As new technologies develop, businesses are discovering their trademarks being used in creative ways. As discussed elsewhere, there have been a wide range of trademark related internet disputes which go beyond domain name disputes. Whenever a domain name dispute arises there may be a need to consult other interrelated aspects of internet law.
Internet law is a combination of other laws, consisting of elements of copyright, trademark, patent, other non traditional intellectual property law such as tort, contract and equity. Laws have been specifically adapted to the internet which are really just subsets of other legal actions.
TRADEMARKS AND DOMAIN NAMES
The following is general information for trademark owners, domain name portfolio owners and website developers on the topic of domain name disputes. Domain name disputes are increasing in prevalence as more businesses establish an online presence as a platform to market and sell their goods and/or services. The internet is now seen as an essential channel for many businesses trading businesses globally and new business models are evolving. Businesses often see it as desirable to secure a domain name which reflects either their registered business or company name or one of their branded products or services. Domain names, initially intended to perform a mere technical function, have become important business identifiers on the internet.
In addition to identifying the owner of the domain name and the source of goods sold through it, domain names sometimes become brands in and of themselves. Even generic or descriptive domain names, used on a website selling goods or services associated with the relevant term, can become a popular household name through their use in the online marketplace.
HOW ARE DOMAIN NAMES ACQUIRED?
Domain names are allocated on a first come first served basis. The process of acquiring a domain name is automated. Domain name registration system does not require domain name registrants to conduct any trademark search or acquire trademark clearance prior to registering a domain name to a person. Therefore people can register domain names containing variations of the whole or part of a trademark either purposefully or without even necessarily being aware they may be violating a trademark owner’s rights.
HOW ARE TRADE MARK INTERESTS ACQUIRED?
Depending on the jurisdiction, trademark entitlements can arise either through common law use or trademark registration and operate on a territorial basis. Trademarks operate within discrete geographical territories or boundaries whereas the internet disregards such boundaries. As a result domain names and trade marks are increasingly coming into collision on the internet.
The owner of a common law or registered trademark has the ability to prevent a third party from using their trademark or a confusingly similar variation of it within a domain name, if the person or entity using it has a bad faith intent to profit from it. However, a trademark owner cannot generally prevent another person using the trademark in connection with sufficiently different goods unless the trademark falls into the category of being a well-known or famous trademark.
In many cases the parties in dispute may both be operating legitimately in conducting their respective activities, either in similar or different markets, in either geographically contiguous or remote areas. The domain name registrant may not have had any bad faith intent to profit or deprive the trademark owner from claiming trademark rights in the domain name.
WHAT IS CYBERSQUATTING?
Domain names can incorporate trademarks in a variety of ways not all of which are motivated by bad faith or an intent to profit from the goodwill a trademark owner has built in their name.
Domain name disputes can arise in the context of commercial uses of trademarks within a domain name operated by a competitor or affiliate of a trade mark owner, or can occur between a trademark owner and a party with legitimate rights in the mark in question making good faith use of the domain name in dispute. Disputes also arise in relation to both commercial and non-commercial websites which claim to be parodies, complaint or review sites.
Cybersquatting is a term frequently used to refer to the deliberate bad faith registration of a domain name incorporating another person’s brand or trademark within a domain name with the intention of profiting from the registration.
A cybersquatter may merely adopt a trademark verbatim in a domain name followed by a general top-level domain such as www.microsoft.com or a variation which is confusingly similar. The mere addition of a generic or descriptive word to a registered or common law trademark does not negate a finding of confusing similarity.
Typosquatting is a variation of cybersquatting, where a person registers a domain name containing common misspellings of popular trademarks, relying on the likelihood internet users will make typographical errors in entering domain names into their URL address bar.
Cybersquatters sometimes place advertisements on websites linked to the domain name and collect revenue when internet users click on those advertisements. Alternatively they may merely register the domain name and either actively try to sell it back to the trademark owner for an inflated price or wait for the trademark owner to approach them offering to buy the domain name. The term squatting implies the registrant is just occupying a space on the internet which they have no legitimate right to own.
Another term associated with cybersquatters is ‘namejacking‘, involving the acquisition of an individual’s name as a second level domain. Establishing a website enables a domain name registrant to capitalise on searches performed for a person’s name. The search volume for a domain name can be massive particularly where the domain name is the name of a famous brand or a celebrity.
WHY IS CYBERSQUATTING DAMAGING?
Trademark owners can suffer harmful effects in terms of the goodwill associated with their trademarks and also the hijacking or diversion of search traffic by an abusive domain name registration. Users looking for a particular website also become frustrated particularly if they end up on a website containing offensive material such as pornography. Users expect trademark owners to monitor their trademarks on the internet. A failure to monitor the misuse of a trademark can result in a trademark owner abandoning a claim against a cybersquatter.
HOW ARE DOMAIN NAME DISPUTES DECIDED?
Trademark owners who become aware of domain names which either contains or incorporate their trademark have different options to pursue the recovery or surrender of the domain name.
A first line strategy is for a trademark holder to consider sending a cease-and-desist letter to the cybersquatter, requesting the transfer or surrender of the domain name prior to initiating legal action. From an evidentiary perspective, it is useful for a trade mark owner to take snapshots of a website if they have any intention of bringing legal action at any time. Once the domain name owner is notified that the trademark owner is aware of the use of their trademark, the domain name owner may alter the website prior to any legal dispute being heard.
TAKING LEGAL ACTION AGAINST THE DOMAIN NAME OWNER IN THE COURTS
Trademark owners can pursue legal action against domain name owners through the courts or through an online administrative procedure.
Courts have heard domain name disputes and made orders granting control and ownership over a disputed domain name/s to a trademark owners in addition to awarding the trademark owner damages for any monetary loss they may have suffered in addition to legal costs.
Court actions have been taken against cybersquatters involving several causes of action. A trademark owner will often sue the domain name holder for the tort of passing off, trademark infringement (trademark dilution in the United States), and misleading or deceptive conductive under Competition and Consumer Act 2010. (Cth)
THE ANTI-CYBERSQUATTING CONSUMER PROTECTION ACT US 1999
The United States enacted cyberspecific legislation in the form of the Anti-Cybersquatting Consumer Protection Act 1999 (ACPA) in an attempt to protect American businesses from having their trademarks being diluted by bad faith registration. There are other countries which have also enacted cyberspecific legislation similar to the United States ACPA. All marks, registered trademarks, unregistered trademarks and personal names are protected under the Act.
The results a Court can reach under the ACPA can be very different from what would occur where the Uniform Domain-Name Dispute Resolution (UDRP) procedure is used to resolve a domain name dispute where there was a legitimate registration followed by subsequent abuses. Unlike under the ACPA, under para 4(a)(3) of the UDRP Policy, bad faith in BOTH the registration and use of the domain name is required to be proved. The auDRP domain name dispute resolution policy, which applies in Australia, does not require the name to have been registered AND used in bad faith for a claimant to succeed. All that is required is for the claimant to prove is that the domain name was registered OR used in bad faith. The ACPA, like the auDRP Policy, states that bad faith use alone is enough for a claimant to succeed, even where there is an absence of bad faith registration. The ukDRP is similar to the auDRP, whereas the CDRP allows a claim of bad faith only in the registration of the domain name.
The ACPA has extraterritorial effect, meaning that foreigners are liable to US law with respect to international domain name disputes. For instance in Harrods Ltd v Sixty Internet Domains, the Plaintiff, a company incorporated in England, brought action against a corporation registered in Buenos Aires in respect of the registration of 60 internet domain names with Network Solutions Inc, which was located in Virginia. Harrods sued to stop the use of domain names it alleged violated its world famous Harrods trademark. The ACPA allows a lawsuit in the US federal court in the jurisdiction where the domain name is registered.
This means famous trademarks with international acclaim and recognition like Harrods will be protected on the internet against foreign nationals who claim trademark rights in their own country.
In UDRP proceedings a dispute can only result in the cancellation or transfer of a domain name to the trademark holding, whereas Court actions under the ACPA can result in recovery of up to $100,000 per domain name in damages from the cybersquatter as well as legal costs and fees.
In court actions a trademark owner can recover profits generated by the domain name owner’s use of the name, damages for loss suffered from harm to the trademark’s value and court costs. In assessing an appropriate award of damages, under the ACPA, it is open to the court to award up to three times the amount of actual damages. Attorney fees are more likely to be awarded where there are exceptional circumstances, for instance where there has been a wilful or malicious use of a trade mark.
The trademark owner does not have to prove the amount of actual damages suffered and is able to just request the payment of statutory damages up to $100,000. The ACPA enables a trademark owner to take action for dilution of a trademark in addition to traditional trademark infringement. Under the ACPA there is no need for the trade mark owner to demonstrate that the disputed trade mark has been used in commerce.
The scope and application of the ACPA is therefore much broader than traditional trade mark infringement which occurs on the internet. If someone has possession of a domain name the trademark owner can bring an action against the domain name owner, provided they can demonstrate bad faith on the part of the domain name registrant. A court is also likely to find that a domain name registrant acquired or used a name in bad faith where there is evidence of an attempt to divert customers from the trademark owner’s website to another either the purposes of commercial gain or to tarnish or harm their goodwill.
The disadvantage of initiating court action, whether under the ACPA or in another country’s court system, are the legal costs and the significant delays involved in achieving a resolution from the date of filing through to the final order being made. There may even be a problem with the registration and enforcement of a judgement which has been obtained by a trademark owner against the domain name owner.
In summary, the US ACPA gives a party a cause of action where they can establish that the domain name holder has registered, trafficked or used a domain name which is confusingly similar to, or dilutes the value of their trademark or personal name. “Trafficking” is broadly defined and extends to “sales, purchases, loans, pledges, licenses, exchanges of currency, and any other transfer for consideration or receipt in exchange for consideration.” Therefore any transaction by which the domain name owner generates value may be caught by the ACPA.
The ACPA requires that the trademark be distinctive or famous at the time of registration for the trade mark owner to succeed in an action. The Applicant must establish a number of factors including that the domain name was registered or used in bad faith by the domain name holder by reference to a list of factors which are set out under the ACPA.
These factors include whether the registrant’s trademark, other intellectual property rights, legal or common name are reflected in the disputed domain name. Other factors considered include the extent of the domain name registrant’s prior use, if any, of the domain name in connection with the good faith offering of goods and services, any good faith non-commercial or fair use of the mark within the site using the domain name, and any offers made by the owner to transfer, sell or assign the name to either the trademark owner or a third party for financial gain without having used the mark in connection with a legitimate website.
The Court can also take into account whether the domain name registrant has provided misleading or false contact information when they applied for registration of the domain name, whether they have registered or acquired multiple domain names which are confusingly similar or identical to other marks, and the extent to which the mark in the domain name is either distinctive or famous.
The ACPA doesn’t prevent the fair use of trademarks or any use protected by the First Amendment which includes fan sites and gripe sites. Domain name holders have registered websites incorporating a famous trademark into their domain name as a form of protest against the trademark owner, their products or practices.
Free speech rights have limitations. A trademark owner may or may not be able to protect it’s trademark against such a site, whether under the ACPA in court proceedings or under the UDRP rules in an administrative online procedure. United States law has stronger free speech rights than other countries due to the existence of first amendment rights protecting free speech.
There is a belief that the National Arbitration Forum (NAF), a US panel arbitrator, has a more pro-free speech tilt than other World Intellectual Property Organisation (WIPO) panelists, and therefore that a gripe site will stand a better chance of succeeding if a dispute is arbitrated by the NAF. There are limits to free speech and it is possible that copyright and/or defamation laws may also interfere with a domain name registrant’s right to register a suck site in relation to a particular trademark.
Even where it is very clear to users who land on a website that a site is a review or gripe site, the website could still be at risk of being de-registered because of the content which appears on the website which tarnishes or dilutes the value of the trademark. This could be be due to content which either misleads or confuses a consumer to believe that there is some form of association, sponsorship or affiliation between any goods and/or services appearing on the website and the trademark owner. Alternatively, a trademark owner could argue that the content on the website tarnishes the goodwill in their trademark by associating it with undesirable images which appear on the website.
Whilst United States law allows fair use of trademarks, with parody being a potential defence to dilution, websites that have attempted to claim this defence have sometimes been found by US Courts not to have been engaged in good faith use of the website for this purpose. Sometimes this can be explained by the fact that the courts have found the site to be commercial in nature.
For example in the case of Lamparello v. Falwell the Court held that the ACPA had been violated as a result of the use of a typo website at the domain Fallwell.com, upon which appeared content critical of the Reverend Jerry Falwell’s views on homosexuality. The website informed users of the existence of a book which was relevant to the topic of homosexuality with an affiliate link to Amazon where users could purchase the book.
This case can be compared with the case of Mayflower Transit, LLC v Dr. Brett Prince where a US Court held that the defendants use of the plaintiff’s mark in the domain names of a non-commercial website critical of the plaintiff did not offend the ACPA as it constituted a good faith non-commercial use of the trade mark. A website which is merely critical of a trademark owners’ goods and/or services does not qualify as a commercial use. The Court formed the view that the defendant wasn’t motivated by an intention to use his website to make money, rather his intention was to express condemnation of the Plaintiff’s conduct.
In the case of People for the Ethical Treatment of Animals (PETA) v Doughney the defendant was held to have violated the ACPA for registering the Plaintiff’s trademark PETA in the domain name www.peta.org. The defendant contended, unsuccessfully, that his site, called “People Eating Tasty Animals” was a parody of the the plaintiff organisation PETA. The Court rejected the defence because the domain name containing the plaintiff’s mark did not appear simultaneously with that feature of the site containing the parody.
Legendary battles have occurred between powerful brands and suck sites. For instance, upon learning that the trademark owner Verizon had pre-empted the registration of a suck site by registering the domain name Verizonsucks.com, the domain name registrant, a hacker’s magazine registered the names Verizonreallysucks.com and verizondoesreallysuck.com Verizon’s attempts to obliterate any offending websites by threatening to sue under the ACPA backfired, resulting in the magazine registering even more variations of names they had already registered.
A website which reflects a trademark for non-commercial purposes, claiming to be a review website by spotlighting a business’ practices, products or personnel, it is less likely to be de-registered. This is only the case where consumers wouldn’t be confused into thinking the domain name holder was in any way associated with, endorsed, sponsored or affiliated with the company that owns the website.
Domain name owners have been able to protect their entitlement to domain names where they can show that they were making good faith non-commercial use of the trademark. There have been a number of cases in which domain name registrants have proven to the satisfaction of a court that their motive for registering the domain name in dispute was to express their dissatisfaction with a particular product or service through the internet.
There are some advantages and disadvantages in bringing court proceedings rather than filing a domain name dispute under the UDRP Dispute Resolution Policy. As stated above court proceedings are complex, costly and result in significant delays, although this may be offset by the ability to obtain damages for the loss of value to a trademark and legal costs. However usually a domain name registrant will not be found liable for injunctive or monetary damages unless the claimant can prove bad faith or careless disregard for the trademark owners’ rights.
A further difficulty associated with court proceedings, whether in the United States Courts under the ACPA or other country’s court systems, are the complexities associated with jurisdictional questions as to where the dispute is most appropriately held. Different nation courts have made different rulings as to the most appropriate location for trial. In some cases Courts have held the appropriate location is where the parties reside, or where the server through which the domain name is registered is located.
The ACPA appears to have offered a US tailor made solution for trademark owners wanting to bring trademark disputes in US Federal Courts. As long as the trade mark owner can demonstrate the trademark is protected by US law, they can bring an action under the ACPA irrespective of the domain name holder’s physical location.
The ACPA enables trade mark owners to recover their domain names even when the cybersquatter is located in another country, or even where they cannot be identified.
Such actions are referred to as in rem actions. This is a term used to describe court proceedings brought against a thing, in this instance, against a domain name as distinct from an action brought against a person or an entity. This feature of the legislation recognises the reality that cybersquatters will frequently have incorrect contact information when a whois search is conducted to protect them from potential legal action. Under normal circumstances, a person who cannot be located wouldn’t be able to be sued in a US Court. To take advantage of the in rem provision the trademark owner must take specific steps to satisfy the courts that the domain name registrant cannot be located.
The trademark owner can file an in rem action against the domain name within the jurisdiction where the domain name registrar or registry is situated, if they can satisfy a Court the domain name violates the trademark owner’s rights and and the trademark owner was unable to obtain in personam jurisdiction over the domain name registrant after using reasonable efforts.
In rem jurisdiction depends on the location of the gTLD Registrar. The court must have authority over the registry or registrar which holds the domain registration. It becomes more complicated where the relevant registrar is a foreign registrar as distinct from a US registrar. The ACPA is a useful tool for trademark owners where there is certainty that a US court will be able to claim jurisdiction and that any orders it makes can be enforced.
The limitation of an in rem action is that the plaintiff cannot claim monetary damages and is limited to the remedy of having the domain name either cancelled or transferred to them.
Where a trademark owner has managed to identify and locate the cybersquatter who is located in the United States or has significant contacts with the United States, the trademark owner can bring an in personam claim under the ACPA. The term in personam is used to describe court action taken against a person and allows the trademark owner to obtain a court order for damages in addition to an order seeking the transfer of the domain name.
DOMAIN NAME DISPUTES UNDER THE UDRP POLICY
A trademark owner may find it is more convenient and beneficial to file a complaint under the Internet Corporation for Assigned Names and Numbers (ICAAN) Uniform Dispute Resolution Policy (UDRP), an administrative procedure which is both cost effective and expeditious.
The UDRP process was developed by ICANN for the resolution of domain name disputes, and applies to all .biz, .com, .info, .name, .net, and .org top-level domains as well as some country code top-level domains.
As stated above, Australia has a slightly different policy under the auDRP rules which are applied to the resolution of Australian country code top level domains. Under the auDRP a trademark owner need only prove that the domain name was registered OR used in bad faith by the domain name registrant, a lesser burden than under the UDRP.
Whenever a person registers a domain name, that person agrees by subscribing to the terms of the policy that they will not infringe upon or otherwise violate the rights of any third party, and consent to participate in UDRP arbitration should a third party assert ownership rights in their domain name.
An administrative panel of one or three members selected from an international body of Internet law practitioners acts as the arbiter of the dispute in an online hearing. A decision is typically issued less than 45 days after the filing of a complaint. A party who has filed a UDRP complaint and loses the dispute under the UDRP procedure can still bring legal action in the courts under local laws.
The UDRP process has come under criticism as favouring large corporations and being overly generous in it’s decisions to trademark owners.
As stated above, trademark owners elect to launch court action under the ACPA or pursuant to local laws in courts, as court action offers them more remedies than the UDRP procedure does, which can only result in the cancellation or transfer of the domain name. However the UDRP procedure and the ACPA’s in rem action only allows for cancellation or transfer of a domain name as a remedy where damages can’t be recovered. Trademark owners are more likely to bring an ACPA action when they seek damages or predict the domain name owner will appeal an adverse UDRP ruling if they are unsuccessful. The losing party under the UDRP procedure has ten days within which to mount a challenge to a UDRP ruling.
However the ultimate success of recovery of monetary damages in court proceedings depends on the domain name registrant being able to be identified, located, and the any court judgement obtained being able to be successfully executed against them which they are able to satisfy.
DOMAINING AND THE ACPA
The ACPA anticipated the purchase of domain names for the purpose of resale to trade mark owners but did not contemplate the practice known as ‘domaining‘. The line between lawful domain name ownership and cybersquatting is not always a clear one.
Domainers register words or phrases based upon their speculation that they may be sought after by new companies or interests, which many would argue is a legitimate and imaginative practice as distinct from bad faith trafficking in trademarked domain names.
A UDRP complaint is initiated by a complainant filing a petition with a WIPO approved dispute resolution service provider. The Arbitrator notifies the Respondent of the complaint by serving a copy of it upon the technical, administrative, and billing contacts, setting a deadline of twenty days for the filing of a Response. Often Respondents will fail to respond to notices under the UDRP procedure.
If the Respondent does file a response, an additional submission can be filed by the Complainant in response to the Respondent’s arguments in support of their case. This gives the complainant the opportunity to review the other party’s answer and grounds of defence. Typically, a decision will be rendered within 50 to 70 days of a complaint being filed.
Paragraph 15(a) of the Rules state that the Panel must decide a complaint on the basis of the statements and documents submitted in accordance with the Policy, these Rules and any rules and principles of law that it deems applicable.
Where a Respondent fails to respond to a dispute the Rules state that the Panel shall decide a proceeding on the basis of Complainant’s undisputed representations under 5(e), 14(a) and 15(a) of the Rules, and may draw such inferences it considers appropriate pursuant to paragraph 14(b) of the Rules. In the absence of any Response by the Respondent, it is appropriate for a Panel to accept as true all reasonable allegations and inferences put forward in the Complaint
WHAT MUST THE COMPLAINANT IN A UDRP PROCEEDING PROVE IN ORDER TO SUCCEED IN A DOMAIN NAME DISPUTE?
Paragraph 4(a) requires that the Complainant must prove each of the following three elements to obtain an order that a domain name should be cancelled or transferred:-
(i) The domain name is identical or confusingly similar to a trademark or service mark in which the complainant has rights;
(ii) The registrant does not have any rights or legitimate interests in the domain name; and
(iii) The registrant registered the domain name or is using it in “bad faith.”
Therefore within the complaint the trademark owner will usually set out the basis of the trademark rights it asserts in the relevant trademark. This will involve the Complainant preparing submissions and assembling any exhibits necessary to support the substance of their case prior to filing it, as no oral testimony is allowed and all disputes are determined based upon written submissions.
The Policy doesn’t require the trademark to be registered in the country in which the respondent operates. It is sufficient if the complainant can demonstrate trademark rights in some jurisdiction. The Complaint would then need to establish that the domain name is either identical or confusingly similar to the mark the complainant has rights in.
The domain name doesn’t have to be identical to the trademark. For instance if a domain name owner fully incorporates the complainant’s trademark and adds a generic name and top level domain name, this may not be sufficient to differentiate the disputed domain name from the complainant’s trademark. Therefore a Panel will often find confusing similarity where the domain name in dispute contains the identical mark of the complainant combined with a generic word or term.
After the Complainant satisfies 4(a)(i), the burden of proof then shifts to the Respondent to demonstrate it has rights or legitimate interests in the disputed domain name under 4(a)(ii). Panels have found a Respondent’s failure to submit a Response can in and of itself, amount to an indication of Respondent’s lack of rights or legitimate interests.
However even where a Respondent fails to submit a Response, a Panel will often still evaluate the record to determine whether Respondent has rights or legitimate interests in the disputed domain name under 4(a)(ii).
The Respondent may assert that it is commonly known by the disputed domain name or that it is using the domain name for a good faith legitimate offering of goods or services or is making fair use of the domain name.
A recurring submission by Complainants is that the Respondent uses the disputed domain name to offer Internet marketing services that use internet keywords to attract customers, and that these services are related to Complainant’s goods and/or services. This may involve submitting evidence as to what website the domain name resolves to and what kind of content appears on the website with a view to demonstrating commercial use of a confusingly similar domain name resolving to a website featuring their trademark.
If the trademark owner successfully proves all three points, the domain name can either be cancelled or transferred to the complainant trademark owner. If the trademark owner fails to prove one of these points, the administrative panel will not cancel or transfer the domain name.
The use of the domain name and Complainant’s trademark to sell products in competition with the complainant is not regarded as a fair or legitimate use. A finding that a Respondent uses a confusingly similar domain name to divert Internet users to its website to offer products and/or services that compete with the Complainant is sufficient to also establish bad faith or abusive registration pursuant to para 4(a)(iii).
HOW CAN A DOMAIN NAME OWNER CAN PROVE A LEGITIMATE INTEREST OR RIGHT IN A DOMAIN NAME?
A domain name owner can establish a legitimate interest or right in a domain name by demonstrating either use or preparations to use the domain name in connection with a good faith offering of goods or services prior to any notice of the dispute.
A legitimate use may also be establish where the domain name owner has also been commonly known by the relevant second level domain name, or alternatively is making legitimate non-commercial or fair use of the domain name. It will also assist a domain owner if there is no evidence of intent to derive commercial gain, mislead, divert consumers or tarnish the trademark.
WHAT KINDS OF FACTORS WILL A PANEL CONSIDER IN ASSESSING BAD FAITH?
In a UDRP proceeding, a panel will consider factors such as whether the registrant registered the domain name primarily for the purpose of selling, renting or otherwise transferring the domain name registration to the complainant owner. They will also consider whether the domain name was registered to prevent the owner of the trademark from reflecting the mark in a corresponding domain name, and/or whether the domain name owner has engaged in a pattern of such conduct in the past. Other considerations are whether there is any evidence the registrant has intentionally attempted to attract internet users to the registrant’s website for commercial gain, by creating a likelihood of confusion with the complainant’s mark.
A list of UDRP domain name decisions can be found here.
There are trademark companies which provide specialist domain name dispute services on a flat fee basis as an alternative to using a legal firm.