D. Assert Your Rights As Senior Trademark User

Read the rest of this chapter only if you:
•are already in business,
•use a distinctive name to identify your product or service, and
•want to use that name as your domain name.
If you already use your proposed domain name to market products or services, you may have the upper hand in a dispute with someone who's using the domain name. Under trademark law, the firstperson to use a mark in commerce is considered the owner (more on this in Chapter 3, Section B). So if you used the name to market your products or services before the domain name registrant started using its domain name, you can prevent another business from using the same mark if:
•the mark is nationally famous (laws against trademark dilution protect famous marks from use by others, even if there is no customer confusion—see Chapter 4, Section G2), or
•the use creates a likelihood of customer confusion (discussed in some detail in Chapter 7), or
•the other user is a "cybersquatter" under federal law.
Sample Domain Name Transfer Agreement
Domain Name Transfer Agreement
(Buyer)
and (Seller)
agree as follows:
1.Seller assigns to Buyer all right, title and interest worldwide to the
[Domain Name] domain name, together with any goodwill associated with it.
2.Seller represents that Seller has full power to enter into and perform this Agreement.
3.Seller will promptly apply to Network Solutions, Inc. (NSI) to transfer ownership and management of [Domain Name] to Buyer under current NSI procedures for modifying a domain record. Specifically, Seller will instruct NSI to change the billing name, technical contract and administrative contact for [Domain Names] to [new billing name, technical contact and administrative contact information] . Seller will provide the information and email messages, and execute documents, necessary to accomplish the transfer of the domain name.
4.Buyer will pay Seller $ upon confirmation that NSI has changed the billing name, technical contact, and administrative contact as specified in Paragraph 2. A current printout of a WHOIS query provided to Buyer by Seller will be sufficient evidence of the domain name transfer. Buyer will issue a check for the full amount made out to , and send it via overnight delivery service to Seller at the address below.
5.As a couresy, Buyer will attempt to forward to Seller from time to time any misdirected email messages received through the [Domain Name] domain name. Seller recognizes that Buyer's hardware and the Internet itself may not always function perfectly, and that delays might be involved in forwarding the email messages. In no event will Buyer be liable for any lost profits, lost revenue, lost data or any form of special, incidental, indirect, consequential or punitive damages of any kind, whether based on breach of contract or warranty, tort (including negligence), product liability or otherwise ( wheather or not foreseeable), even if informed in advance of the possibility of such damages, for failure to deliver or timely deliver and email messages.
6.This Agreement will be governed by the laws of the State of [Buyer's state] .
7.If any provision of this Agreement is held by a tribunal od competent jurisdiction to be contrary to law, the remaining provisions will remain in effect.
8.This Agreement constitutes the entire agreement between the parties with the respect to the [Domain Name] domain name. This Agreement may not be changed in any respect except in writing duly executed by authorized representatives of each of the parties.
Seller's Full Name Buyer's Full Name
Seller's Signature Buyer's Signature
Date Date
Address Address
1. Choosing a Strategy
If you are a trademark holder and want to challenge the use of a domain name, you will first need to decide on a strategy for going after the registrant. You have three choices:
•Use the dispute resolution service offered by ICANN. ICANN, the international nonprofit organization now in charge of domain name registrations worldwide, recently implemented a process called the Uniform Domain Name Dispute Resolution Policy, or UDRP. This administrative procedure works only for cybersquatting disputes—that is, when someone has registered your name in a bad-faith attempt to profit from your trademark. It is potentially less expensive (about $1,000 to $2,500 in fees) and quicker than filing a lawsuit (just 57 days to resolution).
•File a trademark infringement lawsuit. If you win, the court will order the domain name holder to transfer the domain name to you, and may award you money damages as well. A lawsuit is always an option, whether or not you pursue ICANN's dispute resolution process. We discuss infringement lawsuits in Section 3, below.
•File a cybersquatting lawsuit. If you win, you can not only get the domain name you want, you may also win money damages from the cybersquatter.
Strategies for Going After Someone Using Your Trademark as a Domain Name
ICANN Dispute Trademark Cybersquatting
Resolution infrinqement Lawsuit
Procedure Lawsuit
Lawyer needed? No Yes Yes
Cost Approximately $10,000 and up $10,000 and up
$1,000 to $2,500
Time 57 days from date you Months if the case A month or two file your complaint settles, years if it goes to trial
Grounds for relief Bad-faith registration of Trademark Cybersquatting
your name infringment
Who can be Any domain name As a practical As a practical
registrant matter, only U.S. matter, only U.S.
registrants
What you may win The domain name you The domain name The domain name
want you want plus you want, plus
money damages money damages
for post-November
1999 activity
2. The ICANN Dispute Resolution Procedure
ICANN's new dispute resolution procedure applies to virtually all domain name registrants. (Before ICANN acted, NSI, which had a monopoly on domain name registrations in the United States, had its own dispute resolution system, which handled disputes between its domain name registrants and trademark holders.)
a. What You Must Prove to Win
To win your case in the ICANN procedure, you'll have to prove three things:
•The domain name at issue is identical or confusingly similar to a mark that you own, whether or not the mark has been registered as a trademark in the U.S. or abroad,
•The registrant has no rights or legitimate interests in the domain name, and
•The domain name was registered and/or is being used in bad faith.
You must prove similar things to prevail in a lawsuit based on the federal Anti-Cybersquatting Consumer Protection Act, discussed in Section 4, below. The Anti-Cybersquatting Act is, however, as a practical matter, enforceable in the United States alone. The ICANN procedure, on the other hand, can conveniently be used against domain name registrants outside of the U.S. as well.
Here's a look at each of these three elements in more detail.
Domain name's confusing similarity to your trademark. You must assert that you own the mark because you were the first to use it or because trademark registration has given you the right to its exclusive use. You must also state that the domain name really is confusingly similar to your mark. (If you need help understanding customer confusion, see Chapter 7.) If the domain name at issue is preventing you from using your mark as your own domain name, the "identical or confusingly similar" test will probably be satisfied.
Registrant's lack of rights or legitimate interests in the name. To prove this element, you must show three things:
•The registrant has never tried to use the domain name (or a similar one) in connection with legitimate commerce, on or off the Web;
•The registrant was never generally known by the domain name, even if the name wasn't used in commerce as a trademark; and
•The registrant isn't using the domain name in any legitimate way. A legitimate use would, for example, consist of use on a non-commercial website that engages in satire or criticism. But the use would not be legitimate if the registrant's actual intent is to divert consumers from your website or business location, or to tarnish your mark by lessening its reputation for quality.
Registrant's bad faith. This one is really the flip side of the second item. The registrant has acted in bad faith if you can show any of the following:
•The registrant acquired the domain name with the intent to sell it back to you or your business in particular, or to a competitor of yours, for profit. This wouldn't apply to those who acquire domain names with the intent to auction them off to the highest bidder later, because the plan was not directed specifically at you.
•The registrant has a pattern of acquiring domain names with the intent to block their use by legitimate trademark owners. That is, the registrant is a true cybersquatter. (See Section 4, below.)
•The registrant is a competitor who acquired the domain name primarily to disrupt your business
•The registrant is using the domain name to attract users to the website by creating customer confusion. (See Chapter 7.)
b. How the Process Works
Your first step is to choose a dispute resolution "provider," which is an organization approved by ICANN. So far, ICANN has approved just two providers. Each has its own supplemental rules for dispute resolution, so in addition to ICANN's procedural rules you must follow the provider's rules. You can check them out at the provider's website, listed below. These sites offer detailed discussions about how to navigate the process.
To begin your case, you send a complaint to the provider, setting out specific facts that prove the three elements discussed above. Check the provider's website for fee information. Who pays the fees and how much will vary depending on the circumstances and the provider.
After reviewing the complaint for completeness, the provider will send the registrant a copy of the complaint, along with directions on how the registrant can respond and within how much time. The domain name registrant can continue to use the name until the dispute is resolved.
The provider will usually issue a response based solely on the complaint and the response. Either party may go to court if the decision is not to their liking. However, if the decision is in your favor, you will get the domain name transferred to you unless the registrant promptly files a lawsuit to prevent it.
The ICANN procedure is still new, and there will no doubt be numerous changes to it; the rules may have changed by the time you read this book. Check out the resources listed below to get the most up-to-date rules.
Current Information About Dispute Resolution Procedures
ICANN:www.icann.org. Go there for the most current information about the new dispute resolution process.
DomainMagistrate.com:www.DomainMagistrate.com. This site is operated by Network Solutions, Inc., to help people figure out how to use the new domain name dispute resolution procedures.
Dispute Resolution Providers: ICANN has named two organizations, called providers, to help resolve domain name disputes: the World Intellectual Property Organization (WIPO):http://arbiter.wipo.int/domains and the National Arbitration Forum:www.arbforum.com/domains/.
3. A Trademark Infringement Lawsuit
As the senior user of a trademark, you can bring a trademark infringement lawsuit against the domain name owner if your trademark is distinctive and the use of the domain name creates a likelihood of customer confusion. As part of this suit, you can ask the court to require the owner of the domain name to transfer it to you and you may also be able to recover damages and attorney's fees. Of course, going to court is time-consuming and may cost you more than you'll recover from the defendant. You'll want to carefully weigh the possible benefits against the costs.
Things can get confusing if the trademark you've been using isn't exactly the same as your proposed domain name. If it's almost the same, trademark law lets you maintain ownership. But you can lose your seniority if there are significant differences. For instance, in one recent case, a company that owned the trademark "The Movie Buff's Movie Store" registered the domain name moviebuff.com. Another company, which had been using the actual mark "moviebuff" on a CD-ROM containing movie information, was prevented from using moviebuff.com as a domain name. The "Movie Buff's Movie Store" mark had been in use before the other company started using moviebuff on its CD-ROMs. Who was the senior user of the moviebuff trademark? The U.S. District Court ruled that the company using "The Movie Buff's Movie Store" was the senior user because it had used that name before the other company used moviebuff. But an appeals court reversed, ruling that "The Movie Buff's Movie Store" was an entirely different mark than moviebuff, and ordered the "Movie Buff's Movie Store" company to surrender the domain name to the moviebuff thcompany. (Brookfield v. West Coast Entertainment Corp., 174 F.3d 1036 (9 Cir. 1999). You can read this case at http://caselaw.findlaw.com/cgi-bin/getcase.pl?court=9th&navby=case&no=9856918.)
TipTrademark: Legal Care for Your Business & Product Name, by Stephen Elias and Kate McGrath (Nolo), is a book that explains how rights to conflicting trademarks are resolved and what's typically involved in trademark infringement actions
Trademark Disputes: Who Wins, Who Loses & Why, by Stephen Elias, is a downloadable eGuide, available at www.nolo.com.
4. An Anti-Cybersquatting Lawsuit
If you own your name and find that someone or some business is holding it hostage as a domain name until you pay a large sum for it, you may be the victim of cybersquatting. You can sue to get your domain name—and possibly some money damages—under a 1999 federal law known as the Anti-Cybersquatting Consumer Protection Act. Because suits must be filed in federal court, you almost certainly will need to hire a lawyer.
Under the Act, cybersquatting means registering, trafficking in or using a domain name with bad-faith intent to profit from the goodwill of a mark belonging to someone else. It refers to the practice of buying up domain names reflecting the names of existing businesses with the intent of selling thnames for a profit back to the businesses when they go to put up their websites.
The Origins of Cybersquatting
The practice that's come to be known as cybersquatting originated at a time when most businesses were not savvy about the commercial opportunities on the World Wide Web. Some entrepreneurial souls registered the names of well-known companies as domain names, with the intent of selling the names back to the companies when they finally woke up. Panasonic, Fry's Electronics, Hertz and Avon were among the "victims" of cybersquatters. Opportunities for cybersquatters are rapidly diminishing, because most businesses now know that nailing down domain names is a high priority.
a. Recognizing Cybersquatting
How do you know if a cybersquatter has your name? As a general rule, you should first see whether your proposed but unavailable domain name takes you to a legitimate website. Simply enter www. and the domain name in your browser.
If the domain name takes you to a website that appears to be functional and reasonably related in its subject matter to the domain name, you probably aren't facing a case of cybersquatting. However, you may have a case of trademark infringement, as described in Section 3, above.
But if your browser produces any of the following results, and you are a famous individual or are using your existing business name as your proposed domain name, you may have a case of cybersquatting on your hands:
•You get a "can't find server" message
•You get an "under construction" page, or
•You get a page that appears to have no relationship to the meaning of the domain name. For instance, if you type the well-known Nolo trademark WillMaker into your browser (www.willmaker.com), you get Shells' Ragtown Political Art Studio. (Yes, Nolo.com appears to have its own cybersquatter problems.)
Although each of these results suggests the possibility of cybersquatting, there may also be an innocent explanation for the lack of a functioning website, especially if the website is still under construction. It's very easy and inexpensive to register or reserve domain names but more difficult to put up the actual website. You can reserve a domain name for two years, so the fact that a website is not up, even months after the name was reserved or registered, does not necessarily mean that the registrant doesn't have perfectly legitimate plans to have a website in the future.
Before jumping to any conclusions about a proposed domain name that is not available, contact the registrant. (See Chapter 2, Section B, for how to do this.) Find out whether there is a reasonable explanation for the use of the name, or if the registrant is willing to sell you the name at a price you are willing to pay.
Sometimes paying the cybersquatter is the best choice. Even though Congress has provided a remedy against cybersquatting, it requires a federal court lawsuit and, almost by necessity, lawyers. It may be a lot cheaper and quicker for you to come to terms with a cybersquatter than to stand on your rights and invoke the power of the federal court with its attendant costs and delay. Although you may be able to recover your costs and attorney fees if you win, there is no guarantee; it's completely up to the judge.
b. What You Must Prove to Win
If somebody else has already registered your business name or other mark as a domain name, you can sue the registrant in federal court to have the domain name transferred to you. To win, you'll have to prove all of the following:
•The registrant had a bad-faith intent to profit from your mark (see section c, below),
•Your mark was distinctive at the time the domain name was first registered (see Chapter 4 for more on what makes a mark distinctive),
•The domain name is identical or confusingly similar to your mark, and
•Your mark qualifies for protection under federal trademark laws (see Chapter 8)—that is, you were the first to use the mark in commerce.
You don't have to show that customers are likely to be confused. (This is different from a trademark infringement lawsuit; see Section 2 above.) This means you can sue the domain name registrant even if the website sells products or services that are completely unrelated to yours.
c. Bad Faith
To win a lawsuit based on the Anti-Cybersquatting Act, you must show bad faith on the part of the domain name registrant. This will not be easy. There is no bad faith if the person who registered the name had reasonable grounds to believe that the use of the domain name was a fair use or otherwise lawful. If a cybersquatter is able to show a reason for registering the domain name other than to sell it back to the trademark owner, then the courts will allow him to continue.
If you can answer yes to any of the following questions, then there may be no bad faith:
•Does the domain name registrant have an arguable claim to the name because of the registrant's existing trademark rights? There may be concurring uses of the same name that are noninfringing, such as the use of the "Delta" trademark for both air travel and sink faucets. Similarly, the registration of the domain name "deltaforce.com" by a movie studio would not tend to indicate a bad-faith intent on the part of the registrant to trade on Delta Airlines' or Delta Faucets' trademarks.
•Does the domain name identify the registrant as an individual? A person is entitled to his or her own name, whether in business or on a website. Similarly, a person may bear a legitimate nickname that is identical or similar to a well-known trademark, such as in the well-publicized case of the parents who registered the domain name "pokey.org" for their young son who goes by that name.
•Has the registrant ever used the domain name in connection with the offering of goods or services? If the registrant has a commercially sensible reason for using the domain name (other, that is, than selling it back to you), there is probably not bad faith.
•Is the registrant legally using the mark on the website itself? It's legal to make noncommercial or fair uses of others' marks online, such as in comparative advertising, comment, criticism, parody or news reporting. The mere fact that the domain name is used for one of these purposes would not alone establish a lack of bad faith.
Congress has also provided us with some indicators of the bad faith necessary to prove a cybersquatting charge. If the answer to any of the following questions is yes, the court may be inclined to find that the registrant is acting in bad faith, or did so when the domain name registration was made.
•Is the registrant using the domain name to divert users from your site to another site where customer confusion is likely to result or your trademark's reputation for quality is harmed? In other words, is the domain name being used in a way that negatively affects your website or the value of your trademark?
•Has the registrant offered to sell the domain name to you without having ever legitimately used the domain name on a commercial website?
•Has the registrant provided false or misleading contact information to the domain name registry or failed to keep this information up to date?
•Has the registrant registered multiple names that are the same or confusingly similar to distinctive marks? In other words, is there an apparent pattern of cybersquatting?
•Is the mark in question famous or highly distinctive? The more distinctive or famous the mark, the more the court is likely to conclude that the registrant acted in bad faith.
It's the Facts That Count
In one of the first cases decided under the federal anti-cybersquatting law, a court ruled that a business that had used another business's trademark as a domain name had acted in bad faith and was a cybersquatter.
In 1985, Sportsman's Market (Sportman's) registered the trademark Sporty's, which it used on its aviation products catalog. Ten years later, Omega Engineering decided to sell aviation products and registered the domain name sportys.com. Nine months later, Omega created a wholly-owned subsidiary called "Sporty's Farms" for the alleged purpose of operating a Christmas tree farm, and sold the sportys.com domain name to it. Sportsman's learned of the registration, sued to obtain the domain name for its own use and won in U.S. District Court. Sporty's Farms appealed the trial court's decision.
During the appeal, Congress passed the Anti-Cybersquatting Act, and the appeals court applied it to this dispute. The court noted that the particular facts in this case didn't mesh well with the criteria set out in the Act for determining bad faith, a necessary ingredient for a successful cybersquatting charge. However, the court also noted that the Act allowed it to go beyond those criteria and, under the unique facts of this case, found that Omega had acted in bad faith. Sportsman's got the domain name sportys.com. (Sporty's Farm v. Sportsman's Market, Inc, Docket Number 98-7452).
d. What You Can Sue For
Under the Anti-Cybersquatting Act, victorious cybersquatting victims can ask the court for an injunction against the cybersquatter, and for monetary damages.
Injunctive relief is a court order requiring the domain name registrant to transfer the domain name to the plaintiff. Injunctive relief is available whether the cybersquatting occurred before or after the Act took effect.
Recovering Your Good Name
If a cybersquatter has registered your personal name—or a name that is "substantially or confusingly similar" to it—you can sue in federal court to have the name transferred back to you. However, you will have to prove that the domain name registration was done with the specific intent of selling it back to you or to a third party for a profit. As a general rule, this will only work for famous people and politicians, since it's unlikely that the name would be registered with an intent to make a profit unless it belonged to someone well known.
If you win your lawsuit against the cybersquatter, you are also entitled to recover three times the total amount of money you lost because of the cybersquatter, plus the profits realized by the cybersquatter from his or her illegal activity, plus your court costs. In exceptional cases, you can also be awarded attorney's fees. However, cybersquatting usually doesn't cause actual monetary losses (though it does cause you massive inconvenience). Nor does it generate profits, unless you paid the squatter. So, at your option, the Court can award you "statutory damages" of $1,000 to $100,000. Since statutory damages do not require proof of any type, they offer you a realistic opportunity to recover money as well as the domain name.
Importantly, money damages (both actual and statutory) may only be recovered for cybersquatting activity that occurred after November 29, 1999. For instance, if the cybersquatting activity complained of is the registration of the name, and the registration occurred before November 29, 1999, you can't recover money damages. However, you can recover for other prohibited activities that occurred after November 29, 1999. For example, even if the domain name was registered before November 29, 1999, you can still recover money damages if the domain name was trafficked in (for instance, offered for sale) or used after November 29, 1999.
If You Can't Find the Cybersquatter
You may run into trouble when you try to sue a cybersquatter, because you don't have a physical address to which to send the documents (a complaint and summons) that get the lawsuit started. A lawsuit generally can't begin until the person or business is properly notified that it's being sued. And you can't send that notification by email. Some cybersquatters provide inaccurate contact information to the domain name registration service, making them next to impossible to track down.
If you can convince the court that you've been diligent in trying to locate the cybersquatter, but have failed to do so, the court will order the domain name registration to give you the name. This is called an "in rem" action.