For example, the Dell conglomerate owns the mark “Dell” in conjunction with electronics and financial services. However, Dell does not own the domain “Dellpay.com.” Classic story. If you go Dellpay.com, you’ll “find something interesting,” mainly links to other sites offering bill pay services and shopping aggregators selling Dell’s products. The site owner, OnlineNIC, does not own a Dell mark, especially not for computers or financial services. The site owner is using this site to capitalize off Dell’s branding and goodwill in order to make money through the advertising and links on its site. This is a prototypical cybersquatting case.
Faced with a situation like this, the trademark holder has several options.
1. First, the trademark holder could decide to do nothing. Companies have limited resources and it doesn’t make sense to go after every single person abusing your mark. For example, it’s unlikely that very many consumers are being diverted away from Dell’s products by this one little website. Thus, Dell may decide not to do anything at all and instead focus on frying bigger fish. Or, Dell could try the minimalist approach, which is to send a letter threatening further action unless the site owner transfers the site.
2. Second, the trademark holder could file a lawsuit in U.S. federal court against the site owner under the Anti-Cybersquatting Consumer Protection Act (“ACPA”). If successful, the trademark holder would be granted a Court order requiring that the domain be transferred back to the mark owner. By filing a lawsuit, the trademark holder gains the right to require the defendant to turn over relevant documents and to interview the defendant under oath. This process of investigation is called “Discovery” and it can be essential to proving your case. If the trademark holder wins, it’s possible that the cybersquatter would also have to pay monetary damages. If you bring an ACPA suit, your attorney will probably also bring other trademark law claims as well, such as violations of state trademark laws and federal trademark laws. The cybersquatting law, ACPA, is just one of many trademark law claims.
→ What do I need to prove in order to win an ACPA suit?
To be successful in an ACPA lawsuit, the mark owner must prove (1) that the mark is valid; (2) the website owner registered the site in bad faith in order to profit from the mark; (3) the mark was distinctive when the site was registered; and (4) the domain is identical or confusingly similar to the mark.
→ What if I can’t find the Cybersquatter to start a lawsuit?
Under ACPA’s liberal jurisdiction rules, you don’t have to personally serve the defendant. This makes it possible to bring the lawsuit even if you can’t find the defendant. This was necessary because so often WhoIs data is inaccurate or defendants are located far away in a foreign country.
→ What are the drawbacks of an ACPA Lawsuit?
The downside, of course, is that lawsuits are extremely expensive, time-consuming, stressful and uncertain. You need an attorney and it can take years to get a resolution. Also, you can only bring this lawsuit in the United States because ACPA is a U.S. statute. You don’t have to be a U.S. citizen, but you or your business needs to have substantial ties to the U.S. in order to bring a lawsuit in U.S. courts.
3. Third, the trademark holder could initiate an ICANN-approved arbitration proceeding under the Uniform Domain Name Dispute Resolution Policy (“UDRP”). If the mark holder succeeds in its arbitration proceeding, the arbitrator can order that the domain name be cancelled or transferred to the trademark owner. However, the mark holder cannot conduct “discovery” or obtain monetary damages.
→ What do I need to prove in order to win an UDRP Arbitration?
In order to prevail in UDRP arbitration, the mark owner must prove three things: (1) the domain name is identical or confusingly similar to the trademark in question; (2) the registrant has no rights or legitimate interests in the domain name, and (3) the domain name was registered and/or is being used in bad faith.
→ What are the advantages of UDRP Arbitration?
UDRP Arbitration is much cheaper and faster than a lawsuit. On average, proceedings are concluded within two months. Prices vary depending on how many domain names you are challenging and whether any of the parties elect to have a three-person panel hear the case instead of a single arbitrator. According WIPO’s UDRP site, for “resolution of a case involving one to five domain names, with a single panelist, the current cost is US $1,500; for three panelists, the total cost is US $4,000. For six to ten domain names, the current cost is US $2,000 for a case involving a sole panelist and US $5,000 for a case involving three panelists.
Also, you don’t need a lawyer to initiate UDRP Arbitration, although many people feel more comfortable with one.
Great news for our international friends! Because it’s based on I-CANN’s policies, and not on U.S. law, anyone can avail himself or herself of this quick and inexpensive dispute resolution process. (FYI, for .UK domains, there is a special dispute resolution policy administered through the .UK registrar Nominet. If ccTLDs are involved, you need to follow the dispute resolution policies specific to each country. They are often similar to URDP. You can find a list of dispute resolution organizations by country here.)
→ How do I initiate UDRP Arbitration and what’s the process like?
First, you must use one of the three Approved Providers. These organizations will oversee and administer the arbitration. They include (1) the Asian Domain Name Dispute Resolution Centre; (2) The National Arbitration Forum; (3) and the World Intellectual Property Organization. These organizations, in turn, have lists of qualified and approved arbitrators from around the world to hear and resolve cases.
Each Provider has their own specific rules, but they are very similar. You start off by electronically filing a written complaint with your Provider of choice and paying the filing fee. They have a complaint form you can use. They review your complaint to make sure it’s complete and then send a copy to the contact information on file with the registrar. The respondent has only a matter of days to respond, usually about 20 days. The response must be in writing. The Respondent can choose to have the matter heard before a three-person panel, if desired. However, this makes the proceeding more expensive and the Respondent must share in the added expense if he elects a panel instead of a single arbitrator.
Most often, the arbitrations take place purely online and there are very seldom in-person hearings. After reviewing both the complaint and the response (if any was filed), the arbitrator/s issue a written decision. The accredited domain name registrars – which have agreed to abide by the UDRP – implement a decision after a period of ten days, unless the decision is appealed in court in that time.
Over 80% of cases are decided in favor of the complainant, usually the trademark holder. Records of the outcomes are made available online by the Providers. To pass the time, try plugging in popular terms and brands (“sex,” “music,” “Dell”) into the National Arbitration Forum’s database of cases. I heart data. They’ve also got all kinds of cool statistics.
→ What are the drawbacks of an UDRP proceeding?
There is no possibility of monetary damages in a UDRP proceeding. That is probably the major reason some people prefer to take their chances with a lawsuit. Also, there is no opportunity for investigation, like there is in a civil lawsuit. Finally, it’s possible that the arbitration won’t be the end of the dispute.
→ Are URDP arbitrations final and binding?
The arbitrator’s decisions are mandatory in the sense that accredited registrars are required to take the necessary steps to enforce the decision, such as transferring the name concerned. However, under the UDRP, either party retains the option to take the dispute to a court for independent resolution. Thus, it’s possible the dispute won’t end at arbitration. However, in practice, the matters are rarely taken to court after arbitration.
→ What if I own a Domain that includes someone else’s trademark?
Unfortunately, you are vulnerable to a lawsuit or a UDRP proceeding if you have been operating a website that infringes on someone’s trademark. For example, let’s assume that you startup your internet marketing business in 2007 at TrojanSeo.com. And you go along your merry way providing search marketing services. Unbeknownst to you, there is an SEO firm called Three Trojans SEO that federally registered its name as a trademark in 2005. Bad news for you, my friend! You should have done your due diligence before picking your business name. While maybe you didn’t intentionally act in bad faith to take business from Three Trojans SEO, you may have a difficult time convincing a court or an arbitrator that is true. It’s best to get out of this situation as gracefully as possible. Consider negotiating to pay Three Trojans a modest fee in order to have use of the site for an additional six months so that you can re-direct traffic to your new, renamed SEO firm. They may be amenable to a situation like this for the right price.
If you own the site, but haven’t been using it to run your business, you still have some exposure. It’s like momma said, “Avoid even the appearance of evil.” Whatever you do, don’t be seen as wanting to make a profit by selling the site to the trademark holder! This will get you labeled as a cybersquatter. You will be accused of having registered the domain in “bad faith.” That opens the door to monetary damages and all kinds of drama you don’t need. You should either just let it the domain expire, hold onto it forever without using it, or offer to sell the domain to the trademark owner for “cost.” Coincidentally, the going rate for a domain name that includes a trademark is about the exact amount it would cost to initiate UDRP arbitration ($1,5000 to $2,000). Funny how that works, isn’t it?
Archetypal Domain Name Dispute #3: No one owns the trademark, but everybody wants the brand
Conclusion
I hope this post has given you a better understanding of the mechanics of domain name disputes and how trademark law operates on each of them.
If you believe someone is infringing your trademark in bad faith, consider bringing an UDRP Arbitration. Resolution is quick, cheap and may not require an attorney. Alternatively, if you know you’re going to have a difficult time proving “bad faith,” you can bring a lawsuit in federal court under various state and federal trademark laws, but make sure you have a war chest to pay the lawyers fees, court costs, experts, and investigative fees. Litigation should always be the last resort.
If you’re being accused of violating someone’s trademark, don’t panic until you’ve carefully reviewed the facts. Do you operate in a different industry? If yes, it’s possible that you both have legitimate rights to the mark. Did you start using the mark before the other company? If so, you may have a defense. Are you using the site for a legitimate use (satire or criticism) in way that does not lead to customer confusion? Asking the right questions may reveal that you have the right to keep your domain.
As always, I look forward to your questions and comments. Thanks for reading!
Very truly yours,
