United States: Trademark Protection In The Digital Age: Protecting Trademarks From Cybersquatting

This article is excerpted from Guide for In-House Counsel: Practical Resource to Cutting-Edge Issues published by the ABA Business Law Section in 2019.

With the growing use and popularity of the internet, more and more people and businesses have made the leap into cyberspace to sell, advertise, or promote their company, name, products, or services. With this growing evolution, the inevitable clash over domain names has also grown.

What exactly is a domain name? Simply put, a domain name is essentially the user-friendly form of the internet equivalent to a telephone number or street address. It is the address of a person or organization on the internet where other people can find them online, and it can also become the online identity of that person or organization. For example, many businesses will register their company name as their domain name. A domain name can function as a trademark if it is used to identify goods or services and is not used simply as a website address. Although providing a staggering global market forum, the internet also provides fertile ground for trademark infringers. One of the most common avenues for infringement on the web is that traveled by "cybersquatters."

A cybersquatter, sometimes referred to as a cyberpirate, is a person or entity that engages in the abusive registration and use of trademarks as domain names, commonly for the purpose of selling the domain name back to the trademark owner or to attract web traffic to unrelated commercial offers. To provide trademark owners with a remedy and a means by which to evict cybersquatters, two alternatives developed: the Anti-Cybersquatting Consumer Protection Act (ACPA), a federal statute providing the basis for a court action against cybersquatters, and the Uniform Domain Name Dispute Resolution Policy (UDRP or Policy), which provides for an administrative proceeding for the resolution of domain name disputes, much like an arbitration.

The ACPA was enacted in 1999 to redress cybersquatting by allowing trademark owners to bring a civil action against a cybersquatter if that person has a bad-faith intent to profit from the mark and registers, traffics in, or uses a domain name that in the case of a distinctive mark, is identical or confusingly similar to that mark, or in the case of a famous mark, is identical or confusingly similar to, or dilutive of, that mark.  Remedies include statutory damages between $1,000 and $100,000 per domain for which the cybersquatter is found liable, actual damages, the transfer or cancellation of the domain name, and/or attorneys' fees.

The UDRP is a less costly and more efficient alternative to the court system.

Consistent with the ACPA, under the UDRP, the trademark owner must prove that: the allegedly infringing domain name is identical or confusingly similar to a trademark or service mark in which the complainant has rights; the alleged infringer has no rights or legitimate interests in the domain name; and the allegedly infringing domain name has been registered and is being used in bad faith.

Marks in which the complainant has rights includes marks that are federally registered, as well as unregistered marks that have acquired common-law rights. Common-law rights are acquired when the mark becomes a source indicator in commerce through its usage, promotion, marketing, and advertising. For example, it has been accepted in a succession of UDRP decisions that authors and performers may have trademark rights in the names by which they have become well-known. Performers can establish trademark rights either by showing that they have registered their names as marks for certain goods or services, or because, through deployment of the names as source indicators in commerce, they have unregistered or 'common law' rights to protection against misleading use.

By way of illustration, the recording artist professionally known as Sade was successful in obtaining transfer of the domain "sade.com," despite the fact that she had not registered her mark SADE. However, she sufficiently demonstrated her usage of the stage name "Sade" as a mark to distinguish her goods and services as a singer, songwriter, performer, and recording artist, and the establishment of substantial goodwill therein, based upon evidence of her sales of records, CDs, clothing, and other merchandise using the mark SADE, as well as live tours, performances, advertising, and promotion.

Once the complainant has established its rights in the mark, it must establish that the disputed domain name is "identical or confusingly similar" to its mark. Not too surprisingly, where the domain name is identical to the complainant's mark, the requirement of identity or confusing similarity as required by the UDRP has been found satisfied. The addition of ".com" or some other gTLD suffix is not a distinguishing difference where the domain name is otherwise identical to the complainant's mark.

Determining "confusing similarity" is decided on a case-by-case basis. One particular scenario that continues to confound the UDRP Panels is the appendage of the term "-sucks" to another's trademark. In one decision that discusses at length the various approaches taken to analyze this issue, the UDRP Panel transferred to the complainant, a company best-known for its sale of alcoholic beverages under the trademark "Guinness," the disputed domain names: "guinness-really-sucks.com," "guinness-really-really-sucks.com," "guinness-beer-really-sucks.com," and "guinness-beer-really-really-sucks.com" in addition to a host of other similar variations.

Another common scenario involving confusing similarity involves a form of cybersquatting known as "typosquatting," where the registered domain is a misspelling of a trademark. In one case involving a notorious typosquatter, Disney Enterprises successfully obtained transfer of a myriad of domains that infringed on its famous DISNEY mark by fully incorporating the DISNEY mark, coupled with slight misspellings of other DISNEY-formative marks, like "Walt Disney World" (for example, the disputed domain names included "disneywold.com," "disneywolrd.com," and "disneyworl.com"). When internet users mistakenly entered the disputed domains into their web browsers, pop-up windows appeared containing third-party websites and advertisements for goods and services like music, games, credit approval, and casinos. When these windows were closed, additional pop-up windows would appear, containing still more third-party advertisements or websites in a continuous cycle, despite the fact that Disney was not affiliated with, nor had given permission to use its trademarks to, any of the websites appearing in the perpetual stream of pop-ups (a tactic which, as an aside, is curiously known as mousetrapping, but having no affiliation with or relation to Disney's icon Mickey Mouse).

Any number of factors has been held to establish a domain name registrant's lack of rights or a legitimate interest in the disputed domain name. For example, one common factor is where it may be inferred or established that the motive for registering the domain name was to sell it at auction on the internet, without any other apparent right or interest in the domain.

Pursuant to the UDRP, a domain name registrant can establish its rights or legitimate interest in the disputed domain name by demonstrating any of the following:

  • Registrant used, or made demonstrable preparations to use, the domain in connection with a bona fide offering of goods or services prior to the registrant's receipt of notice of the dispute. For example, the owner of the domain and mark "sexplanet.com" lost its dispute over the domain name "sexplanets.com," despite its claim that it was the first and most popular adult website for the download of live, streaming video, where the registrant of "sexplanets.com" demonstrated that the domain was registered without prior knowledge of the complainant's domain name and it was immediately used to further its business plan of providing bona-fide free hosting services to webmasters of adult websites in exchange for advertising revenue generated from banners displayed on the adult sites hosted. In contrast, recording artist and performer Peter Frampton successfully obtained transfer of the domain "peterframpton.com" where evidence clearly demonstrated that the registrant had deliberately chosen to include Peter Frampton's well-known trademarked name with the goal of commercially benefitting itself from the inevitable user confusion that would result from their concurrent usage of the domain name and Peter Frampton's mark. In particular, the registrant, who coincidentally shared the name "Frampton," clearly sought to capitalize on Peter Frampton's fame and celebrity reputation where he used the domain to post a website offering goods directly competitive with Peter Frampton in the music industry. Such use was deemed to exploit user confusion and does not constitute bona fide commercial use.
  • Registrant has been commonly known by the domain name, even if it has acquired no trademark rights. For example, the musician Sting almost got stung by the registrant of the domain "sting.com" where the registrant argued his eight year use of the nickname "Sting", most recently on the internet in connection with global online gaming services. However, the UDRP Panel was not persuaded that the registrant had established that he has been "commonly known" by the domain as the UDRP contemplates; rather, it determined that the word "sting" is not distinctive, most likely used by numerous other people in cyberspace and, in practice, merely provided the registrant with anonymity rather than a name by which he was commonly known. Unfortunately for the musician Sting, these findings were not sufficient to prevent denial of his complaint where the Panel accepted that he was world famous under the name "Sting," but had not demonstrated his rights to it as an unregistered trademark or service mark, given that the personal name in this case is also a common word in the English language with a variation of meanings.
  • Registrant is making a legitimate noncommercial or fair use of the domain name without intent for commercial gain to misleadingly divert consumers or to tarnish the trademark at issue. Examples include parody sites, fan sites, and sites dedicated to criticism or commentary. Recording artist Pat Benatar, for example, was denied transfer of the domain name "patbenatar.com" where the registrant had created a fan website that provided a wide range of information concerning Pat Benatar, including detailed band history, chronology of her albums, and past and future appearances. The website contained clear disclaimers that it was strictly operated as a fan site and was unauthorized by, had no affiliation with, and was not endorsed by, Pat Benatar, her band, or agents. Equally important, there was no evidence that the registrant obtained any commercial benefit from the website, which may well have led to a different result. In a more extreme case, Eddie Van Halen of legendary rock fame was denied transfer of the domain "edwardvanhalen.com" from a fan who registered the domain with the alleged intent of putting up a fan site, even though the site never had any content added to it. In contrast, the law firm Hunton & Williams successfully obtained transfer of the domains "huntonandwilliams.com" and "huntonwilliams.com" where the registrant made a failed attempt at a parody website by posting content that was found to merely disparage the firm as greedy, parasitical, and unethical, including the text "PARASITES—no soul . . . no conscience . . . no spine . . . NO PROBLEM!!!" against a background of human skulls, together with a myriad of definitions of the term "parasite" and of advertised products, as opposed to imitating any distinctive style of the firm for comic effect or in ridicule.

Under the UDRP, both the registration and use of the disputed domain must be in bad faith. Evidence includes:

  • registration primarily for the purpose of selling, renting, or otherwise transferring it to the trademark owner or its competitor (e.g., in a proceeding initiated by the famous actress Julia Roberts, she successfully obtained transfer of "juliaroberts.com" where the registrant had registered and used the domain in bad faith by, among other things, putting it up for eBay auction).
  • registration to prevent the trademark owner from reflecting the mark in a corresponding domain name, provided that the registrant has engaged in a pattern of such conduct (e.g., also in the "juliaroberts.com" case, the registrant had admittedly registered other domain names, including several famous movie and sports stars).
  • registration primarily for disrupting a competitor's business (e.g., Ticketmaster successfully obtained transfer of the domains "ticketmasters.com," "wwwticketsmaster.com," and "ticketsmasters.com" where the registrant had deliberately used various misspelling of its well-known mark (typosquatting) to attract internet users who mistype or misspell Ticketmaster's name and, instead, were redirected to registrant's competing website).
  • by using the domain, the registrant has intentionally attempted to attract, for commercial gain, internet users to its website, by creating a likelihood of confusion with the complainant's mark as to the source, sponsorship, affiliation, or endorsement of its website or location or of a product or service on its website or location (e.g., the registrant's automatic hyperlink of the domain to a competing website or a pornographic site, such as in a case disputing the domain name "bodacious-tatas.com," where Tata Sons Limited successfully obtained cancellation of the domain, which directed to a pornographic website. In so doing, registrant was held to have registered and used the domain in bad faith where, among other things, it had unlawfully placed the complainant's trademarked "TATA" in the meta-tags of its domain address so that when internet users performed an internet search using the "TATA" trademark in any internet search engine (e.g., Google), the search results would include the registrant's unauthorized pornographic website which, the UDRP Panel held, could induce a potential customer or client of Tata Sons into believing that the porn site was licensed, authorized, or owned by Tata Sons).

Originally published by ABA Business Law Today

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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