Original image from Everkinetic
Cybersquatting is generally bad faith registration of another’s trademark in a domain name. Under section 43(d) of the Lanham Act (also known as the Anticybersquatting Consumer Protection Act or ACPA), a person shall be liable to the owner of a trademark if that person has a bad faith intent to profit from that mark and registers, traffics in, or uses a domain name that is identical or confusingly similar to a distinctive trademark at the time of registration of the domain name.
When trying to determine whether a person has a bad faith intent, a court may consider factors both that may be in favor or against of the domain name owner. Factors that may help the domain name owner include:
- the trademark or other intellectual property rights of the person who registered the domain name, if any, in the domain name. For example, it is their legitimate trademark, too.
- the extent to which the domain name consists of the legal name of the person or a name that is otherwise commonly used to identify that person. For example, it is the domain name owner’s name or nickname;
- the person’s prior use, if any, of the domain name in connection with the bona fide offering of any goods or services. For example, if the domain have been legitimately using that name offline or on another website for their own business and own purposes for a number of years.
(IV) the person’s bona fide noncommercial or fair use of the mark in a site accessible under the domain name. For example, the gripe sites such as the .sucks domain names where the domain owner is using it to clearly express displeasure with a company.
However, the domain name owner is likely in trouble of the judge finds that he or she has been doing the following:
- the person’s intent to divert consumers from the mark owner’s online location to a site accessible under the domain name that could harm the goodwill represented by the mark, either for
- commercial gain of the domain name owner or
- with the intent to tarnish or disparage the mark, by creating a likelihood of confusion as to the source, sponsorship, affiliation, or endorsement of the site.
For example, the domain name owner registers a domain name using a competitor’s trademark.
- the domain name owner’s offer to transfer, sell, or otherwise assign the domain name to the mark owner or any third party for financial gain without having used, or having an intent to use, the domain name in the bona fide offering of any goods or services, or the person’s prior conduct indicating a pattern of such conduct. For example, the domain name owner registers a domain name and then tries to sell it to the trademark owner – especially for a profit.
- the person’s provision of material and misleading false contact information when applying for the registration of the domain name, the person’s intentional failure to maintain accurate contact information, or the person’s prior conduct indicating a pattern of such conduct. Or in English, the domain owner is a lying liar.
- the person’s registration or acquisition of multiple domain names which the person knows are identical or confusingly similar to marks of others that are distinctive at the time of registration. By “warehousing” these marks, even without a clear intent to sell, the domain name owner can be in trouble.
Bad faith intent is not goint to be found in any case in which the court determines that the person believed and had reasonable grounds to believe that the use of the domain name was a fair use or otherwise lawful. Notice that “and.” They both had to believe they could do it lawfully AND it be reasonable that they believed that.
If a person cybersquats, the trademark owner can file a UDRP action which allows the domain name to be transferred to the mark owner without any compensation to the domain name owner if cybersquatting is found. In the alternative, they may file a law suit. In addition or instead of traditional trademark remedies like injunctions or actual damages caused by the domain name owner’s actions, the trademark owner may elect statutory damages ranging from $1,000 to $100,000 per domain name depending on the circumstances.
Given this, why would anyone choose a UDRP action? Well, maybe all the trademark owner cares about is getting the domain name, and not other damages. Why go though all of the expense and time of a full lawsuit if the UDRP action gets you what you want for less? But if more damages are important or you think the alleged cybersquatter is just going to appeal to court anyway, then the UDRP action is much less appealing.
So what’s the moral of the story? If your idea of a good domain name is one that takes advantage of your competitor’s trademarks, think again. Focus on your marks instead. In other words, let your mark do the heavy lifting, not theirs.