A plaintiff's trademark must be "famous" in order to qualify for protection under the Dilution Act. In determining whether a mark is sufficiently "famous," courts look to a number of factors, including: the distinctiveness of the mark; the duration and extent of use and promotion of the mark; the geographical extent of the trading area where the mark is used; the degree of recognition of the mark; the extent of third-party use of similar marks; and whether the mark has been registered in the U.S. Patent and Trademark Office.
The amendments, parts of which are retroactive, apply to any trademark and are designed to penalize and prevent "bad faith intent" to profit from someone else's trademark by registering a related domain name. Cybersquatters who offer to sell domain names to trademark owners at a markup or who actually use a domain name in a way that damages the goodwill of a company's trademark will be forced to relinquish the domain name if "bad faith intent" can be proven.
prove that the domain name holder has a bad faith intent to profit from the mark
prove that the person registers, traffics in, or uses a domain name in a way that harms the owner's commercial interests.
In the case of a distinctive mark, the owner must show that the domain name is identical or confusingly similar to its mark.
In the case of a "famous" mark, the owner must only prove that the domain name is "dillutive" of its mark.
Bad Faith can be proven according to the nine non-exclusive factors included in the Act. Some of them are:
the extent to which the mark is the legal name of the person or is commonly used to identify that person
the domain name holder's prior lawful use of the mark
the person's intent to divert consumers from the mark owner
any offers to sell the domain name to the mark owner (the "email" proof, as is usually by keeping that communication offering the domain that the "blackmailing" or, at least, intent to profit has been frequently proven).
The purpose of the Act is to provide a “measured and balanced response” to the “problems faced by owners of famous marks when dealing with the issue of domain names.” H.R. Rep. 106-412, at 5. The Act amends Section 43 of the Lanham Act, 15 U.S.C. § 1125, by adding a subsection (d). To prevail under the Act, the owner of a trademark or service mark must meet two requirements. First, the owner must prove that the domain name holder has a “bad faith intent to profit” from that mark. 15 U.S.C. § 43(d)(1)(A)(i). Second, the owner must demonstrate that the person “registers, traffics in, or uses a domain name” in a way that harms the owner’s commercial interests. 15 U.S.C. § 43(d)(1)(A)(ii). In the case of a “distinctive” mark, the owner must show that the domain name is “identical or confusingly similar” to its mark. Id. In the case of a “famous” mark, the owner need only show that the domain name is “dilutive” of its mark. Id.
cybersquatters who register but do not use the domain name.
Intellectual Property Rights (copyright)
The EC has already produced a proposed draft directive on the protection of copyright and related rights in the information society, which attempted EU harmonisation of these rights. It is unclear, however, how this directive and the existing copyright laws of Members States will offer protection against the wholesale pirating of copyright material over networks in general and the Internet in particular.
Therefore, until such time as there are enforceable, legal measures to protect copyright material, and thus a rightholder’s/ author’s right of remuneration, self-regulation (eg by ISPs’ Codes of Practice) and, indeed, self-protection (eg by encryption, scrambling, tattooing, watermarking of copyright material) appear the only realistic means of protection at present.
US Code as of: 01/23/00
Sec. 1114. Remedies; infringement; innocent infringement by printers and publishers
(1) Any person who shall, without the consent of the registrant -
(a) use in commerce any reproduction,
counterfeit, copy, or
colorable imitation of a registered mark in connection with the sale, offering for sale, distribution, or advertising of any goods or services on or in connection with which such use is likely to cause confusion, or to cause mistake, or to deceive; or
(b) reproduce, counterfeit, copy, or colorably imitate
registered mark and apply such reproduction, counterfeit, copy, or colorable imitation to labels, signs, prints, packages, wrappers, receptacles or advertisements intended to be used in commerce upon or in connection with the sale, offering for sale, distribution, or advertising of goods or services on or in connection with which such use is likely to cause confusion, or to cause mistake, or to deceive, shall be liable in a civil action by the registrant for the remedies hereinafter provided. Under subsection (b) hereof, the registrant shall not be entitled to recover profits or damages unless the acts have been committed with knowledge that such imitation is intended to be used to cause confusion, or to cause mistake, or to deceive.
As used in this paragraph, the term ''any person'' includes the United States, all agencies and instrumentalities thereof, and all individuals, firms, corporations, or other persons acting for the United States and with the authorization and consent of the United States, and any State, any instrumentality of a State, and any officer or employee of a State or instrumentality of a State acting in his or her official capacity. The United States, all agencies and instrumentalities thereof, and all individuals, firms, corporations, other persons acting for the United States and with the authorization and consent of the United States, and any State, and any such instrumentality, officer, or employee, shall be subject to the provisions of this chapter in the same manner and to the same extent as any nongovernmental entity.
(2) Notwithstanding any other provision of this chapter, the remedies given to the owner of a right infringed under this chapter or to a person bringing an action under section 1125(a) or (d) of this title shall be limited as follows:
(A) Where an infringer or violator is engaged
solely in the
business of printing the mark or violating matter for others and establishes that he or she was an innocent infringer or innocent violator, the owner of the right infringed or person bringing the action under section 1125(a) of this title shall be entitled as against such infringer or violator only to an injunction against
(B) Where the infringement or violation
complained of is
contained in or is part of paid advertising matter in a
newspaper, magazine, or other similar periodical or in an
electronic communication as defined in section 2510(12) of title 18, the remedies of the owner of the right infringed or person bringing the action under section 1125(a) of this title as against the publisher or distributor of such newspaper, magazine, or other similar periodical or electronic communication shall be limited to an injunction against the presentation of such advertising matter in future issues of such newspapers, magazines, or other similar periodicals or in future transmissions of such electronic communications. The limitations of this subparagraph shall apply only to innocent infringers and
(C) Injunctive relief shall not be available to
the owner of the right infringed or person bringing the action under section
1125(a) of this title with respect to an issue of a newspaper, magazine, or
other similar periodical or an electronic communication containing infringing
matter or violating matter where restraining the dissemination of such
infringing matter or violating matter in any particular issue of such
periodical or in an electronic communication would delay the delivery of such
issue or transmission of such electronic communication after the regular time for such delivery or transmission, and such delay would be due to the method by which publication and distribution of such periodical or transmission of such electronic communication is customarily conducted in accordance with sound
business practice, and not due to any method or device adopted to evade this section or to prevent or delay the issuance of an injunction or restraining order with respect to such infringing matter or violating matter.
· (I) A domain name registrar, a domain name registry, or other domain name registration authority that takes any action described under clause (ii) affecting a domain name shall not be liable for monetary relief or, except as provided in subclause
(I) A domain name registrar, a domain name
regardless of whether the domain name is finally determined to
infringe or dilute the mark.
(II) A domain name registrar, domain name
registry, or other
domain name registration authority described in subclause (I) may
be subject to injunctive relief only if such registrar, registry,
or other registration authority has -
(aa) not expeditiously deposited with a court,
in which an action has been filed regarding the disposition of the domain
name, documents sufficient for the court to establish the court's control and authority regarding the disposition of the registration and use of the domain name;
§ (bb) transferred, suspended, or otherwise modified the domain name during the pendency of the action, except upon order of the court; or
§ (cc) willfully failed to comply with any such court order.
(ii) An action referred to under clause (i)(I)
is any action of
refusing to register, removing from registration, transferring,
temporarily disabling, or permanently canceling a domain name -
· (I) in compliance with a court order under section 1125(d) of this title; or
(II) in the implementation of a reasonable
policy by such registrar, registry, or authority prohibiting the registration
of a domain name that is identical to, confusingly similar to,
or dilutive of another's mark.
(iii) A domain name registrar, a domain name
registry, or other domain name registration authority shall not be liable for
damages under this section for the registration or maintenance of a domain name
for another absent a showing of bad faith intent to
profit from such registration or maintenance of the domain name.
(iv) If a registrar, registry, or other
registration authority takes an action described under clause (ii) based on a
knowing and material misrepresentation by any other person that a domain name
is identical to, confusingly similar to, or dilutive of a
mark, the person making the knowing and material
misrepresentation shall be liable for any damages, including costs and attorney's fees, incurred by the domain name registrant as a result of such action. The court may also grant injunctive relief to the domain name registrant, including the reactivation of the domain name or the transfer of the domain name to the domain name registrant.
(v) A domain name registrant whose domain name
has been suspended, disabled, or transferred under a policy described under
clause (ii)(II) may, upon notice to the mark owner, file a civil action to
establish that the registration or use of the
domain name by such registrant is not unlawful under this chapter. The court may grant injunctive relief to the domain name registrant, including the reactivation of the domain name or transfer of the domain name to the domain name registrant.
(E) As used in this paragraph -
(i) the term ''violator'' means a person who
violates section 1125(a) of this title; and
(ii) the term ''violating matter'' means matter that is the subject of a violation under section 1125(a) of this title.
Sec. 1125. False designations of origin, false descriptions, and dilution forbidden
(a) Civil action
(1) Any person who, on or in connection with any goods or services, or any container for goods, uses in commerce any word, term, name, symbol, or device, or any combination thereof, or any false designation of origin, false or misleading description of fact, or false or misleading representation of fact, which -
(A) is likely to cause confusion, or to cause
mistake, or to
deceive as to the affiliation, connection, or association of such
person with another person, or as to the origin, sponsorship, or
approval of his or her goods, services, or commercial activities
by another person, or
(B) in commercial advertising or promotion,
nature, characteristics, qualities, or geographic origin of his
or her or another person's goods, services, or commercial
activities, shall be liable in a civil action by any person who believes that he or she is or is likely to be damaged by such act.
(2) As used in this subsection, the term ''any person'' includes any State, instrumentality of a State or employee of a State or instrumentality of a State acting in his or her official capacity. Any State, and any such instrumentality, officer, or employee, shall be subject to the provisions of this chapter in the same manner and to the same extent as any nongovernmental entity.
(3) In a civil action for trade dress infringement under this chapter for trade dress not registered on the principal register, the person who asserts trade dress protection has the burden of proving that the matter sought to be protected is not functional.
Any goods marked or labeled in contravention of the provisions of this section shall not be imported into the United States or admitted to entry at any customhouse of the United States. The owner, importer, or consignee of goods refused entry at any customhouse under this section may have any recourse by protest or appeal that is given under the customs revenue laws or may have the remedy given by this chapter in cases involving goods refused entry or seized.
(c) Remedies for dilution of famous marks
(1) The owner of a famous mark shall be entitled, subject to the principles of equity and upon such terms as the court deems reasonable, to an injunction against another person's commercial use in commerce of a mark or trade name, if such use begins after the mark has become famous and causes dilution of the distinctive quality of the mark, and to obtain such other relief as is provided in this subsection. In determining whether a mark is distinctive and famous, a court may consider factors such as, but not limited to -
(A) the degree of inherent or acquired distinctiveness of the mark;
(B) the duration and extent of use of the mark in connection with the goods or services with which the mark is used;
(C) the duration and extent of advertising and publicity of the mark;
(D) the geographical extent of the trading area in which the mark is used;
(E) the channels of trade for the goods or services with which the mark is used;
(F) the degree of recognition of the mark in the trading areas and channels of trade used by the marks' owner and the person against whom the injunction is sought;
(G) the nature and extent of use of the same or
similar marks by third parties; and
(H) whether the mark was registered under the Act of March 3, 1881, or the Act of February 20, 1905, or on the principal register.
(2) In an action brought under this subsection, the owner of the famous mark shall be entitled only to injunctive relief as set forth in section 1116 of this title unless the person against whom the injunction is sought willfully intended to trade on the owner's reputation or to cause dilution of the famous mark. If such willful intent is proven, the owner of the famous mark shall also be entitled to the remedies set forth in sections 1117(a) and 1118 of this title, subject to the discretion of the court and the principles of equity.
(3) The ownership by a person of a valid registration under the Act of March 3, 1881, or the Act of February 20, 1905, or on the principal register shall be a complete bar to an action against that person, with respect to that mark, that is brought by another person under the common law or a statute of a State and that seeks to prevent dilution of the distinctiveness of a mark, label, or form of advertisement.
(4) The following shall not be actionable under this section:
(A) Fair use of a famous mark by another person
commercial advertising or promotion to identify the competing
goods or services of the owner of the famous mark.
(B) Noncommercial use of a mark.
(C) All forms of news reporting and news commentary.
(d) Cyberpiracy prevention
(A) A person shall be liable in a civil action by the owner of a mark, including a personal name which is protected as a mark under this section, if, without regard to the goods or services of the parties, that person -
(i) has a bad faith intent to profit from that
a personal name which is protected as a mark under this section;
(ii) registers, traffics in, or uses a domain name that -
(I) 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;
(II) 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
(i) In determining whether a person has a bad faith intent described under subparagraph (A), a court may consider factors such as, but not limited to -
(I) the trademark or other intellectual property rights of the person, if any, in the domain name;
(II) the extent to which the domain name consists of the legal name of the person or a name that is otherwise commonly used to identify that person;
(III) the person's prior use, if any, of the
domain name in
connection with the bona fide offering of any goods or services;
(IV) the person's bona fide noncommercial or fair use of the mark in a site accessible under the domain name;
(V) the person's intent to divert consumers from
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;
(VI) the person'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 person's prior conduct indicating a pattern of such conduct;
(VII) the person's provision of material and
misleading false contact information when applying for the registration of the
domain name, the person's intentional failure to maintain
accurate contact information, or the person's prior conduct
indicating a pattern of such conduct;
(VIII) the person's registration or acquisition
domain names which the person 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;
(IX) the extent to which the mark incorporated in the person's domain name registration is or is not distinctive and famous within the meaning of subsection (c)(1) of this section.
(ii) Bad faith intent described under subparagraph (A) shall not be found in any case in which the court determines that the person believed and had reasonable grounds to believe that the use of the domain name was a fair use or otherwise lawful.
(C) In any civil action involving the registration, trafficking, or use of a domain name under this paragraph, a court may order the forfeiture or cancellation of the domain name or the transfer of the domain name to the owner of the mark.
(D) A person shall be liable for using a domain name under subparagraph (A) only if that person is the domain name registrant or that registrant's authorized licensee.
(E) As used in this paragraph, the term ''traffics in'' refers to transactions that include, but are not limited to, sales, purchases, loans, pledges, licenses, exchanges of currency, and any other transfer for consideration or receipt in exchange for consideration.
(A) The owner of a mark may file an in rem civil action against a domain name in the judicial district in which the domain name registrar, domain name registry, or other domain name authority that registered or assigned the domain name is located if -
(i) the domain name violates any right of the
owner of a mark registered in the Patent and Trademark Office, or protected
under subsection (a) or (c) of this section; and
(ii) the court finds that the owner -
(I) is not able to obtain in personam
jurisdiction over a
person who would have been a defendant in a civil action under paragraph (1); or
(II) through due diligence was not able to find a person who would have been a defendant in a civil action under paragraph (1) by -
(aa) sending a notice of the alleged violation
to proceed under this paragraph to the registrant of the
domain name at the postal and e-mail address provided by the
registrant to the registrar; and
(bb) publishing notice of the action as the court may
direct promptly after filing the action.
(B) The actions under subparagraph (A)(ii) shall constitute service of process.
(C) In an in rem action under this paragraph, a domain name shall be deemed to have its situs in the judicial district in which -
(i) the domain name registrar, registry, or
other domain name
authority that registered or assigned the domain name is located;
(ii) documents sufficient to establish control
and authority regarding the disposition of the registration and use of the
domain name are deposited with the court.
(i) The remedies in an in rem action under this paragraph shall be limited to a court order for the forfeiture or cancellation of the domain name or the transfer of the domain name to the owner of the mark. Upon receipt of written notification of a filed, stamped copy of a complaint filed by the owner of a mark in a United States district court under this paragraph, the domain name registrar, domain name registry, or other domain name authority shall -
(I) expeditiously deposit with the court
documents sufficient to establish the court's control and authority regarding
the disposition of the registration and use of the domain name to the court;
(II) not transfer, suspend, or otherwise modify the domain name during the pendency of the action, except upon order of the court.
(ii) The domain name registrar or registry or other domain name authority shall not be liable for injunctive or monetary relief under this paragraph except in the case of bad faith or reckless disregard, which includes a willful failure to comply with any such court order.
· (3) The civil action established under paragraph (1) and the in rem action established under paragraph (2), and any remedy available under either such action, shall be in addition to any other civil action or remedy otherwise applicable.
· (4) The in rem jurisdiction established under paragraph (2) shall be in addition to any other jurisdiction that otherwise exists, whether in rem or in personam.
The term ''dilution'' means the lessening of the capacity of a famous mark to identify and distinguish goods or services, regardless of the presence or absence of -
(1) competition between the owner of the famous
mark and other
(2) likelihood of confusion, mistake, or
The term ''colorable imitation'' includes any mark which so resembles a registered mark as to be likely to cause confusion or mistake or to deceive.
The term ''registered mark'' means a mark registered in the
They Sold the Internet, and All I Got Was This Lousy Cease and Desist Letter - Protecting Yourself from the "Cyberpiracy Prevention Act"
November 29, 1999 marked a sad day for the Internet; not because a major transcontinental backbone was accidentally cut by construction workers, not because of Y2K, and not because Amazon.com failed to ship holiday gifts on time. The Internet and all who use it suffered because one of its foundational values, the right to free speech, was lost in a vital area - domain names.
Erosion of the right to free speech through domain names began with the first dispute policy enacted by Network Solutions, registry of all domain names in the .com, .org and .net generic top level domains (or gTLDs). This dispute policy was created at the behest of special interests who rushed to capitalize on the "new" medium of the Internet. Unfortunately, in their haste, the ideals that had made the Internet so vibrant and resilient an area were largely forgotten. As large corporations entered the online world, seeking to translate the names they had used in other spheres, some found a shock. These names had already been taken - "stolen," they believed, by others who had seen the promise of the Internet sooner. In some cases, these "first comers" were out for financial gain. In many others, however, they were simply interested in a catchy name to use for their electronic mail, file transfers, or even for primitive web pages.
These special interests prevailed up on Network Solutions (under the threat of lawsuits that would have crushed the company back in 1995) to formulate a dispute policy whereby trademarks would be king. If they held a trademark, regardless of what class of services or products the trademark was limited to, they could take control of a domain name away from the holder, without proving infringement. This new dispute policy was invoked now and again, but in rather small numbers compared with the number of newcomers flocking to the Internet in droves. New users set up small web sites, registered domain names, and explored the beginnings of how business could be done "in cyberspace." In 1995, there were far fewer companies and Internet entrepreneurs who were savvy enough to stake a claim than there are today. Each passing month brought thousands more. As the medium grew, more Internet service providers, more individuals, more schools, churches, non profit organizations, AND businesses found the Internet, and signed on.
As time went on, and millions of domain names were registered, and billions of dollars worth of "e-commerce" was being conducted over the Internet, the dispute policy of Network Solutions was not enough for the special interests groups. Enter the trademark lawyers. The job of a trademark lawyer is to defend his or her client's trademarks. In the United States, this means diligent monitoring of trademarked words or phrases to make sure that nobody else is using them in ways that are similar to the markholder's use. By and large, this is a job that trademark lawyers do very well. When they find someone whom they believe is "infringing" on their trademark, they generally send what is called a "cease and desist" letter, making various threats against the alleged infringer in hopes that they will give up use of the word or phrase. Please note that an important part of trademark infringement law is that the alleged infringer must generally be using the name in a similar way to the mark holder's use (as in using a similar word or phrase for similar products or services). Trademark law, at least in the United States (and many other jurisdictions) allows for many different individuals or companies to hold a trademark in the same word or phrase, just so long as they are using it for different things.
Trademarks are very important in our world. Sometimes they are essential to let the consumer know the true source of a product or a service. You rightly expect that an electronic device labeled "SONY" was manufactured by the Sony Corporation. But SONY is a fairly unique name, in that it was invented to describe what its founder envisioned as a new world of electronic devices. There are many other names (first or last names, nicknames, mythological names, geographical names, concepts) that were in common use long before they were trademarked. As a result, it's quite common for a name to be trademarked by several different entities, and for those trademark owners to coexist peacefully with each other and with hundreds or even hundreds of thousands of others who use the name in different ways - as a nickname, say, or as the name of a pet. Thus, trademarks provide two kinds of protection. On the one hand, they prevent confusion by placing limitations on the use of a word or phrase; on the other, they protect alternative uses of the mark by limiting the scope of the mark holder's claim - to a specific area, for example, or a specific line of business.
Here, of course, was the crux of the problem. The Internet is made up of thousands of private networks, each "speaking" to the others using two common networking protocols. The protocol responsible for telling everyone else your Internet "identity" (your address) is called "Internet Protocol" abbreviated as IP. IP doesn't care about your domain name. You can still get from machine to machine by using solely the IP number, or address. For example, 126.96.36.199 is the server machine in my network, netpolicy.com. Early Internet architects figured out a long time ago that "netpolicy.com" would be easier to remember than 188.8.131.52. Thus "domain names" were born.
Given that the Internet was operational in close to its current form since sometime around 1969, and given that most of these special interests hadn't heard anything about it until about 1995, that's quite a bit of time for people to have chosen domain names and develop their electronic identities. It is no wonder that after 1995 when these "newcomers" began choosing their own domain names, they found that many were already in use by others. Some were "legitimate" uses, such as using one's real name or initials, or a whimsical word like "panix" or "wizvax," or an animal name like "toad" or "cavebear.
In the beginning of this "land rush" to obtain just the right Internet domain name in one of these generic categories, or Top Level Domains (gTLDs) there is no doubt that many individuals figured that if they registered a name that someone else might want, maybe they could sell the name and make money. This, in effect, is similar to knowing that your neighbor covets the little lot between your two houses, but you move first when it is up for sale and snap it up, only to sell it to your neighbor for an extra profit. This is largely the American way, capitalizing on the law of supply and demand. You may have done something rude, but you are not stopping your neighbor from purchasing land elsewhere, nor are you forcing him to pay your "profit." This type of use of domain names did and does occur in small numbers on the Internet. Network Solutions, Inc., the largest registrar of domain names provided the following number: [fill them in here]. Thus, for the huge number of domain name registrations, less than [x]% are disputed.
There are other uses of trademarked words and phrases that are permitted in the United States. In most cases, so long as you are not trying to confuse the public as to the source of your product or service, you can use a word or phrase in a "noninfringing manner." You can also use a trademarked word or phrase to identify a competitor's product for comparisons, for reasons of parody, commentary, opinions, and for many other reasons. Not so on the Internet. On November 29, 1999 the President signed the "Trademark Cyberpiracy Prevention Act."
The Balancing Act
There has always been a balance between the First Amendment right to freedom of speech and the rights of commercial entities to have exclusive use of a word or phrase in connection with a product or service. The important distinction is that the word or phrase is ONLY protected in connection with products or services. It is NOT protected from use in book titles, license plates, newspaper headlines, street addresses, children's names, and in a myriad of other uses. The Cyberpiracy Prevention Act explodes that important distinction in its second section. Sec. 3002 (d)(1)(A) says "A person shall be liable in a civil action by the owner of a mark, including a personal name which is protected as a mark, under this section, if, without regard to the goods or services of the parties, that person [...] (emphasis added).
The little phrase "without regard to the goods or services of the parties" is what makes this law so dangerous. In no other medium are violations of trademark law addressed "without regard to the goods or services" that the trademarks are born from and defined by. Thus, in this medium alone, the balance between First Amendment and commerce is utterly shattered. Given that the Internet is the greatest source of communication ever invented, the misguided force of special interests could likely cut off the very "marketplace of ideas" and turn it into just another electronic shopping mall. Ironically, Sec. 3008 entitled "Savings Clause" states that "Nothing in this title shall affect any defense available to a defendant under the Trademark Act of 1946 (including any defense under section 43(c)(4) of such Act or relating to fair use) or a person's right of free speech or expression under the first amendment of the United States Constitution. Unfortunately, the law seems to pin the "bad faith" label on many who are using it in exactly that way - as free speech or expression.
It is interesting to note here that the Clinton Administration expressed its opposition to this bill and said it would be vetoed. Unfortunately, special interests attached the bill to a "must pass" appropriations bill. As there is no line item veto, this amendment was rammed through regardless.
Bad Faith Is Better Than No Faith At All
The entire Trademark Cyberpiracy Prevention Act turns on a rather tortured definition of "bad faith." In order to be found liable under this Act, the plaintiff must show first that the domain name registrant had a "bad faith intent to profit." While this might be seen as protective of first amendment rights, once we examine some of the factors that a court may use to determine "bad faith" we find that the "intent to profit" may not necessarily be monetary profit at all.
"(V) the person'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." (emphasis added)
So what does this mean? Does this mean that if a consumer gets confused by "oreosarebadforyou.com" that this is enough to be "bad faith?" What kind of consumer must be confused? How about "howtojoinaclu.org" being used to tell you why you shouldn't join the organization? In both cases, you tarnish or disparage the mark, and "harm the goodwill" represented by it. Since this entire Act is talking about domain names, are we now saying that the mere act of typing in a domain name into your Netscape or Internet Explorer browser window might cause a consumer to be confused if it isn't the site they originally were looking for? If that site is a commercial site in which the owner is reasonably expecting to make money, is this bona fide "bad faith?" Or instead, does the consumer have to actually go to the site and read it, then assess whether they are confused as to the source, sponsorship, affiliation or endorsement of a product or service associated with the site (the definition of infringement in other contexts)? Unfortunately, the answer to that question may well depend on the skills of the lawyers arguing the first cases.
Of particular note here is that the idea of "intent to tarnish or disparage" goes well beyond the concepts stated in any other portions of Section 1125 of Title 15 that this Cyberpiracy Protection Act is supposed to amend. In fact, in section 1125(c)(4) there are three important exceptions listed, none of which have come up very often on the Internet. These exceptions are:
* Fair use of a famous mark by another person in comparative commercial advertising or promotion to identify the competing goods or services of the owner of the famous mark
* Noncommercial use of a mark
* All forms of news reporting and news commentary
Other Examples of Bad Faith
Beware if you have registered a domain name, haven't put up a web site yet, and then are contacted by someone who claims rights to the name. If you decide to avoid litigation by proposing a settlement in which you are paid something, even if it is just a refund of the fee you paid to register the name, that could be interpreted as "bad faith." The provision in the law is:
"(IV) the person'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 person's prior conduct indicating a pattern of such conduct;"
It is quite interesting that this provision was written in this manner. Large corporations routinely register every possible variant of names of some of their products, names of the classes their products belong in (such as deodorant, flatulence, etc.) with no intent ever to use the domain names. However, because they do not offer these domain names for sale, they are not operating in "bad faith."
Perhaps the most interesting showing of "bad faith" however found in the Trademark Cyberpiracy Prevention Act is (d)(1)(B)(I)(VII). This provision states:
"(VII) the person's provision of material and misleading false contact information when applying for the registration of the domain name, the person's intentional failure to maintain accurate contact information, or the person's prior conduct indicating a pattern of such conduct,"
Unlike any other piece of intellectual property, domain names can be registered in "bad faith" if you simply forget to update the phone number on the 20 or so domains you hold. An utterly amazing possibility, but one provided for nonetheless.
So Now What?
Until a case questioning the constitutionality of the "Cyberpiracy Prevention Act" finally trickles its way through the court system, this law in all its glory, will be the law of the land. The question is, what can you do to protect yourself? Frankly, it's getting more and more difficult to protect oneself against monied interests who covet your domain name. In the "old days" the domain name holder's rights were trumped by a trademark on an identical string. This was a rather high hurdle to jump for the trademark owner, but if they could pass this barrier, the name was taken with very little recourse. It is difficult to tell whether the new regime is better or worse.
First and most importantly, know that the Act can be applied retroactively. However, the statutory damage provision of up to $100,000 cannot be applied to domain names registered prior to November 29, 1999. This means that if you are sued over your domain name, and the covetous party wants damages, they have to use traditional infringement or unfair competition criteria. If your domain name was registered after November 29, 1999 the covetous party may seek actual damages, or up to $100,000 in statutory damages against you. This is definitely something to think about.
If the covetous party chooses to use ICANN's Uniform Dispute Resolution Policy instead of the "Cyberpiracy Protection Act", the trademark owner has to pay for an arbitration proceeding where the domain name holder can present her case. On the other hand, the trademark holder generally chooses the forum most friendly to "traditional" intellectual property interests, WIPO. The domain name holder may not choose the provider of the arbitration services. The domain name holder CAN, however, opt for a panel of three to hear the case, but the domain name holder must then split the cost of the tribunal with the covetous party. Whether more arbitrators will provide the domain name holder with an advantage remains to be seen. There have not been enough cases decided to make a judgement on whether or not the arbitration panels are being "fair." Pleadings and complaints are not made public, further muddying the waters. You can actually go through the arbitration process without the assistance of an attorney, although that is not advised unless you are very aware of the current practices of domain name dispute law.
As with the "Anti Cybersquatting Act," one must show "bad faith" in order to prevail in an action brought under the UDRP. The trademark owner must also show that the domain name holder has no "rights or legitimate interests in respect of the domain name." This essentially means that recent cases like The Network Network (www.tnn.com) vs. The Nashville Network could theoretically not be brought under the UDRP, making a trademark holder's choices either the "Anti Cybersquatting Act" or a traditional suit in trademark infringement or dilution. The Network Network, first users of tnn.com, won that case and kept their domain name.
If you find yourself the target of a "cease and desist letter" (or letter in which another party demands you turn over a domain name for whatever reasons they decide on at the time) you should check carefully to see what is being threatened. Given current case law, it is very important to consult with an attorney BEFORE responding to the letter. Your response could give rise to a showing of "bad faith" and trigger either the UDRP or the "Anti Cybersquatting Act." Offering to sell the domain name, even for the price of your original registration, COULD put you at serious risk.
If the "legitimate interest" you have in your domain name is that you are interested in selling it to another party, you definitely should consult a lawyer. Think of it as a "cost of doing business." A lawyer knowledgeable in the current state of domain name dispute law can help you assess whether or not your speculation is dangerous to your financial health.
Some rather brave people are currently willing to put their money where their principles are. They are fighting the idea that anyone who has the same domain name that someone else has trademarked is automatically a "cybersquatter." Hopefully, these cases will show how misguided the "Anti Cybersquatting Act" and the UDRP truly are. Until then, build on your legitimate rights and interests in your domain name, and always keep your lawyer's email address handy.
Uncover State and "Common Law" Trademarks. A comprehensive report typically includes not only registered trademarks but also individual state trademark registrations and something called "common-law" sources. Each state maintains a trademark registry for marks that are used exclusively within that state's borders. Because rights to trademarks in the United States are created by use, a pre-existing state trademark holder can have superior trademark rights to you, even if you receive a federal trademark registration on your name at a later date. In addition to state trademarks, it is possible to develop so-called "common law" trademark rights to a mark solely through use. If you can show that you enjoy goodwill and name recognition to a product or service name, you can assert common law trademark rights without having registered the name as a trademark anywhere. Again, if another entity with a conflicting name has common law rights at the time you adopt and/or register your mark, that entity can also have superior rights to your name. The important conclusion to draw from this is the fact that a new name may conflict with a pre-existing trademark that can be found only at the state or common law level. Because of the importance of state and common law trademarks, a Comprehensive Search is designed to uncover similar and identical names in all 50 state trademark registries and in common law sources like yellow pages, business/brand name directories and domain names registrations
In considering the strength of your trademark, a helpful rule of thumb is to ask whether it would be fair to grant one entity the exclusive right to use a particular word in association with a certain type of good or service. If your proposed mark is so ordinary that it would be unfair to grant you a monopoly to prevent others from using the word in association with similar products, it is probably entitled to little or no protection under trademark law.
Patents, copyrights and trademarks are often referred to collectively as "intellectual property." Intellectual property is the set of legal rights to an expressed name or idea. It is property that results from the fruits of mental labor.
Trademark. A trademark is a word, phrase,
symbol or design, or combination of words, phrases, symbols or designs used to
identify the source and quality of a business product. For example, Nike
identifies a particular brand of athletic shoe. A service mark is the same as a
trademark except that it identifies and distinguishes the source of a service
rather than a tangible product. Generally, a trademark for goods appears on the
product itself or on its packaging; a service mark appears in advertising for
the services. The terms trademark or mark are used commonly to refer to both
trademarks and service marks. In short, a trademark allows you to protect the
goodwill that your business has earned in the marketplace.
Trade Names vs.
names or business names are the names used to identify a particular company or corporation.
Trademarks are names that identify a business's goods or services in the
marketplace. For example, Johnson & Johnson is the trade name of the
company that sells bandages under the trademark "Band-Aid." Business
names can become trademarks when they are used in the marketplace to identify a
product or service. For example, the computer giant Microsoft uses the
Microsoft name both as its corporate name and also as a trademark. Registering
a business name through state corporate name registration or state fictitious
business name registration secures the right to use that business name with
respect to bank accounts, debts, invoices, lawsuits, etc., but it does not
create (or affect) the right to use that name in the marketplace as a
trademark. If you advertise your products or services under your business name,
your rights to that use derive principally from trademark law.
Trademark Law. The body of law that
courts use to protect consumers from confusion regarding the source of products
and services and to prevent businesses from taking advantage of another
business's goodwill embodied in the names of its goods or services. If two
businesses are each using names for their goods or services that may lead to
confusion in the marketplace over the source of those goods or services,
trademark law will be applied to resolve the dispute. Trademark law
accomplishes this by granting one entity a legal monopoly to use, and exclude
others from using, a mark and confusingly similar marks in the market in which
that trademark is used. In order to be confusingly similar, conflicting marks
need not be identical and the goods and services associated with the marks do
not need to be the same. Trademark law derives from several sources, including
state and federal law.
How Trademark Rights are Acquired. Ownership of a trademark arises from use. As a general rule, first use establishes ownership. Businesses obtain ownership rights in a mark in a particular market by one of two principal means: 1) actual use of the mark to identify a product or service in the marketplace; or 2) filing a proper application to register the mark in the United States Patent and Trademark Office (PTO) based on a bona fide intent to make use of the mark on a product or service in the near future.