: The trade-offs of home work Journal of Communication, 39, 19–47 Memmott, F W., III (1963) The substitutability of communications for transportation Traffic Engineering, 33, 20–25 Meyer, J W., & Rowan, B (1977) Institutionalized organizations: Formal structure as myth and ceremony American Journal of Sociology, 83, 340–363 Mokhtarian, P L (1996) The information highway: Just because we’re on it doesn’t mean we know 447 where we’re going World Transport Policy and Practice, 2(1/2), 24–28 Retrieved March 13, 2003, from http://www.its.ucdavis.edu/telecom/nrp12.html Mokhtarian, P L (1998) A synthetic approach to estimating the impacts of telecommuting on travel Urban Studies, 35, 215–241 Nilles, J M (1994) Making telecommuting happen: A guide for telemanagers and telecommuters New York: Van Nostrand Reinhold Nilles, J M., Carlson, F R., Jr., Gray, P., & Hanneman, G J (1976) The telecommunications–transportation tradeoff New York: Wiley Olson, M H (1989) Organizational barriers to professional telework In E Boris & C R Daniels (Eds.), Homework: Historical and contemporary perspectives on paid labor at home (pp 126–134) Chicago: University of Illinois Press Prusak, L., & Cohen, D (2001) In good company: How social capital makes organizations work Boston: Harvard Business School Toffler, A (1980) The third wave New York: William Morrow Wells, H G (1899) When the sleeper wakes Retrieved March 13, 2003, from http://www.neponset.com/books/ sleeper/sleep00.htm Westfall, R D (1997) Does telecommuting really increase productivity? Fifteen rival hypotheses Proceedings of the AIS Americas Conference Retrieved March 13, 2003, from http://www.cyberg8t.com/westfalr/prdctvty html White, S M., & Rotton, J (1998) Type of commute, behavioral aftereffects, and cardiovascular activity: A field experiment Environment and Behavior, 30, 763– 780 Wiener, N (1950) The human use of human beings: Cybernetics and society Boston: Houghton Mifflin Trademark Law Ray Everett-Church, ePrivacy Group, Inc Introduction Trademark Defined Federal Trademark Law Trademark Registration The Differences Between R , TM , and SM State Statutes and Common Law Infringement and Dilution Infringement Dilution Other Trademark Claims Parody and Fair Use Policing Trademark on the Internet Meta Tags 448 448 449 449 450 450 451 451 451 451 452 452 452 INTRODUCTION Trademark law is a fascinating subject for many people, in part because most everybody in our society understands and appreciates the power of popular trademarks, such as Lexus, Pokemon, Safeway, and Yahoo! Trademarks are such an integral part of our language and culture that we all have a vested interest in their protection Because trademarks are all about meaning, trademark disputes are a kind of spectator sport: They involve popular cultural icons and turn on questions such as whether the average person is likely to be confused if a trademark is used improperly So in many respects, everybody gets to have an opinion on trademark issues, and that opinion more often than not counts for something in the final calculus of trademark disputes In this chapter, I discuss the fundamental ideas that underlie the protection of trademarks and look at ways in which trademarks can be infringed and protected Once that groundwork has been laid, I then look at how these fundamentals have been to be applied to the unique and significant disputes that have arisen in the Internet context In many respects, trademark law has been turned upside down the Internet, so I describe how the principles of trademark law are being applied in today’s Internetoriented business environment TRADEMARK DEFINED Merriam-Webster’s Dictionary of Law defines trademark as “a mark that is used by a manufacturer or merchant to identify the origin or ownership of goods and to distinguish them from others and the use of which is protected by law.” In practice, a trademark is any word (Sun), name (Calvin Klein), symbol (golden arches), device (the Energizer Bunny), slogan (“Fly the Friendly Skies”), package design (Coca-Cola bottle), colors (FedEx purple and orange), sounds (the five-tone Intel Corporation sound), or 448 Deep Linking Domain Names Domain Name System Basics Domain Name Registration Internet Domain Disputes Cybersquatting Anticybersquatting Consumer Protection Act ICANN Domain Name Dispute Process Conclusion Glossary Cross References References 453 453 454 454 455 455 455 456 457 457 457 457 any combination thereof that identifies and distinguishes a specific product or service from others in the marketplace As trademark law has evolved, the field has become an important subset of the larger category known as intellectual property law As the name implies, intellectual property law (which also includes patent, copyright, and trade secret law) treats these rights as a kind of property right, protecting the rights of owners to exploit the property for their own benefit while prohibiting unauthorized use by others Unlike real estate or personal property law, intellectual property law concerns ownership of intangible things such as ideas, words, and meanings, rather than physical things The legal protections afforded by trademark law also extend to the related concepts of service marks and trade dress Service marks differ from trademarks in that they are marks used to identify a particular service or to distinguish the provider of a service, rather than a tangible product For example, the name of a consulting firm, or the name of a proprietary analytical process used by that consulting firm, might be more properly identified as a service mark Trade dress is the overall image of a product, composed of the nonfunctional elements of its design, packaging, or labeling This could include specific colors or color combinations, a distinctive package shape, or specific symbols or design elements Many people confuse trademark with copyright Copyright is a person’s exclusive right to benefit from the reproduction or adaptation of an original work of authorship, such as a literary, artistic, or musical work Trademark differs from copyright in that trademark law does not prohibit the reproduction or adaptation of the creative products of an author Rather trademark law seeks to prevent confusion over words or other characteristics used to identify uniquely the source or quality of a product or service For example, Paul Simon’s 1973 song “Kodachrome” refers to a trademark owned by Eastman Kodak Company even though Simon holds the copyright on his work FEDERAL TRADEMARK LAW The relative strength of a particular trademark depends upon where it falls within a range of five categories: fanciful, arbitrary, suggestive, descriptive, or generic The greatest protection comes for fanciful marks consisting of invented words such as Xerox, Kodak, or TiVo The next strongest protection comes for arbitrary marks, which are commonplace words used in a manner that is unrelated to their dictionary meaning, such as Apple for computers or Shell for gasoline Suggestive marks are familiar words or phrases that are used in an inventive way to “suggest” what their product or service really consists of, such as Home Box Office for a movie channel or Mail Boxes Etc for a postal services franchise The least protection comes for descriptive marks that do little more than describe the characteristics or contents of the product, such as the publication Automotive Industry News, or Cellphone Center for a cellular telephone retailer Finally, generic names, which merely state what the product or service is, cannot function as trademarks Some marks, such as aspirin, linoleum, escalator, or nylon, were once trademarks but became generic because the trademark holder failed to police unauthorized use FEDERAL TRADEMARK LAW For trademarks used in interstate commerce, U.S law provides protection under the Trademark Act of 1946, known more commonly as the Lanham Act The Lanham Act also created a registration process for trademarks and legal and procedural incentives for trademarks to be registered with the U.S Patent and Trademark Office (USPTO) (USPTO, n.d.) Many states within the United States also afford trademarks protections under their state’s laws The Lanham Act provides a functional definition of what is eligible to be registered as a trademark Potentially anything can be registered as a trademark if it functions among consumers to distinguish a specific product from other products in the marketplace The Lanham Act does, however, prohibit certain marks, including anything immoral, deceptive, scandalous, disparaging toward an institution or national symbol; anything that falsely suggests a connection to a person, that consists of a flag other governmental insignia, or that uses a name or portrait of a deceased U.S president during the life of his widow without her consent; and numerous other limitations Once registered, a mark may also be cancelled if it has become generic, has been abandoned, was obtained through fraud, or is otherwise prohibited by the aforementioned conditions One important limitation on registration comes when the mark is part of the product’s functionality An aspect of the product may meet the definition of a trademark and may even be recognized as a trademark by consumers, but it cannot be registered if it is essentially a functional aspect of the product For example, a company might sell a computer monitor with a unique shape that is immediately recognizable to the public and distinguishes the monitor from the products of competitors Under the functional definition of a trademark, the unique shape may be registered If the shape is actually a functional aspect of the product, for example, if the shape is responsible for improved resolution, the shape cannot be 449 registered as a trademark (In such a case, however, the manufacturer may be able to seek patent protection for the unique design.) The USPTO registers trademarks and service marks that are used in interstate commerce Trademarks need not be registered for an owner to enforce his or her rights in court; however, federal registration provides numerous legal benefits to a trademark owner at a reasonable expense For example, once a mark is registered, the registration establishes the validity the registrant’s claims of ownership and places the world on constructive notice that the owner has exclusive rights to use the mark in commerce If the holder of a registered trademark establishes infringement under the Lanham Act, the holder not only can enjoin any misuse of a mark but also can recover statutory damages and, in some cases, attorneys’ fees Federal registration on the principal register gives nationwide protection from infringement, whereas common law protects the mark only in the specific geographical area in which the mark is used in commerce; and state law protects the mark only within the state where the mark is registered Thus, another benefit of federal registration is the establishment of rights across a larger geographical area than under common law and state law In fact, the scope of protection for a federally registered mark is usually broader than under common law or state law For example, under common law and many state trademark registration statutes, trademark protections may be restricted to those specific products or services for which the mark has explicitly been used, whereas federal law allows a mark to be protected even when used in conjunction with a wider array of related products or services, such as a family of services offered under an umbrella trademark Finally, the Lanham Act provides legal remedies that go beyond those available at common law including, for example, treble damages against a “willful” infringer, as well as reimbursement of attorney fees in exceptional cases It is important to note, however, that unlike many areas in which federal law supercedes state law, state and federal trademark law often co-exist well and aggrieved parties can frequently bring legal actions using both state and federal law to equal effect The Lanham Act’s protections flow equally to trademarks and service marks Trade dress is also protected by the Lanham Act, provided it is not a functional part of the product and is distinctive, has acquired secondary meaning as being uniquely associated with the product, and there is a likelihood of confusion on the part of the consumer if a competing product were to possess similar trade dress Trademark Registration The USPTO maintains two types of trademark registries, the Principal Register and the Supplemental Register The Principal Register is where a “registered trademark” is registered There are three ways a trademark or service mark may be registered with the USPTO The first method, called an “in use” application, is for an applicant who is already using a mark in commerce The second method is an “intent to use” application, for marks that are not yet in use but that the applicant is preparing to use The third 450 TRADEMARK LAW method is based on certain international agreements, by which applicants outside the United States can file an application based on applications or registrations in another country The Supplemental Register is where marks that are descriptive in nature but have not yet established secondary meaning are maintained Marks on the Supplemental Register can use the R symbol, and if the mark is continuously used and unchallenged for 5 years, the holder may file another application and claim such use presumptively establishes secondary meaning under Section 2(f) of the Lanham Act, and thereby move the mark onto the Principal Register The registration process itself is relatively straightforward The application documents must be filed by the owner of the mark, usually through the services of an attorney concentrating in trademark law (For brevity this chapter focuses only on an “in use” application and does not discuss further the “intent to use” application.) The application contains information about the individual or corporation that owns the mark, an exact representation of the mark (in text or in image form), as well as several specimens of the mark in actual use, information about the date of first use and date of first use in commerce of the mark, a description of the goods or services used in conjunction with the mark, and the “classification” of the goods or services according to a standardized list of 42 predefined classifications Some goods and services may be registered in multiple classes, with the application fees increasing accordingly Once received, the USPTO makes an initial review of the application to determine if the application contains all the information necessary to be considered “filed.” If the application is complete, a “filing date” is issued along with a serial number and sent to the applicant Several months after filing, an examiner at the USPTO reviews the application in more detail, researches the information provided, and makes a determination as to whether the mark should be registered If it cannot be registered, the examiner will issue a notice called an “office action,” which explains the grounds for refusal, including any deficiencies in the application itself In some cases, only minor adjustments might be necessary to permit registration, and sometimes the application can be corrected over the phone Applicants have six months to respond to an office action before the application is considered abandoned If the applicant cannot overcome the examiner’s objections, a final office action is issued, at which point the applicant may appeal to the Trademark Trial and Appeal Board Should the applicant be unsuccessful there, that decision may be appealed to federal court If there are no objections to the application, or the applicant overcomes the objections, the examiner will approve the mark for publication in the Official Gazette, a weekly publication of the USPTO The applicant is notified of the date of publication through an official Notice of Publication Anyone who believes the registration harms him or her or that it is otherwise in violation of the Lanham Act has 30 days from publication to file an opposition to the registration or seek an extension of time to do so At this point, the administrative proceeding is inter partes (meaning between two parties, in contrast to an ex parte proceeding before the examiner only) and is known as an “opposition.” The opposition proceeding determines the validity of the objections If no objection is received, the mark will be registered After the registration is issued, anyone who believes himself or herself to have been harmed by the registration may begin a “cancellation proceeding,” which is similar to an opposition proceeding except that it takes place after registration In an opposition, the applicant bears the ultimate burden of establishing registerability; in a cancellation, the party seeking the cancellation bears the burden of proving the registration was improvidently issued Opposition and cancellation proceedings are held in a formal, trial-like hearing before the Trademark Trial and Appeal Board, a division of the USPTO A mark will be registered only after it has been published and the opposition period has expired Once registered, federal trademark registrations run for 10 years, with renewal terms lasting 10 years Between the fifth and sixth year, however, the registrant must file an affidavit to confirm the mark is still in use If that affidavit is not filed, the registration is cancelled Thus, a trademark must remain in use or its registration may be cancelled, but if a mark is in continual use and that use is properly demonstrated as required by law, the registration could remain effective forever After five years, the owner of a registered mark may request that the mark be deemed “incontestable.” Under the Lanham Act, incontestability means that certain legal avenues of challenging the mark-such as a claim that the mark is not distinctive, lacks secondary meaning, is confusingly similar to another mark, or the mark is purely functional—are no longer available The term “incontestable” is somewhat misleading in that there remain certain circumstances in which the mark may be challenged and have the registration cancelled, such as an assertion that the mark was improperly registered in the first instance The Differences Between R , TM , and SM Once registered, the registration symbol, R , may be used It is considered trademark misuse to display the registration symbol at any point before the USPTO issues the final registration notice to the applicant In contrast, anyone who wishes to claim rights in a mark may use the TM (trademark) or SM (service mark) designation along side the mark Use of TM or SM alerts the public to the claim of ownership and exclusive use It is not necessary to have a registration, or even a pending application, to make use of these designations, and consequently the claim may or may not have any validity In short, use of TM or SM tells the world that the party using the trademark is prepared to put up a fight STATE STATUTES AND COMMON LAW Many states also have trademark registration statutes that allow registration of marks used in intrastate commerce, using procedures that function similarly to the USPTO process defined by the Lanham Act In addition, all states INFRINGEMENT AND DILUTION protect unregistered trademarks under some combination of state statute and common law For the sake of brevity, this section does not detail trademark protections in all 50 states In most states, the common law recognizes ownership of a trademark Ownership under common law is most often established by demonstrating when the mark was first used in commerce, but unlike federal law, common law protections extend only to those areas or markets in which the mark is actually used In contrast, federal registration of a trademark gives a basis under federal law for a suit for infringement, in addition to any common law claims that might be available Although it is possible to protect one’s rights using only common law or state statutory protections, the benefits that flow from federal registration make it highly desirable INFRINGEMENT AND DILUTION There are two main rights that trademark owners will assert: infringement and dilution Infringement of a trademark usually involves the use of the mark in a way that is so similar to the owner’s usage that the average purchaser will likely be deceived, will mistake the infringing goods for the original, or will likely experience confusion Dilution is a lessening of the value of a trademark caused by an unauthorized use of the mark, regardless of whether any actual confusion, deception, or mistake occurred Infringement Under the Lanham Act, the standard for determining whether a mark is infringing is whether there is a “likelihood of confusion” over the mark in a particular usage context More specifically, infringement comes when a consumer is likely to be confused over the source, sponsorship, or approval of the goods bearing the mark In deciding whether consumers are likely to be confused, courts have previously looked at a number of factors, including the following: r r r r r r r r Similarity between the two marks (such as any visual, phonetic, or contextual similarities), Similarity of the goods or services being offered, Proximity of the goods in a typical retail setting, Strength of the plaintiff’s mark as exemplified by how well known the mark is to the public at large, Evidence of any actual confusion by consumers, Evidence of the defendant’s intent in using the mark, Likely level of care employed by consumer in the purchase of that type of product, and Likely growth or expansion of the product lines Of these eight factors, the first two are arguably the most important For example, using an identical mark on an identical product is a clear case of infringement, such as a company other than Ford manufacturing a midsized automobile and calling it a Taurus Similarly, calling the vehicle a Taurius would run into problems (This use of similarly spelled names is of particular concern in the 451 Internet domain name context, which will be discussed in a later section.) Mere similarity is not always determinative of infringement For example, it is possible to find Delta Faucets just a few aisles away from Delta power tools at your local home improvement store Although made by different companies, the similarity in trademark does not constitute infringement because consumers are not likely to mistake a belt sander for a shower head Dilution To clarify further the distinction between normal trademark infringement and dilution, in 1995 Congress amended the Lanham Act by passing the Federal Trademark Dilution Act (FTDA) This legislation expanded protections granted to famous and distinctive trademarks under the Lanham Act Unlike infringement, dilution does not require evidence of a likelihood of confusion Instead, the plaintiff must demonstrate that their mark is “famous,” that it is being used in commerce by another party, and that the use causes the dilution of the “distinctive quality” of the mark The FTDA says that in determining whether a mark is “famous,” a court may look at factors including the length of time a mark has been used, how widely and in what geographic areas it as been advertised, how recognizable the mark is to the public, and other factors Highly distinctive, long-used, and well-known marks, such as Coca-Cola or Kodak, are examples of famous marks Once a plaintiff establishes the fame of a mark, the owner can seek an injunction against further use of the mark in a manner that dilutes the distinctive qualities of that mark There are two types of dilution of a mark: blurring and tarnishment Blurring Blurring is the weakening of a mark through its identification with dissimilar goods For example, marketing Kleenex brand refrigerators would not likely confuse someone looking for bathroom tissue and cause them to purchase a refrigerator accidentally; however, the use of the trademark would dilute the mark’s distinctiveness as representing personal care paper products Tarnishment Tarnishment is the use of a mark in an unflattering light, through associating it with either inferior or distasteful products For example, in the case Toys ‘R’ Us v Akkaoui, (1996), the toy retailer brought a successful tarnishment claim against a pornographic Web site “adultsrus.com.” Other Trademark Claims Although dilution claims and infringement claims based on likelihood of confusion are the two most common trademark-related causes of action, there are a number of other bases for bringing suits Many states have enacted unfair competition laws that prohibit a range of activities known as passing off, contributory passing off, reverse passing off, and misappropriation 452 TRADEMARK LAW Passing Off Passing off occurs when a defendant attempts to “pass off” its product as if it were the mark owner’s product For example, affixing a Dell nameplate to computers actually made in someone’s basement would constitute passing off Contributory Passing Off Contributory passing off occurs when a defendant induces a retailer to pass off a product For example, bribing a computer store to sell computers with a fake Dell nameplate would be contributory passing off Reverse Passing Off Reverse passing off takes place when someone tries to market someone else’s product as their own If a computer store purchased Dell computers, replaced the nameplate with its own store brand nameplate, and attempted to sell the computers, it would have engaged in reverse passing off Misappropriation Misappropriation, a privacy-related tort, is traditionally defined as using the name or likeness of someone for an unauthorized purpose, such as claiming a commercial endorsement by publishing someone’s image (or even that of a look-alike impersonator) in an advertisement In the trademark context, using a mark without authorization can violate federal and state law prohibitions on certain unfair trade practices, including the unauthorized use of marks in inappropriate ways Parody and Fair Use Aside from challenging the validity of a trademark claim or attacking the elements of the infringement claim, defendants in trademark infringement or dilution cases can also claim two affirmative defenses: parody and fair use Parody Certain uses of a trademark for purposes of humor, satire, or social commentary may be permissible if they are not closely tied to commercial use The theory underlying the protection of parody is that artistic and social commentary are valuable contributions to the society, therefore some deference to the First Amendment’s protection of these types of speech is in order, even when balance against the detriment to a trademark owner The protections vary, however For example, in the highly amusing case of Hormel Foods Corp v Jim Henson Productions (1996), the use of a piglike character named “Spa’am” in a Muppet movie was found not to violate Hormel’s rights in the trademark “SPAM.” In Coca-Cola Co v Gemini Rising, Inc (1972), however, the printing of posters with a stylized slogan and logo reading “Enjoy Cocaine” were found to violate the rights of Coca-Cola in the stylized slogan and logo “Enjoy Coca-Cola.” Fair Use Fair use occurs when the public benefit of allowing the use is perceived to override any perceived harm to the trademark owner For example, in the case Zatarains, Inc v Oak Grove Smokehouse, Inc (1983), the defendant’s use of “fish fry” to describe a batter coating for fish was not an infringement of the plaintiff’s mark “Fish-Fri.” The court held that fair use prevents a trademark owner from monopolizing a descriptive word or phrase to the exclusion of other parties that seek merely to describe their goods accurately The defense of fair use is only available, however, when the mark at issue is descriptive, and then only where the descriptive term is used descriptively Federal trademark statute also contains a right to fair use limited to usage in comparative advertising POLICING TRADEMARK ON THE INTERNET Along with the tremendous growth in the usage of the Internet for both commercial and personal use, there has been a similar expansion in the number of trademarkrelated disputes involving the Internet In a later section, I discuss the complex legal issues arising from trademark disputes over Internet domain names First, however, there are a number of trademark issues that arise just from the very nature of the Internet as a facilitator of ubiquitous information sharing and access Perhaps the most important reason behind the growing amount of trademark-related litigation is that uncovering instances of trademark violations can be as simple as typing your trademark into an Internet search engine Just a decade ago, a trademark owner in Maine might have no idea that his trademark might be in use by someone in Oregon With the ability to search the Internet, trademark owners are quickly able to perform searches that might have been impossible—or just impossibly costly— a few years ago The ability to discover trademark infringement so easily, both intentional and unintentional, has catapulted trademark law into one of the most active areas of litigation in the Internet arena The nature of trademark law itself has also added to the litigation explosion As noted earlier, failure to police a mark properly can result in it becoming generic, and thus unprotected Therefore, the same ease with which a trademark owner might uncover infringement may require that a trademark owner keep policing the Internet routinely and bring enforcement actions: If an infringement is known—or could be discovered through basic due diligence—and goes unchallenged, the trademark owner could lose control of its mark The requirement of constant policing of trademarks has, however, caused the unfortunate side effect of a growing number of heavy-handed actions against inexperienced Web users, and still more enforcement actions that are brought in cases in which a finding of infringement or dilution is highly unlikely In many of these cases, wellintentioned individuals have been bullied by corporations over trademarks appearing on personal Web pages In some cases that have received significant media attention, sites created by fans of rock groups, automobiles, and movie stars have been threatened by the very entities that the sites were set up by their creators to honor Meta Tags In recent years, several disputes have arisen over the use of trademarks in meta tags on Internet Web pages Web DOMAIN NAMES pages are coded using a type of programming language called hypertext markup language, or HTML The codes that are embedded in HTML documents, called tags, tell the browser how to display the information contained on the page, such as when to display words in bold, when to change fonts or font sizes, how to align tables, or where to place images Web page designers can also include meta tags, which are special tags that contain information about the contents of the Web page Meta tags are used by search engines to find and rank pages so that more relevant search findings are displayed before less relevant ones In one of the first lawsuits over meta tags, Oppedahl & Larson v Advanced Concepts, et al (1997), a Colorado law firm discovered that the defendants had put the law partners’ names, “oppedahl” and “larson,” in meta tags on several Web pages This was presumably done in hopes that searches for the respected law firm’s name would gain more attention for the defendants’ Web pages Suing under both the Lanham Act and the Federal Trademark Dilution Act, as well as state and common-law unfair trade practice actions, the law firm won a permanent injunction against any further use of its names in meta tags on the defendants’ Web sites Since that case, a number of other disputes have tested the extent to which trademarks may be used in meta tags and have largely resulted in prohibitions against uses by entities seeking to enhance site traffic by using the marks of competitors One of the issues that has arisen in meta tag disputes is the concept of “initial interest confusion.” Initial interest confusion occurs when the use of another’s trademark is done so in a manner reasonably calculated to capture initial consumer attention, even though no actual sale is finally completed as a result of the confusion The case of Brookfield Communications, Inc., v West Coast Entertainment Corp (1999) illustrates the issue Brookfield operated a Web site, MovieBuff.com, containing a movie database West Coast, a video retailer, used the term “moviebuff” in meta tags on its Web site A court held that West Coast’s use of term in meta tags led to “initial interest confusion,” in which search engine users looking for MovieBuff.com’s site might visit West Coast’s site and stop looking for MovieBuff.com, even though there might never be any confusion over sponsorship of the two sites Not all cases in which meta tags were at issue have resulted in a ban on their use For example, in the case of Playboy Enterprises, Inc v Terri Welles (2002), a model who had posed as a Playboy Playmate of the Month was permitted to use “Playboy” and “Playmate” as meta tags for her Web site Deep Linking Fundamental to the functioning of Web pages on the Internet is the concept of a link A link, short for hyperlink, is a tag coded within a Web page that turns a piece of text (or in some cases an image) into a pointer to another document or page Clicking on that link will typically cause the browser to follow the link and open the new page Although a simple link to the home page of a Web site will not typically run into trademark issues, some sites choose to create links to pages many levels down within 453 a site For example, instead of linking to the home page of a manufacturer, a Web site designer might choose to create a link that goes directly to a page displaying one of the manufacturer’s products This practice is called deep linking Some site owners object to deep linking because it allows visitors to quickly bypass other contents of a Web site, including advertisements, which they would normally see if they had to navigate step-by-step through the contents of a site In several court cases, plaintiffs have charged that deep linking deprives them of the full benefits of having visitors explore their site and have argued a variety of copyright, trademarks, and unfair competition claims Proponents of deep linking counter that deep links are no different from footnotes or bibliographies, permitting readers to jump quickly to precise information There are few clear court decisions on the trademark implications of deep linking; however many of the suits have focused on evidence of a defendant’s bad faith, such as any appearance that the deep linking is intended to take unfair advantage of the other site’s content, which will cut strongly in favor of the plaintiff In a related issue, there have been numerous disputes over the practice of “framing” Internet content Framing is a technique in which content from one site is displayed within a “frame” appearing on another unrelated site The use of framing often makes it appear that the content is owned or otherwise presented by an entity other than its actual owner or authorized user Most disputes regarding framing have centered on copyright implications of unauthorized framing of content; however, trademark issues also arise when there might be confusion as to the source of the content or its relationship to advertisements and other affiliations that might be suggested by the way in which the framed material appears DOMAIN NAMES With the explosive growth of the Internet, both in its importance to global commerce and in the effect it has had on all aspects of our society, the importance of the domain names used on the Internet cannot be understated The academic and noncommercial roots of the Internet caused many of its key functions, such as the domain name system, to be designed without some important safeguards For example, domain names could then—and in many cases can still—be registered by anyone willing to pay the registration fee In the early days of the Internet, this fact caused something of a “land grab” mentality in which speculators rushed to purchase the rights to domain names that were expected to become valuable Indeed, the domain name WallStreet.com, registered for under $100, was reportedly sold for more than $1 million (Bicknell, 1999) Unfortunately however, some speculators also rushed in and purchased domain names that were identical (or in some cases merely similar) to valuable brand names These so-called cybersquatters sought to gain financially by occupying the “virtual” real estate of someone else’s trademark translated into a domain name Because a domain name has become such an important part of a company’s marketing identity, trademark owners have been 454 TRADEMARK LAW forced to wage legal battles to retake control of their trademarks in cyberspace Cybersquatting is discussed in detail in a later section, but it may be useful to look first at how domain names work and why they have become a trademark law battleground Domain Name System Basics Generally speaking, each computer connected to the Internet requires a unique address, called an Internet protocol (IP) address, in order to distinguish it from all the other computers on the Internet When computers communicate across the Internet, they use IP addresses to ensure that when a user on a particular computer requests data from another computer, the data gets delivered to the right place IP addresses are not friendly to human eyes Looking something like “192.168.27.145,” it was quickly determined that it would be easier to assign names to stand in for those numbers because many humans find it easier to remember names than to remember numbers Thus, the designers of the early Internet developed the domain name system (DNS) to permit the reliable association of names with IP addresses As a result, with the help of DNS, when users tell their Web browsers that they want to check out the latest news at CNN.com, it is able to direct the query to 64.236.16.116, which is one of the many Web servers that answer to the busy CNN.com domain name Domain names, and their underlying numbers, are controlled by the Internet Corporation for Assigned Names and Numbers (ICANN) ICANN controls not only the allocation of IP addresses and the network of domain name registrars who control all domain names but also delegate operation of the root servers The root servers, the heart of the domain name system, are a collection of servers operated around the globe that manage all requests for information about the top-level domains (TLDs) TLDs are simply a means of organizing domain names into broad categories As of this writing, there are 14 generic TLDs in which entities or individuals can register secondary domains, in some cases subject to certain restrictions They include the following: com for commercial sites, net for networks, org for nonprofit organizations, gov for U.S federal government sites, edu for educational institutions, int for entities created by international treaties, mil for U.S military sites, biz for businesses, info for general use, name for personal use by individuals, pro for professional fields such as lawyers and accountants (this TLD was still inactive as of February 2003), aero for the aerospace industry, coop for cooperatives, and museum for museums There are also more than 200 country code TLDs (ccTLD), based on the two-letter country codes for the worlds recognized nations Examples include the following: us for the United States, uk for the United Kingdom, ca for Canada, mx for Mexico, de for Germany, and jp for Japan When you enter a domain name into your browser (for purposes of this example, I use www.example.com) here is—in theory—how the domain name system works to assure you get to the web site you want: r r r r r Your browser communicates your request for www example.com, via your Internet connection, to the Domain Name Servers designated for your use by your Internet service provider Your service provider’s domain name servers in turn ask the upstream DNS servers (and, if necessary, eventually, the root servers) to search their database for the IP address of the domain name servers that are authoritative for the TLD “com.” Your query is then passed to the domain name servers for “com,” which then search their database for the IP address of the domain name servers that are authoritative for the second-level domain “example” within the top level domain “com.” Your query is then passed to the domain name servers for “example.com,” which then searches their database for the IP address of the server that answers to the subdomain “www” within that second-level domain Once it locates the correct IP address, it tells your Web browser what IP address to connect to, whereupon that server recognizes your request for a Web page and transmits the appropriate data back to your computer This is “in theory” because in reality, this process can be simpler, or more complex, depending on how your ISP chooses to manage its DNS requests For example, some ISPs keeps a record of previous DNS requests in a “cache” file so that it can better manage time lag and server load issues by serving up IP addresses that it trusts are probably still correct because they were looked up a few hours earlier Domain Name Registration The first challenge in registering a domain name is to identify a domain name that is suitable for your needs Depending on the intended use of the domain name, there are many considerations, beginning with the choice of TLD that best suits your vision for your domain Once you have decided on the TLD, you may have a choice of registrars delegated by ICANN to manage the process of domain name registration For example, as of this writing there are several hundred ICANN-accredited registrars, not counting the designated registrars for all the country code TLDs DOMAIN NAMES Once you have selected a registrar, you will communicate to it what second-level domain you wish to register In most cases, the registrar will check its records and determine whether the domain name requested is already registered or might have previously been reserved Presumably you will have checked to see if there is a Web site already operating at the domain name you have selected; however, the absence of an active site is not determinative, because it is possible for a domain name to be registered but not in active use If the second-level domain name you desire has not been previously registered, you will likely be given the choice to register it Upon providing contact and billing information, and paying the registrar’s fee, of course, you will also be asked to provide the IP addresses of a primary and a secondary domain name server for your domain Although some registrars offer the option of also hosting the domain on their own servers, you may need to have previously arranged with an ISP to establish the technical details necessary for operating DNS, Web, and e-mail services for your newly chosen domain name If you have set up these services in advance, however, then it is possible to have your new domain fully functional within just a matter of minutes or hours of completing the registration process Internet Domain Disputes Far and away the greatest amount of trademark-related controversy on the Internet concerns use of domain names Because of both the value of trademarks themselves and the value of memorable domain names for maximizing the marketing and sales power of online operations, using popular trademarks as domain names has been an important issue for businesses beginning to make use of the Internet Much to their consternation, however, many companies have attempted to register domain names related to their company name or their trademarks only to discover that someone else has already registered those domain names In the course of many legal disputes over domain names, some consensus among the courts has developed Most courts have applied trademark law in much the same fashion as they would in any other trademark dispute For example, marks are assessed for the extent to which they are fanciful, arbitrary, suggestive, descriptive, or generic Disputes have also been judged on whether there is evidence of bad faith on the part of either party In the Oppedahl & Larson case discussed earlier, there was no reasonable basis for the defendants to be making use of “Oppedahl” and “Larson” other than their desire to garner traffic attracted by someone else’s mark The most common method of using a trademark in a domain name is the verbatim use of the mark in conjunction with the TLD, such as Pepsi.com A related form of trademark infringement comes in dilution through the registration of similar domains, or domains containing misspellings or common typographical errors Disputes over domains such as “amazom.com” (instead of amazon com), gateway20000.com (instead of gateway2000.com), and micros0ft.com (microsoft.com with the second letter “o” replaced with a zero), have almost uniformly 455 resulted in court decisions or settlements transferring domain ownership to the aggrieved party These and other cases of infringement have resulted in a new area of law— and even of legislation—focused on resolving trademarkrelated domain name disputes Cybersquatting In the mid-1990s, Dennis Toeppen registered some 250 domain names that were either similar or identical to popular trademarks, including deltaairlines.com, eddiebauer com, neiman-marcus.com, northwestairlines.com, and yankeestadium.com In two cases considered pivotal among domain name trademark disputes, Intermatic Incorporated v Toeppen (1996) and Panavision Int’l, L.P v Toeppen (1996), the plaintiffs successfully forced Toeppen to relinquish control of the domains intermatic.com and panavision.com, respectively The Panavision case in particular illustrates how many of the cybersquatting disputes play out In 1995, Toeppen registered the domain name www.panavision.com and created a Web site that contained photographs taken around the city of Pana, Illinois When contacted by Panavision, a maker of motion picture cameras and photographic equipment, Toeppen offered to sell the domain name for $13,000 Panavision declined and brought suit under the Federal Trademark Dilution Act As discussed in an earlier section, the FTDA requires plaintiffs to demonstrate that their mark is “famous” and that the defendant is using a mark in commerce in a fashion that could cause dilution of the mark’s distinctiveness Although Toeppen claimed that his use of the mark was noncommercial, the court held that having offered the domain name for sale indicated that he intended that the domain name itself be a commercial offering In the Intermatic case, Toeppen originally operated a Web page at the intermatic.com address that described a piece of software he claimed to be developing called “Intermatic,” later replacing it with information about Champaign–Urbana, Illinois, the community in which Toeppen lived The Intermatic court held that despite these noncommercial uses, the registration of the domain name itself was dilutive of Intermatic’s mark Anticybersquatting Consumer Protection Act As the problem of cybersqatting grew throughout the 1990s, Congress responded in 1999 by enacting the Anticybersquatting Consumer Protection Act (ACPA), which amended the Lanham Act to include protections specific to Internet domain names One change from past practice under the Federal Trademark Dilution Act, however, was the ACPA’s removal of the requirement that the mark be used in commerce This greatly expanded plaintiffs’ ability to take control over domain names that had merely been registered but were not actually in use The ACPA states that cybersquatting occurs when the person registering a domain name containing a trademark “has a bad faith intent to profit from that mark” and “registers, traffics in, or uses” a domain name that is “identical or confusingly similar to or dilutive of that mark.” The act ... 36 3 TICKET PRICE TICKET TYPE KIDS SENIORS ADULT MAT ADULTS PRICE 4 .50 5. 00 5. 00 7.00 MOVIE MOVIE ID 10 11 12 13 14 15 16 17 18 19 20 10 0 01 10002 10 0 03 10 004 10 0 05 10 006 10 007 10 008 10 009 10 010 ... Management Trends Glossary Cross References References Further Reading 39 2 39 2 39 2 39 2 39 2 39 3 39 3 39 4 39 4 39 4 39 4 39 4 39 5 39 5 39 5 39 5 39 6 39 6 39 6 39 7 portunities for competitive advantage using information... Manufacturing Execution Systems 38 7 38 8 38 8 38 9 38 9 38 9 38 9 38 9 38 9 38 9 38 9 39 0 39 0 39 0 39 0 39 0 3 91 3 91 3 91 3 91 INTRODUCTION Supply chain management (SCM) attempts to identify the most cost-effective