While conducting business in today’s electronic age, it is common for a company to have an interest in a domain name which includes a phrase related to the company’s brand identity. However, sometimes that name has already been acquired by an individual for the sole purpose of ransoming it off to the highest bidder.
As part of the Intellectual Property and Communications Omnibus Reform Act of 1999, on November 17, 1999, Congress enacted the Anticybersquatting Consumer Protection Act (ACPA). It amends the Lanham Act by adding a new paragraph. The new section provides trademark owners with a civil remedy against cybersquatting, which is the registering of others’ trademarks as domain names and profiting from the sale of those domain names or traffic through the site.
Results of Cybersquatting
In enacting the law, Congress found that cybersquatting results in the following:
consumer fraud and public confusion as to the true source or sponsorship of products and services
impairment of electronic commerce, which is important to the economy of the United States
loss of substantial revenues and consumer goodwill by the trademark owner
Civil Action
The ACPA creates a civil action against a party that with a bad faith intent to profit registers, traffics in, or uses a domain name that:
in the case of a mark that is distinctive at the time of registration of the domain name is identical or confusingly similar to that mark, or
in the case of a famous mark that is famous at the time of registration of the domain name is identical or confusingly similar to or dilutive of that mark, or
is a mark protected under certain other federal laws.
Personal Names Protected
The ACPA also prohibits the unauthorized registration of a domain name that is the same as or confusingly similar to the name of another living person, if done with intent to profit from the domain name by selling it for financial gain to such person or a third party. Under this section, which is not part of the Lanham Act, courts can order the forfeiture or cancellation or transfer of the domain name. Monetary damages are not available, but the court may award costs and attorneys’ fees to the prevailing party in appropriate cases.
Elements to Prove
The plaintiff must prove the following elements to win a case of cybersquatting:
The defendant has a bad faith intent to profit from that mark, including a defendant name which is protected as a mark and the defendant has registered, traffics in, or uses a domain name that
in the case of a mark that is distinctive at the time of registration of the domain name, is identical or confusingly similar to that mark;
in the case of a famous mark that is famous at the time of registration of the domain name, is identical or confusingly similar to or dilutive of that mark; or
is a trademark, word, or a protected name
Bad Faith Intent to Profit from a Mark
Proving bad faith on the part of a cybersquatter is the key to prevailing in a lawsuit under the ACPA. In determining if the defendant has bad faith, the court may consider the following non-exclusive factors:
the trademark or other intellectual property rights of the defendant, if any, in the domain name;
the extent to which the domain name consists of the legal name of the defendant or a name that is otherwise commonly used to identify the defendant;
the defendant’s prior use, if any, of the domain name in connection with the bona fide offering of any goods or services;
the defendant’s bona fide noncommercial or fair use of the mark in a site accessible under the domain name;
the defendant’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 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;
the defendant’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 defendant’s prior conduct indicating a pattern of such conduct;
the defendant’s provision of material and misleading false contact information when applying for the registration of the domain name, the defendant’s intentional failure to maintain accurate contact information, or the defendant’s prior conduct indicating a pattern of such conduct;
the defendant’s registration or acquisition of multiple domain names which the defendant knows are identical or confusingly similar to marks of others that are distinctive at the time of registration of such domain names, or dilutive of famous marks of others that are famous at the time of registration of such domain names, without regard to the goods or services of the parties; and
the extent to which the mark incorporated in the defendant’s domain name registration is or is not distinctive and famous within the meaning of the Lanham Act.
The list is not exclusive, and courts may consider conduct or facts not specifically provided for in the ACPA. Remedies
The Act authorizes a court to order the forfeiture or cancellation of a domain name or the transfer of the domain name to the owner of the mark. In lieu of actual damages, the plaintiff may elect statutory damages and the court has discretion to award damages of not less than $1,000 and not more than $100,000 per domain name.
In Rem Action
If the owner of a domain name cannot be found , the trademark owner may bring an “in rem” action against a domain name in the judicial district in which the authority that registered or assigned the domain name is located. The remedies in an in rem action for cybersquatting are limited to a court order for the forfeiture of the domain name.
Contact Us
If you believe someone is cybersquatting your domain name, contact one of our knowledgable attorney’s to discuss protecting your proprietary brand identity.