War On Cybersquatters

Trademark owners now have two legal weapons aimed specifically against cybersquatters, even if the marks are not registered with any state or federal trademark registry. “Cybersquatters” are those who intentionally register other parties’ trademarks as domain names and attempt to sell them to the trademark owner or other high bidder (“traditional” cybersquatters), or who use them to divert e-commerce traffic to a different location to sell the cybersquatter’s own goods and services or sell advertising for others (“traffic diversion” cybersquatters).

Under the Anticybersquatting Consumer Protection Act, trademark owners can win infringement damages and transfer of a domain name if an alleged cyber pirate cannot show reasonable grounds for its fair use of the domain name. Courts may consider, among other factors, whether the cybersquatter (i) intends to divert traffic to an infringing or tarnishing site; (ii) is trying to sell the name without using it; (iii) has disguised its identity to the domain name registrar; or (iv) has registered the domain name as part of a pattern of conduct. The publisher of Teen and Teen Magazine, for example, won an injunction against the defendants’ use of teenmagazine.com to link to a pornographic website. This remedy must be pursued in a court action, and monetary relief is much enhanced (treble damages and attorneys’ fees are available) if the plaintiff has a federal trademark registration.

The ICANN Uniform Domain Name Dispute Resolution Policy provides for mandatory neutral arbitration of domain name disputes. To prevail, the complainant must establish (i) confusing similarity of the domain name to its trademark; (ii) the registrant has no legitimate interest in the domain name; and (iii) the domain name has been registered and is being used in bad faith. The primary disadvantages of using only the Policy to enforce trademark rights against cybersquatters are that transfer of the offending domain name is the only relief available (monetary damages are not awarded), and there is not yet a large body of precedent upon which the arbitrators and the parties to the dispute may rely. The primary advantages of the Policy, however, are that it is extremely fast and inexpensive compared to a court proceeding.

If you are a business owner who has invested significant resources in building the goodwill of your trademarks, you can now retaliate against cybersquatters and reclaim domain names that may rightfully belong to you under the trademark law.

Technology Law Alert is a publication of the Technology Practice of Downey Brand LLP, a full-service law firm counseling California businesses since 1926.