In the era of modern commerce, the success of a business is often driven by technology and its web presence, and it has become easier than ever to purchase a domain name from an internet domain registrar, making ownership available to the masses. This has increased the number of disputes that arise between an owner of a registered trademark and an owner of a domain name. While many of these disputes are in good faith and resolved through a negotiated settlement, many are arising because individuals are intentionally trying to “ransom” these domain names to the highest bidder. In these situations, it is important to know your rights under the Anti-Cybersquatting Consumer Protection Act (“ACPA”) and the Uniform Domain Name Dispute Resolution Policy (“UDRP”).
The ACPA was enacted in 1999 and designed to protect trademark owners from domain name cybersquatters, but it requires the trademark to be distinctive and/or famous prior to the purchase of the domain name, and the purchase to be in bad faith. Although the distinctiveness and fame element is governed by traditional trademark rules, courts haven’t isolated exactly what constitutes bad faith in this context. By way of example, in ZP No. 314, LLC v. ILM Capital, LLC, No. 1:16-cv-00521-B (S.D. Ala. Sept. 30, 2019), the court decided that bad faith did not include “parking” on the domain name. In this case, the infringing business purchased the domain name with the sole intent of profiting from the other businesses distinctive mark. However, since the mark did not become “distinctive and famous” until after the infringing business stopped actively using the domain name, the court determined that this was not bad faith, despite being critical of its own opinion on the matter.
An alternative remedy for a trademark owner is to seek protection through the UDRP, which is run by the Internet Corporation for Assigned Names and Numbers (“ICANN”). Similar to the ACPA, to obtain relief, the trademark owner must follow a specific process and meet the required elements. The process and the elements are different than the ACPA, but have significant overlap. For a business seeking to enforce its trademark rights against the owner of a domain name, the path to obtaining relief requires careful analysis and planning, especially because the courts continue to adjust to modern commerce.
VW Contributor: Alex Rainville
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