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Posts Tagged ‘Domain Names’

There’s an old comedy bit where the comic offers to teach you “everything you’re going to remember from college, ten years after graduation.”  The crash course is offered at a hefty price, but much less than four years of actual college tuition.  There’s a little of that in what we’re going to discuss here today, except for the hefty price of course.

Once you absorb all the knowledge in this article, people will come from miles around to meet you and marvel at your Giant Trademark Brain. And the Law of Averages says that some percentage of them will buy your product, too.

In more than 20 years of advising business owners in the area of trademark law, I’ve noticed many little tidbits of knowledge that I find myself passing along to client after client.  These are things that most business owners and marketing people either don’t know at all or have enduring misunderstandings about. 

Each of these nuggets of information, standing by itself, is not very impressive – but knowing all of them will really increase your comprehension of the trademark process.  For that reason, I have decided to present them all in one place.  So gird your loins and get ready for a crash course in trademark knowledge.

Thing 1:  Trademark rights are created by use of the mark on your goods or services.  Registration of your mark is an important way to increase and extend those rights.

Thing 2:  There is no functional difference between “trademarks” and “service marks” – trademarks identify goods (for example, BUDWEISER® for beer) and service marks identify… that’s right, services (e.g., HOLIDAY INN® for hotel services.)  So for the rest of this post, let’s simplify things by calling them all trademarks, or just marks.

Thing 3:  You don’t register a trademark for “everything,” you register it for specifically identified goods and/or services that are spelled out in your application.  The more types of “things” you want to cover, the more you’ll pay in filing fees for the application.

Thing 4:  Give a lot of thought to what goods/services you want to cover before filing your trademark application, because once the application is filed you cannot broaden its coverage (you can only narrow it, by taking things out.)

Thing 5:  New trademark applications literally are filed every minute at the U.S. Patent and Trademark Office.  Once you decide on a mark and goods/services, file your application as soon as possible to minimize the chances that someone else will “beat you to the punch.”

Thing 6:  No, you cannot file a trademark application or keep alive a registration for a mark you have no current intention of using, just to “keep people away from it.”

Thing 7:  The designations TM and SM that you see everywhere really have no official significance.  They are used unofficially, to indicate that the user regards the name as proprietary.

Thing 8:  You may not use the ® symbol with your mark until your mark is actually registered (not just filed.)  After the registration issues, you should always use it at least once on every package, advertisement, marketing piece, etc.

Thing 9:  You should always search a new product name (the earlier the better) before committing to it or using it.  Not doing so is a dare to the Trademark Infringement Gods.

Thing 10:  Because trademark rights arise from use (see Thing 1 above), trademark searching is an art and not a science.  When searching for potential users of conflicting marks in the vast universe of information out there, you have to choose some logical place to stop.  Always remember that, for these reasons, no trademark search is perfect – just the best search reasonably feasible at the time it’s conducted.

Thing 11:  Minor differences in spelling and inventive spellings won’t make an otherwise infringing mark “safe” to use or register.

Thing 12:  In a similar vein, you probably attach a much greater significance to small product differences within your industry than the general public (or a judge) will.  This means that when comparing products to determine whether you infringe someone else’s mark, the judge is not going to be swayed by the argument that “no one could be confused because the products are totally different – theirs is a 6-pin device and ours is an 8-pin device!”

Thing 13:  When choosing a new name, remember that the more closely it describes the product (or some feature or function of it), the more likely you are to have problems with availability and/or protection.  I could give you a half hour on why, but just trust me on this.  You’re much better off picking a name that is not descriptive.

Thing 14:  Word mark registrations are inherently more flexible than logo/design marks, because use of a registered word mark as a part of your logo is covered by the registration.  The reverse is not true.

Thing 15:  Because of Thing 14, when first starting down the registration path (and anytime cost/budget is a large factor), it’s usually advisable to register the word form of your mark first and register the logo version when finances allow.

Thing 16:  It can take many months for an application to mature into a trademark registration, but there’s no reason to hold off on using the mark in the meantime.  Quite the opposite, in fact – usually you’re better off starting use as soon as possible.

Thing 17:  The time to think about whether your new name will actually be available for you to use is as soon as possible.  Yesterday, if possible.  A month ago, better yet.  Leaving that issue until the last minute invites bad decision-making and disaster.

Thing 18:  Most trademark infringement disputes are resolved through negotiation before any suit is filed, usually with the “junior user” being provided some time period to shift over to a new name.  But don’t take this as an excuse to go forward with a name you know is questionable, because the first sentence often doesn’t apply where the infringement appears intentional.  In those cases, the aggrieved party may go straight to court.

Thing 19:  Using or registering your new name as a domain name does not create trademark rights, unless you use that domain name in a trademark-like way on your website. 

Thing 20:  Similarly, merely registering your corporate name with your state’s secretary of state does not create any trademark rights or constitute any type of government approval for you to use the name as a trademark.

Thing 21:  In the trademark world, as elsewhere, what goes around comes around.  Don’t try to nestle up to a competitor by using a similar mark.  You wouldn’t want anyone doing that to you.  Don’t make me be your mom on this – Golden Rule, and all that.

This is not, of course, intended as a complete list.  Hopefully it is helpful, though.  If I get good response on this article, I’ll think up some more bits of important knowledge.  And then, dear reader, together we can venture down the uncertain path of the sequel.

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The first post in this series discussed issues related to finding a band name that is available for your use.  Now we can talk about protecting your band’s name against encroachment by other acts.

So now you’ve found a band name that everyone in and out of the band loves, and it has passed the availability searching test I discussed in the previous post.  How do you create and strengthen your rights in the name, so no one else takes it? 

Rehearsing is great guys, but maybe you should take five and get started on that trademark application for THE EEL RIVER BOYZ.

First, you use the name.  You use it in the band’s promotion and performance.  You create the same types of sites you were searching for earlier, using the band name prominently on your website, on a Facebook page, a Myspace page, and so on.

Next, you register your band name.  You register it as a domain name; you register it on the band name databases; you set up a presence on Sonicbids.  And, most importantly, you register your band name as a trademark and service mark for the goods and services you sell under the name.

Trademark Registration

Before starting down the path towards registration of your band name as a trademark, it’s important to understand that trademarks are not registered for all possible goods and services.  Instead, your trademark wil be registered to cover the specific goods and/or services you identify in your application.

So what do you sell, as a band?  Live entertainment services?  Recorded music?  What about the “merch” you’ll sell bearing the band’s name – shirts, hats, posters, stickers, buttons, jewelry, key chains, shot glasses/beer glasses/coffee mugs?  All of the above?  Depending on your budget, you’ll want to cover as many of these goods and services as possible in your trademark application. 

Coverage for Your Application Means USPTO Filing Fees

I mention your budget because the U.S. Patent and Trademark Office charges filing fees when you file a trademark application.  Those USPTO filing fees are based on how many International Classes of goods and services your claimed goods and services fall into.  The International Classification system categorizes all conceivable goods and services into 45 separate Classes – a very general breakout of what falls within each Class can be found HERE.

USPTO filing fees vary depending upon how idiosyncratic your descriptions of the goods and services need to be.  If you are willing to use fairly generic pre-approved wording for the descriptions (and meet other requirements for your application), you can limit your filing fees to $275 for each International Class your goods and services fall into.  If for some reason accurately describing your goods or services requires more customized wording, the USPTO will charge $325 per Class in filing fees.

In my experience, for most bands the most important services to cover in a trademark application (in order of decreasing importance) are: 

Ÿ  Live entertainment services (which fall into International Class 41);

Ÿ  Recorded music in various formats (which falls into International Class 9); 

Ÿ  Clothing bearing the band’s name and/or logo (which falls into International Class 25); and

Ÿ  Printed goods such as posters, stickers and event programs (which fall into International Class 16).

As you can see, filing fees can add up quickly.  Covering just the above four Classes in your application will amount to $1,100 in filing fees charged by the USPTO.  This means that you’ll want to think carefully about what’s most important to cover in light of your band’s finances.  Perhaps your budget only allows for one or two Classes, in which case I would opt for the first one or two categories above. 

Do You Need an Attorney?

If you hire an attorney to file and prosecute your trademark application, that attorney also will charge separate professional fees for those services.  Why go to that expense, you may ask yourself.

Hiring an attorney who is experienced in the practice of trademark law is not an absolute necessity for the registration of your mark with the USPTO.  But an experienced practitioner knows how to prepare an application and deal with the USPTO examiner in a way that helps ensure that the resulting registration will give you with the broadest rights possible.  Is it worth the money?  You bet it is.

File Right Away

The USPTO will accept your application right away, you don’t need to begin using the band name before you file your application as long as you can assert that you have a bona fide intent to use the name.  In fact, it’s best to file sooner rather than later.  Every day that goes by is a day someone else could file an application that blocks your registration.

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Choosing a new brand name is not as simple as “Do I like it? Okay, let’s go with it!”  Whether it is to be your flagship brand or just a new product or service in your line, there are many factors to consider in choosing a new brand name.  In this post and the others in this series, I walk you through the most important of those steps.

My earlier posts in this series discussed the importance of getting good legal advice, of understanding the function of trademarks, and of deciding whether your marketing plans require exclusivity on the name.   I also have discussed the strategic value of coming up with a list of potential name candidates and of having your name candidates consumer tested and searched for potential conflicts.

My more recent posts discussed the value of filing trademark applications and registering appropriate domain names to reserve your narrowed list of name candidates.  The most recent installment discussed two steps: brand rollout and monitoring the marketplace for infringements.

We now come to the final step on my list: maintaining your trademark and domain name registrations, so that they do not expire or get cancelled. 

Failing to plan ahead for renewals is asking for disaster.

Step 11:  Maintain and Renew Registrations For Your Name

If you have gone to the cost and effort to stake out trademark and domain name registrations for your brand name, it only makes sense that you will want to keep them in place.  These registrations provide you with important safeguards against encroachment by competitors.  You should make concrete plans now, at the time of brand rollout, to take the necessary maintenance steps. 

Trademark Renewal

Unlike some other types of intellectual property protection, trademark rights can last forever provided you make continuous use of your marks and enforce them against infringers.  Trademark registrations also can be perpetual, but you must take the necessary steps to keep those registrations in force.

If you want to keep your U.S. Trademark Registration alive, you must make periodic filings with the USPTO to prove that the mark in question is still in use (and still used in the same form as it was registered.)  If you don’t make these filings, depending on the point in your registration’s life, it will be cancelled automatically or simply expire.  Your trademark practitioner can assist you in making the necessary filings on a timely basis, but ultimately it’s up to you to make certain the mark remains in ongoing use and that the registration is maintained.

Cancellation or expiration of your trademark registration doesn’t mean you lose all rights in your mark.  If the mark has been in continuous use on your product and remains in use, you still will have common law rights.  But the protections you can leverage using common law rights are far inferior to those provided by a U.S. Trademark Registration.  If the U.S. Registration for your mark expires or is cancelled, my best advice is to file a new application to register the mark as soon as possible. 

Domain Name Renewal

As with trademarks, domain name registrations cover a fixed period of time and will eventually “die” if you fail to renew them.  (One important difference is that with domain names, you can determine the length of your registration and pay registration fees accordingly; with trademarks the maintenance and renewal periods are fixed and uniform.)

If you build your brand into a valuable commodity, then the corresponding domain name will be an equally valuable piece of property.  You can bet there will be opportunistic parties waiting around for you to fall asleep at the switch and let your valuable domain registration die.  Indeed, there is an entire industry built around “snatching” expired domain names. 

SOMEBODY needs to keep their eye on the ball.

Make certain SOMEBODY in your organization stays alert to upcoming renewal and maintenance deadlines.

Your Assets, Your Responsibility

You should create within your brand organization a job function responsible for calendaring, tracking and renewing trademark and domain name registrations.  Because these events often take place years in the future, this responsibility should be bestowed on a particular job title, not a particular person.  Individual people may come and go, but job titles (and their responsibilities) remain.

You can in many cases outsource these responsibilities, but I recommend keeping your own calendar of upcoming renewals as well.  Bear in mind that if someone else fails to take the necessary actions, you are the one who will feel the loss of rights.  Any law suit you could bring against your failed “watchman” would be small comfort – money damages are a poor substitute for the value of your lost rights.  Ultimately, these are your assets and you should assume ultimate responsibility for keeping them safely registered.

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Choosing a new brand name is not as simple as “Do I like it? Okay, let’s go with it!”  Whether it is to be your flagship brand or just a new product or service in your line, there are many factors to consider in choosing a new brand name.  In this post and the others in this series, I walk you through the most important of those steps.

My earlier posts in this series discussed the importance of getting good legal advice, of understanding the function of trademarks, and of deciding whether your marketing plans require exclusivity on the name.   I also have discussed the strategic value of coming up with a list of potential name candidates and of having your name candidates consumer tested and searched for potential conflicts

My most recent post discussed the value of filing trademark applications to reserve your narrowed list of name candidates.  The next step goes hand-in-hand with filing trademark applications.

Don't forget to reserve your own little piece of the World Wide Web...

Step 7:  Register Domain Names Covering Your Top Candidates

Just as filing trademark applications help to reserve your list of top name candidates for use on your product or service, registering domain names is an important step because it reserves your top names for Internet use.  In fact, because the cost for registering domain names is so much lower than that for filing trademark applications, you may want to take this step very early in the brand selection process. 

Is Your Domain of Choice Available?

It stands to reason that a consistent and intuitive online presence is an indispensible part of brand-building.  Obviously, for that reason, it is best if you can register [YOUR BRAND NAME].com as your primary domain name. 

It is quite possible, of course, that your preferred domain will not be available because someone else has registered it.  I can’t resist recalling here the satirical TV commercial done by Saturday Night Live, in which a staid and conservative investment firm admits it took its time before venturing an Internet presence, and then had to settle for the only remaining available domain name: “clownpenis.fart.”

Unlike SNL’s fictitious investment firm, you have some choices.

First, given the importance of a good and intuitive domain name, it’s entirely possible that at this stage of proceedings the unavailability of your top domain name choice may be a reason to scrap the brand candidate in question and move on to other candidates.  If so, problem solved.

If you want to stick with the name candidate, you can attempt to purchase the domain from whomever registered it.  Obviously the price for the purchase of such a domain (assuming the domain registrant is willing to sell) can vary wildly, depending on what use has been made of the domain.  You probably will want to employ an attorney experienced in these matters to approach the domain registrant on your behalf, negotiate the purchase, and take care of the details of the assignment.

Another option is to choose a primary domain that adds other intuitive wording, for example [YOUR BRAND NAME]chocolates.com – assuming, of course, that your product is chocolates.  Even if your original choice was available, you may want to register this and similar domains and redirect them to your primary domain site. 

How Much Territory?

This raises the important strategic issue of how much domain “territory” to stake out around your primary domain.  Registering similar and related domain names allows you to redirect to your main site anyone who mistakenly or intentionally navigates to the different domains.  It also allows you to keep others from “cozying up” to your brand, online. 

In this spirit, it’s rather common for companies to register (if available) the corresponding top-level domains – the .net, .org, .biz, .info domain names corresponding to their brand names.  Some companies also register misspellings of their key domain names, in order to reel in web surfers who dropped out of the spelling bees early as children.  There’s even a misspelled domain name generator available online, to make this process easier.

Some companies even seek to control brand image by registering corresponding domains that suggest negative or critical comment on the brand in question.  These include so-called “sucks” domains (i.e., [YOUR BRAND NAME]sucks.com).  Obviously you can’t think of every possible permutation here, and even if you could you wouldn’t be able to register them all.

In the end, the amount of territory you stake out will probably be determined by a number of factors.  These factors no doubt will include a) your budget, b) the number of name candidates on your “short list,” c) the level of online exposure you envision for the brand, and d) your sensitivity to third party encroachment and criticism.

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My previous two articles in this series have dealt with proceedings by trademark owners against cybersquatters under the Anticybersquatting Consumer Protection Act, or “ACPA.”  The ACPA has been inserted into the Lanham Act, the U.S. federal trademark statute.  As a result, successful plaintiffs under the ACPA can select from a range of remedies available under the Lanham Act. 

Lanham Act remedies, however, often are not the most efficient way to combat cybersquatting.  As a result, we now will discuss an alternate approach offered by the Internet Corporation for Assigned Names and Numbers, or “ICANN.”

Take advantage of the UDRP alternative and you'll be "master of your domain" again in no time. Wait, what?

UDRP Alternative

ICANN is the organization that governs the assignment of domain names by the individual registrars.  ICANN offers what often is a less expensive and more efficient – if narrower – remedy against cybersquatters.  This approach is called the Uniform Domain-Name Dispute-Resolution Policy, or “UDRP.” 

The current rules governing UDRP proceedings are published at the ICANN site.  A new set of rules have been approved and will take effect for UDRP proceedings filed on or after March 1, 2010. 

The UDRP currently applies to all .com, .net, .org, .biz, .info, .coop, .museum, .coop, .aero and .name top-level domains, and some country code top-level domains.  No one can register any domain name under one of these top-level domains, regardless of the registrar, without agreeing to be bound by the UDRP.

UDRP procedures provide disputants with a cheaper and quicker arbitration proceeding rather than a court proceeding.  Under the UDRP policy, the domain name registrar (not the cybersquatter) is required to transfer the domain name to the trademark owner, if the complaining trademark owner prevails.

UDRP Procedures

UDRP cases are heard by arbitration panels supplied by UDRP “providers,” organizations approved by ICANN for that purpose.  The complaining trademark owner selects the provider. 

The arbitration panel can include one or three members – unless one of the parties requests a three-member panel, the panel will comprise only one member.  A three-member panel is more expensive, but may be worth the cost as the parties get to have a say in the members of a three-member panel.

In order to prevail, the complaining trademark owner must demonstrate these facts:

1) The complainant has established trademark rights in the claimed mark;

2) The domain name is identical or so similar to the complainant’s trademark as to cause confusion;

3) The alleged cybersquatter has no legitimate interest in the domain name, and

4) The alleged cybersquatter registered the domain name in “bad faith.”

In a UDRP proceeding, a panel will consider several non-exclusive factors to assess bad faith, such as:

a)  Whether the domain name owner registered the domain primarily for the purpose of selling, renting, or otherwise transferring it to the complaining trademark owner;

b)  Whether the domain name owner registered the domain name to prevent the trademark owner from using the mark in a corresponding domain name, if the domain owner has engaged in a pattern of such conduct; and

c)  Whether the domain name owner registered the domain primarily for the purpose of disrupting the business of a competitor; or

d)  Whether by using the domain name, the domain owner has intentionally attempted to attract, for commercial gain, internet users to the registrant’s website, by creating a likelihood of confusion with the trademark owner’s mark.

Results and Remedies

The UDRP need not be the final stop for the complaining trademark owner.  If he is unsuccessful in his UDRP arbitration, he is not precluded from bringing a federal law suit against the alleged cybersquatter under the ACPA. 

On the other hand, if the alleged cybersquatter loses in the UDRP proceeding, she has ten days to bring suit if she wants to prevent the domain name registrar from transferring the domain name.  Upon receiving notice that the losing domain name holder has filed suit, the registrar will take no further action until it receives notice that the suit was settled or decided.

The UDRP provides a quick and effective remedy against cybersquatters, with decisions generally rendered within about two months.  One limitation of the UDRP approach is that it does not provide for monetary damages, attorneys fees or costs – only the transfer or cancellation of the domain name registration.  In many cases, however, that may be the most important remedy for the trademark owner. 

In any event, many trademark owners prefer to invoke the UDRP procedure, which usually is significantly less expensive than a federal law suit under the ACPA.

PHOTO COURTESY OF FLICKR USER LANUIOP, UNDER THIS CREATIVE COMMONS LICENSE.

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My last article discussed cybersquatting, and the remedies available in U.S. federal court under the Anticybersquatting Consumer Protection Act, or ACPA.  Here, we will consider what you must be able to demonstrate in order to win a case brought under the ACPA. 

Be ready to make these points when you get to court. And don't wear that blouse.

In the previous article I pointed out that the ACPA defines cybersquatting (which the statute, a part of the Lanham Act, refers to as “cyberpiracy”) as “registering, trafficking in, or using” a domain name that is identical or confusingly similar to another party’s distinctive trademark, “with a bad faith intent to profit from that mark.”  If the complaining party’s trademark is deemed a “famous” mark under the law, cybersquatting also occurs where the domain name would “dilute” the famous mark by tarnishing or blurring the public’s perception it. 

So if you believe your trademark is being cybersquatted, this definition sets up several hurdles for you to clear in order to show an ACPA violation.  Let’s think through them, in order of importance.

Bad Faith Intent

 Most importantly, you must be able show that the defendant acted with “a bad faith intent to profit” from your mark.  But how do you demonstrate that the defendant had such a bad faith intent?  As you might guess, cybersquatters rarely cooperate by admitting that fact.  

The ACPA, anticipating this, provides a number of circumstances that will be taken as evidence of a bad faith intent: 

Ÿ  Where the domain has not been used for a bona fide offering of goods or services, and the defendant offers to sell it to the trademark owner for a profit.  (Many cybersquatters try to avoid this by setting up a site under the domain that features some relatively generic content or links.) 

Ÿ  Where the defendant provided false contact information when registering the domain, or thereafter has failed to maintain correct contact information with the registrar. 

Ÿ  Where the defendant has registered a number of domain names that are identical or confusingly similar to the marks of other parties.  Or, 

Ÿ  Where the defendant intended to divert consumers from the trademark owner’s website to a site that harms the good will represented by the mark (whether for commercial gain, or in order to tarnish or disparage the mark.) 

This demonstration that the defendant operated under a bad faith intent to profit from your trademark is critical.  You won’t win an ACPA case unless you can make that showing.

 Distinctive Trademark

 The next important showing you must make as an ACPA plaintiff (admittedly, some might say it is most important) is that your trademark is distinctive.  The ACPA says that your mark must be “distinctive at the time of registration of the [offending] domain name.”  It specifically includes personal names, provided they are distinctive of your goods. 

Distinctiveness, in trademark terms, means that the mark is capable of identifying your goods or services, and enables consumers to distinguish them from those of your competitors.  If your mark is highly descriptive of your products, or if it is a surname, or if it is used by others in your field, then it probably will not pass the distinctiveness test. 

Bear in mind that your mark need not necessarily be registered to be protected under the ACPA.  Unregistered marks will be protected, as long as they are distinctive.

In addition to being an important threshold requirement in and of itself, the distinctiveness of your mark also is a factor in the “bad faith intent” determination.  The ACPA also provides some factors, all of which bear upon the distinctiveness of the plaintiff’s mark, that tend to show an absence of bad faith intent: 

Ÿ  Where the defendant has trademark rights of her own in the mark; and 

Ÿ  Where the trademark is the personal name of the defendant, or a name commonly used to identify him. 

(The ACPA also makes special provisions to prevent the dilution of so-called “famous” trademarks by cybersquatters.  For the sake of brevity here, I will leave consideration of that aspect for a later article on the topic of trademark dilution.) 

Registering, Trafficking In, or Using

 It should be a fairly straightforward matter to demonstrate that the defendant has registered, trafficked in, or used the domain name in question.  The important thing to remember here is that the bad faith intent mentioned above needn’t have been present at the time the defendant registered the domain name.  It can arise later, at any point when he is using the domain in connection with a website, or when she is “trafficking in” (i.e., offering to sell) the domain. 

So even if you originally registered the domain in good faith, you can become a cybersquatter if your later use or your attempt to sell the domain crosses the boundary into bad faith intent to profit.  The same is true if your use of the domain later crosses that boundary. 

The ACPA also carefully defines “trafficking in” as including (without limitation) transactions such as “sales, purchases, loans, pledges, licenses, exchanges of currency, and any other transfer for consideration or receipt in exchange for consideration.” 

As discussed in the previous article, the ACPA provides a wide range of remedies.  Unless you can satisfy these three requirements, however – bad faith intent, distinctiveness of your mark, and registering/trafficking/using – your defendant will not satisfy the ACPA definition of a cybersquatter, and your law suit will fail.  The proofs necessary to elicit actual or statutory damages are a separate aspect of the suit, not considered here but good fodder for another article if anyone expresses interest.

My next article will cover a popular alternative to the ACPA approach: proceeding through arbitration under what are called the Uniform Domain-Name Dispute-Resolution Policy, commonly referred to as the “UDRP” approach.  Stay tuned!

PHOTO COURTESY OF FLICKR USER LANUIOP, UNDER THIS CREATIVE COMMONS LICENSE.

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So, you’re ready to take your business onto the Internet, and the most sensible way to do that is to register your well-known trademark as a domain name.  You try to do so, but learn that another party already has registered your trademark as a domain name.  Your brand may have been cybersquatted.  What are your options?

Jolly Roger

By the time you see the flags, it may be too late - cyberpirates have already made off with your valuable trademark.

“Cybersquatting” is a term that was coined to describe the bad faith registration and use of another party’s trademark as a domain name, with the intent to profit somehow from the good will of that trademark.  The term harkens back to the practice of illegal tenants “squatting” in derelict or condemned buildings.

A party injured by cybersquatting can sue under the Anticybersquatting Consumer Protection Act, or ACPA.  The ACPA became a part of the U.S. trademark statute, also known as the Lanham Act.

(I should point out here that trademark owners injured by cybersquatting also can proceed through arbitration under what are called the Uniform Domain-Name Dispute-Resolution Policy, commonly referred to as the “UDRP” approach.  I will be discussing the UDRP approach in an upcoming related article.  This approach can be quicker and significantly less expensive than proceeding under the ACPA, though it also offers a narrower range of remedies.)

The ACPA defines cybersquatting (which the statute refers to as “cyberpiracy”) as “registering, trafficking in, or using” a domain name that is identical or confusingly similar to another party’s distinctive trademark, “with a bad faith intent to profit from that mark.”  If the complaining party’s trademark is deemed a “famous” mark under the law, cybersquatting also occurs where the domain name would “dilute” the famous mark by tarnishing or blurring the public’s perception it.

Bear in mind that the domain name used by the cybersquatter need not be (and in fact, often is not) identical to the trademark at issue.  One practice that domain pirates quickly adopted is “typosquatting,” which involves registering common misspellings of a trademark as domain names.  When an unwary web-user accidentally types the misspelled trademark, he or she is taken to the pirate’s site.  The ACPA is broad enough to cover this practice, provided it can be shown that the misspelled domain name is confusingly similar to the plaintiff’s trademark.

The ACPA’s definition of cybersquatting creates several issues of proof for the would-be plaintiff, which I will discuss in an upcoming article.  For now, let’s examine the remedies that the ACPA provides for those injured by cybersquatting.

If a violation of the ACPA is found, the court can order the forfeiture or cancellation of the offending domain name, or its transfer to the trademark owner. The trademark owner also can recover up to three times his or her actual damages.  Actual damages include any profits the cybersquatter made through his use of the domain, along with any losses sustained by the trademark owner through the cybersquatters activities (such as lost sales or harm to the mark’s reputation.)

The trademark owner also has the option of foregoing actual damages and instead taking statutory damages (similar in nature to the copyright statutory damages I discussed in an earlier post) in the amount of $1,000 to $100,000 per domain name.  The statutory damages amount is left to the court’s discretion – presumably, the more odious the cybersquatter’s actions, the higher the award.

Finally, in suitable cases a successful plaintiff can get an injunction prohibiting further cybersquatting by the defendant, and in “exceptional cases,” can also recover attorney’s fees from the cybersquatter.

Where the cybersquatter is offshore and therefore not subject to the jurisdiction of U.S. courts, a provision of the ACPA allows the injured party to proceed “in rem,” or directly against the domain name itself.  In these cases the only remedy is that the domain will be awarded to the plaintiff.

If your trademark has been cybersquatted, the ACPA provides a range of legal options you can use against against the pirate.  My next article will discuss what your law suit must show, in order to get an award of the remedies provided by the ACPA.  Another related upcoming article will discuss the UDRP approach and evaluate the respective benefits of ACPA vs. UDRP.  Stay tuned for more discussion!

PHOTO COURTESY OF FLICKR USER REITVELD, UNDER THIS CREATIVE COMMONS LICENSE.

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