Cybersquatting

Cybersquatting happens when somebody registers, sells, or uses a domain name that incorporates the trademark or service mark of an existing company, usually intending to sell the domain name to the mark’s owner at a profit. It includes any time somebody registers, sells, or uses a domain name in order to profit from a trademark’s goodwill. There are two ways to obtain a legal remedy against a cybersquatter:  suing under the Anticybersquatting Consumer Protection Act (the “Act”) or using the Internet Corporation of Assigned Names and Numbers’ (ICANN) international arbitration system.

Suing Under the Anticybersquatting Consumer Protection Act

If you are a trademark owner, you can sue under the Act to obtain a court order that transfers the domain name back to you. In general, lawsuits can get very expensive and take a long time. However, you may be able to obtain statutory money damages from $1,000 to $100,000 per domain name. In some cases, you can file an action against the domain name itself, rather than suing an individual or business.

In a lawsuit, you will need to prove that the domain name registrant possessed a bad-faith intent to profit from the trademark, that the trademark was distinctive when the alleged cybersquatter registered the domain name, that the domain name is the same as or confusingly similar to your trademark, and that federal trademark law protects your trademark. Not only must it be distinctive, but you must have been the first to use it.

The Act does not prohibit a registrant’s fair use of a domain name, or any uses protected by the First Amendment. The most common successful defense is that the cybersquatter did not have a bad-faith intent to register the domain name in order to sell it to the mark owner for a profit and had some other reason to register it.

What counts as bad faith? Under section 43(d), the court considers these factors to determine whether there is bad faith:

  • Whether the alleged cybersquatter has any intellectual property rights in the domain name;
  • Whether it is the alleged cybersquatter’s legal name or nickname;
  • The alleged cybersquatter’s prior good faith use of the domain to offer products or services;
  • Whether there is a noncommercial or fair use of the mark in the website using the domain name;
  • Whether the alleged cybersquatter’s intent was to divert a consumer to a site that could harm the trademark owner’s goodwill for commercial gain or in order to dilute (tarnish) the trademark;
  • Whether the alleged cybersquatter offered to sell the domain name to the mark owner without using the name or intending to use it to offer products or services in good faith, or has a prior pattern of doing this;
  • Whether the alleged cybersquatter intentionally provided misleading contact information in registering the domain name or had a prior pattern of doing that; and
  • Keeping and not using multiple domain names known to be identical or confusingly similar to distinctive marks or dilutive of famous marks, without considering goods or services.

Using ICANN Arbitration Procedures

In general, using the ICANN arbitration system, the Uniform Domain Name Dispute Resolution Policy (UNDRP), is likely to be faster than suing under the Act. Under UDRP, anybody can bring a complaint. You must establish that a domain name is identical or confusingly similar to a trademark in which you have rights, the domain name owner did not have intellectual property rights or legitimate interest in the domain name, and the domain name was registered and is being used in bad faith. If you can establish these elements, the domain name will be canceled or transferred to you.