The registration, use and monetization of domain names constitutes big business. Throughout the last decade, the internet has replaced traditional forms of advertising, including phone books, billboards, direct mailers and even television ads. Because of this, domain name ownership has become the real estate of the Internet, generating substantial returns for savvy registers of choice website addresses.
DOMAIN NAME DISPUTE RESOLUTION
Because of the increasing popularity of the Internet as not only a portal for commerce, but typically the most direct means of marketing and advertising business, companies have realized that having an appropriate domain name that is the same as their company name (or the name of one of their products) can be an extremely valuable part of establishing an Internet presence.
A company wishing to acquire a domain name must apply through one of the various registrars tasked with the ability to disseminate website addresses, and determine if a domain name is already taken by a third party. Such registrars include Network Solutions, GoDaddy and others. When a company finds that the domain name corresponding to their corporate name or product trademark is owned by someone else, the company can either choose a different name or fight to get the domain name back from its current owners.
Typically, there are two forms of dispute when it comes to domain names:
(a) a long standing company having an identifiable trademark/trade name comes to learn that a domain name featuring that trademark/trade name was registered subsequently by a third-party (not affiliated or sponsored by that company, or
(b) a company having an identifiable trademark/trademark having a well known domain name learns that a third party is seeking to trade off on the goodwill of the company by having a similar domain name to divert business to that third-party in bad faith.
In either scenario, it may be appropriate for one of our Miami trademark attorneys to assist in a legal proceeding to either (a) cancel that third-parties’ registration of the domain name, or (b) transfer the third-parties’ domain name to you such that you can control its use.
There are two avenues to seek the foregoing relief, the first is through the Federal Courts under the Lanham Act through the AntiCybersquatting Act of 1999. The second avenue is to seek relief through an arbitration proceeding through the ICANN procedures.
ICANN ARBITRATION PROCEEDINGS
The Internet Corporation of Assigned Names and Numbers (ICANN) is a nonprofit organization that oversees the domain name registration system (which is called the Internet Assigned Numbers Authority, a.k.a. IANA), which has also promulgated rules governing domain name disputes. When anyone registers a domain name, that person is required to submit to binding arbitration in the event of a dispute concerning that domain name, including an allegation of cybersquatting.
In 1999, ICANN adopted and began implementing the Uniform Domain Name Dispute Resolution Policy (also commonly referred to as the “UDRP”), a policy for resolving domain name disputes via international arbitration instead of localized, slow and expensive litigation.The UDRP applies to all top level domain extensions (TLDs), including but not limited to the following:
This implementation was extremely valuable, as domain name squatters are often either located overseas or have their identities hidden such that it is impossible to secure service of process.
An ICANN action (which is essentially an in rem action) can be brought by any person who complains (referred to by ICANN as the “complainant”) that:
- a domain name is identical or confusingly similar to a trademark or service mark in which the complainant has rights
- the domain name owner has no rights or legitimate interests in the domain name, and
- the domain name has been registered and is being used in bad faith.
If all three elements can be established, a trademark owner can file an ICANN proceeding before certain recognized arbitration forums, such as the National Arbitration Forum. If the complainant prevails, the domain name can be transferred or cancelled – depending upon the request of the complainant.
One disadvantage of an ICANN proceeding, in comparison to an anti-cybersquatting lawsuit addressed below, is that financial remedies are unavailable through the ICANN arbitration system. That said, the advantages of quick and relatively swift results often outweigh the inability to seek damages. Plus, once an ICANN proceeding allows for transfer of a domain name, a trademark holder can later seek an action for fees in litigation.
In short, the goal of the UDRP process is to create a streamlined process to resolve disputes over a purportedly improper registration of a domain name. That said, a part who looses an arbitration proceeding through the UDRP protocol in the United States may still bring a suit in Federal Court through the ACPA (addressed below). One important point that if the domain name registrant loses a UDRP arbitration (ie, the domain name is transferred or cancelled), that registrant only has ten days to file a Federal Lawsuit against the purported trademark holder.
OUR ICANN ARBITRATION EXPERIENCE
We have handled numerous ICANN proceedings before the National Arbitration, including the following recent series of successful arbitrations for one of our national clients:
Domain Name at Issue
|MethLabCleanup.Info||1376605||Michael Rowzee||Request Granted, Transfer of Domain name.||April 10, 2011|
|1412301||Utah Crime Scene Cleaners||Request Granted, Transfer of Domain name.||Nov. 29, 2011|
|TexasMethLabCleanup.com||1443888||Kirt Flippin d/b/a Texas Decon||Request Granted, Transfer of Domain name.||June 15, 2012|
|MethLabCleanup.co||1456469||Tony Branch||Request Granted, Transfer of Domain name.||Sept. 12, 2012|
Budgets for such ICANN proceedings can be fixed or often semi-fixed giving you some ability to forecast the litigation costs associated with these proceedings to regain an important domain name tied with your company name or its brand.
THE ANTI-CYBERSQUATTING ACT ROUTE
In response to intense lobbying from trademark owners and famous individuals, Congress passed the Anticybersquatting Consumer Protection Act (ACPA) in November of 1999. This act made it easier for individuals and companies to take over domain names that are confusingly similar to their names or valid trademarks. To do so, however, they must establish that the domain name holder acted in bad faith.
The ACPA primarily protects companies against persons who, in bad faith, register a domain name that is the same or confusingly similar to an existing trademark. The statute the lists the following factors as elements that a court can consider to determine whether the domain name was registered in bad faith.
In summary, the ACPA allows a trademark owner to sue a cybersquatter in Federal Court – due to that cybersequatters improper and unauthorized registration of a domain name that is confusingly similar (or has a likelihood to cause confusion) with the trademark owners’ trade name, mark, slogan or related indicia. Moreover, the ACPA allows not only the relief of obtaining the domain name, but in some cases the ability to obtain money damages. To prevail the trademark owner must prove the following before a Federal Court:
- the domain name registrant had a bad-faith intent to profit from the trademark
- the trademark was distinctive at the time the domain name was first registered
- the domain name is identical or confusingly similar to the trademark, and
- the trademark qualifies for protection under federal trademark laws — that is, the trademark is distinctive and its owner was the first to use the trademark in commerce.
Various defenses exist to a claim under the ACPA, including (a) the trademark is not identical to the domain name in question, (b) the underlying trademark is generic, descriptive or has failed to acquire secondary meaning, (c) that there was no bad faith intent, or (d) the accused cybersquatter demonstrates that he had a reason to register the domain name other than to sell it back to the trademark owner for a profit.
The ACPA allows for a financial recovery of up to $100,000 per domain name, plus costs and attorneys fees.
HOW WE CAN HELP
Our team of Miami trademark attorneys have extensive experience in both ACPA matters, as well as ICANN arbitration disputes. Moreover, we are able to address in our initial consultation the pros and cons of a variety of options to return a domain name to its rightful owner, or alternatively defending against a claim of anti-cybersquatting by an overzealous litigant seeking to improperly expand its trademark rights.
Four options that we discuss with clients when addressing a potential domain name dispute include the following:
- Do Nothing: While this is the easiest and cheapest course of action, there are often certain reasons why inaction is the best reaction. While rarely the case, a potential registrant of a domain name may not realize that the registration may soon expire. Sometimes it is better to not alert the registrant of this fact, and instead seek a timed acquisition of the domain name. This said, inaction in other scenarios risks damaging the repute and/or goodwill of a trademark, loss of rights to a valuable mark, and ultimately rewarding an infringer’s bad faith actions.
- Draft and Serve a Formal Demand Letter: As inaction is likely not the best plan, one initial option available to a trademark holder is to prepare and serve a formal demand letter often referred to as a “cease and desist letter.” These cease and desist letters help frame the issue for a potentially unsuspecting and perhaps unsophisticated domain name registrant. Such correspondence increases its effectiveness when served on law firm stationary, as it demonstrates to a domain name registrant that these matters were important enough to seek the counsel of an attorney. Points raised in such cease and desist letters includes identification of the trademark, addressing how a registrant is infringing on that trademark through use and registration of the domain, making a formal demand of transferring the domain name, and if action is not taken that a claim can be made, which may include imposition of damages.
- Entering into a License Agreement with the Registrant: In some scenarios, it may be advantageous to have the domain name registrant pay for the use of the implicated trademark or trade name. While one disadvantage is the need to police the use of the trademark, this may allow for some monetary benefits for use of your valuable name.
Our team of Miami trademark attorneys are able to look at the big picture, examine the merits of a potential claim, evaluate prospective defenses – and forecast scenarios. We are also able to help take the guess workout of domain name disputes, analyze different options for resolution, and empowering our clients as what roadmap makes best sense for their companies and budgets.