Our law firm receives many calls from individuals and businesses that are being threatened with an Anti-Cyber Squatting Consumer Protection Act claim because they registered a domain name identical or similar to a trademark held by someone else. Inevitably, we hear the words “Network Solutions allowed me to register the domain, so there’s no way anyone can tell I did something wrong.”
Of course, Network Solutions and the other registrars do little to ensure that a person registering a domain has the legal right to do so. In fact, all registrars do is make every person who buys a domain claim that they are not interfering with someone else’s legitimate trademark rights. Just because you can register a domain doesn’t mean you won’t be sued for doing so under federal law.
The ACPA is a federal law that went into effect in November 1999 to prevent the registration of domain names in bad faith. This new domain name dispute law is intended to give trademark and service mark owners legal recourse against defendants who obtain domain names “in bad faith” that are identical or confusingly similar to a trademark or brand of service. To win a cybersquatting case, the plaintiff must prove that the defendant has a bad faith intent to profit from the mark that is identical to, or confusingly similar to, or dilutes the plaintiff’s mark. The key element is that the plaintiff must prove that the defendant has “bad faith intent to benefit from the mark.” What this means is that if the defendant simply registers the domain and does nothing with it commercially, the plaintiff will have a difficult, if not impossible, time to prove bad faith. Typically, the intent to make a profit is shown by using the domain as a commercial site that sells goods or services. For an alleged domain infringer who does not develop a website, a bad faith profit intent is often demonstrated when the defendant attempts to sell the domain name to the trademark holder. Any transfer of the domain for consideration will normally satisfy the benefit test.
Another bad faith factor is if the registrant provides false contact information to the registrar or fails to maintain correct contact information in the future. Because of this bad faith factor, it is important that all domain name owners regularly check their domain registrations against the Who’s database to determine if their contact information is correct.
If you decide to file an ACPA lawsuit, you have a variety of remedies available to you under the law. The most important is the potential loss or cancellation of the domain name or the transfer of the domain name to the plaintiff. In lieu of actual damages, the plaintiff may elect statutory damages and has discretion to award between $1,000 and $100,000 in damages for bad faith registration. Attorney fees are also available for a bad faith registration. Sometimes the domain owner cannot be located or served with a Summons and Complaint because they provided false information or are not located within the United States. In these cases, a trademark owner may bring an “in rem” action against the domain name in the judicial district in which the domain name registrar, domain name registry, or other naming authority is located. domain name that registered or assigned the domain name. Money damages are not available in an “In Rem” lawsuit. Typically, the brand owner is more focused on getting the domain name transferred to them.
A recent case from the Sixth Circuit Court of Appeals, Interactive Products, Corporation v. A2Z Mobile Office, No. 01-3590 (6th Cir., April 10, 2003), was not good news for trademark holders in our jurisdiction. The Court held that the “post-domain path of a URL (the subfile directory)…does not normally signify source (of goods or services). The post-domain path simply shows how the website data is organized within the files from the host computer”. Consequently, the Sixth Circuit held that the presence of the plaintiff’s trademark in the path of a competitor’s domain name was unlikely to cause consumer confusion. Interestingly, the Court reached this result despite the fact that the defendant, A2Z, was selling competing products. It should be noted that the Court did not hold that the use of someone else’s trademark in the top-level domain, on the website itself, or in the meta tags is exempt from ACPA liability.
Each ACPA case revolves around the particular facts presented. It should also be noted that the Interactive Products plaintiff did not submit any evidence that the presence of its trademark in the post-domain path caused actual confusion or was likely to cause consumer confusion. If such evidence existed and was presented, the result might have been different. The ACPA mark is an important weapon for owners in protecting their intellectual property in the online world. If you don’t protect your trademarks, you may lose the rights to those trademarks entirely. Also, if you don’t protect your brands, who will?