Your Arsenal in the Fight Against Domain Name Pirates
February, 2006
In the beginning of the Internet age, even large corporations, such as the Gateway Corporation, fell prey to domain name pirates that would purchase and register domain names that were identical or similar to the trademarks owned by these consumer giants. For example, in the late 1990’s, a tech savvy pornographer, with no affiliation to Gateway, purchased the domain name gateway2000.com from Network Solutions, Inc., which at that time, was the only company authorized to register domain names ending in .com, .net or .org. Using Gateway’s popular trade name, the pornographer lured the unsuspecting public to his web site where he marketed his obscene material. As e-commerce law was still in its infancy, rather than rely on its uncertain legal position to prevent harm to its reputation, Gateway paid the pornographer $100,000 to discontinue his use of the web site, thereby providing a windfall to the pornographer.
Other domain name pirates, with less entrepreneurial aspirations, merely purchased domain names containing well-established brand names and held them hostage. An unsuspecting company would seek to register a domain name containing its trademark only to find that the name, along with countless variations, were previously registered by a party with no affiliation to the owner of the trademark. The pirate would then contact the company seeking to sell the domain name for exorbitant prices. See Ford Motor Co. v. Catalanotte, 342 F.3d 543 (6th Cir. 2003)(defendant registered and offered to sell to Ford the domain name fordworld.com).
Both the public and the nation’s legislators eventually recognized that the practice of cybersquatting works only to cause confusion in the marketplace and destroy the value of legitimate brand names, while enriching cyber pirates that can claim no legitimate interest to the domain names purchased. Congress combated this problem by amending the Lanham Act in enacting the Anti-Cybersquatting Consumer Protection Act of 1999 (“ACPA”),
15 U.S.C. § 1125.
The ACPA imposes civil liability upon those engaging in domain name piracy of others’ trademarks. The following elements must be proved by the plaintiff to maintain a cause of action under the ACPA: 1) The defendant has registered, trafficked in or used a domain name; 2) which is identical to or confusingly similar to a trademark owned by the plaintiff; 3) the trademark was distinctive at the time of the defendant’s registration of the domain name; and 4) the defendant has committed the acts with a bad faith intent to profit from the plaintiff’s trademark. 15 U.S.C. § 1125(c).1 Upon succeeding on a claim against a cybersquatter, a plaintiff can force the defendant to transfer the domain name registration to the plaintiff, as well as elect to recover either actual damages or statutory damages that can range between $1,000 and $100,000 per infringing domain name. Upon showing that the defendant acted with malice, the plaintiff is also entitled to recover attorneys fees and costs from the cyber squatter.
Despite Congress’s progressive attempt to prevent cybersquatting, victims of cybersquatting still may find themselves in a quagmire upon discovering that their trademarks have been pirated. For example, several months ago, Clausen Miller PC (“CM”) was contacted by a web developer that was hired to design a website on behalf of an artist. When the developer attempted to register the artist’s domain name, he discovered that numerous variations of the artist’s name had already been registered by individuals that could not claim any legitimate interest in the artist’s mark. The artist shuddered at the thought of expending considerable resources in prosecuting a federal trademark infringement case against the pirates. Therefore, CM offered to represent the artist in pursuing his rights under the Uniform Domain Name Dispute Resolution Policy (“UDRP”), a simple, quick, non-judicial and cost-effective method of resolving domain name disputes.
The Internet Corporation for Assigned Names and Numbers (“ICANN”) is the officially recognized organization charged with administrating the Internet name and address system that developed the UDRP. By 2000, all global top level domain name registrars had adopted the UDRP and require their customers to abide by the arbitration terms of the UDRP. Under the UDRP, a complainant can challenge a respondent’s registration of a domain name and the dispute will be decided by an arbitration panel. A complainant can compel the transfer or cancellation of a domain name if it proves to the arbitration panel: 1) that the challenged domain name is identical or confusingly similar to a trademark or service mark in which the complainant has rights; 2) that the respondent (domain name holder) has no rights or legitimate interest in respect of the domain name; and 3) that the domain name has been registered and is being used in bad faith. The sole remedy available to a successful complainant is the transfer or cancellation of the domain name.
Dispute resolution under the UDRP can be achieved within several months, thereby conserving attorneys fees that would be otherwise expended in a judicial proceeding which may last several years. The arbitration proceedings under the UDRP lack the formalized evidentiary rules which govern a court of law, allowing for a more efficient and streamlined adjudication process. However, neither party is foreclosed from seeking relief of the arbitrator’s decision in a court of law. If an unsuccessful respondent chooses to challenge a UDRP decision transferring a domain name to the complainant, the complainant will be forced to expend additional attorneys fees in defending its rights in court. Nevertheless, in situations where the cyber pirate clearly has no viable defense against a cybersquatting complaint, as was the case with the above-referenced scenario, the UDRP offers a cost efficient method of preventing the continued exploitation of a trademark holder’s rights.
As the above matter demonstrates, because clients have different needs and varying resources, CM is committed to fully evaluating every client’s needs and tailoring its services to fit an appropriate budget. •
Footnotes
1 Federal law also creates a cause of action against cyber pirates that engage in the bad faith registration of domain names that are dilutive of famous trademarks or domain names that are identical or confusingly similar to a personal name. 15 U.S.C. § 1125; 15 U.S.C. § 1129.
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