Domain Name Disputes
Legal Guide for Domain Name Disputes
This legal guide will help you take action when confronted with domain name infringement. Important strategic decisions must be made before taking formal action to recover an infringing domain name. These decisions can determine whether you win or lose.
1. Preparing for a Domain Name Dispute
If you’re considering any type of domain name dispute, you probably looked at your search results and learned that some infringer is capitalizing on your brand name by using the same or similar domain name to promote competing goods and services. Cybersquatting can be a potentially lucrative business. For example, if a popular domain existed such as THISISANEXAMPLE.COM, a cybersquatter could register THISISAEXAMPLE.COM and try to profit from the goodwill previously established by the domain holder. The slight difference in spelling could confuse consumers, and thus drive traffic away from the legitimate site and hurt their business. In such a case, a domain name dispute is an option worth pursuing.
Assuming you have found one or more infringing domain names, it’s time to take action. However, preparation is key.
The first question is: Do you have a registered trademark? If the answer is yes, you are 90% there already. Domain name disputes are much easier to win if you already own a trademark registration for the brand name – preferably with the United States Patent and Trademark Office (USPTO). If not, all is not lost. Unregistered or “common law” trademarks can be legally enforced, it will just require more effort, and the chances of winning decrease substantially. If you are serious about protecting your brand name from infringers, it is essential to secure a trademark registration. So if you found infringers and you do not yet have a registration, consider getting those ducks in a row first, before launching any formal legal action.
Once you’ve considered the status of your own trademark rights, it is time to compile evidence to be used in the infringement action. At a minimum, you should copy and save any web pages published by the infringer. Preserving all of the evidence of infringement is important, so consider using a program or browser plug in that saves the entire web pages with full functionality. Evidence of past infringement can occasionally become important, so consider using archive.org for that purpose, if available. Also preserve evidence of the domain registration from the WhoIs Database. With this evidence in hand, along with your trademark rights, you are ready to consider your legal options.
2. Choosing the Right Legal Vehicle
There is no one-size-fits-all solution for domain name infringements. However, if you are solely focused on obtaining the domain name(s) at issue, and have no interest in monetary compensation, a Uniform Domain Name Resolution Procedure (UDRP) arbitration is the logical choice. The arbitration complaint can generally be filed with the World Intellectual Property Organization (WIPO) or the National Arbitration Forum (NAF). There are different procedures associated with different types of domains, allowing for various kinds of relief. Most commonly, the trademark holder will file a complaint seeking transfer of the domain. The process takes about 2-3 months from filing to domain transfer. The entire procedure takes place in writing, and there are no personal appearances or telephone conferences. Sometimes, the trademark holder can pursue an expedited proceeding which involves suspension or cancellation of the domain, instead of transfer. Those proceedings can be resolved in weeks, not months. The cost of a typical domain name arbitration, using a single arbitrator, ranges from $1200 – $1500, depending on the arbitration service. Using a panel of 3 arbitrators is more expensive.
The other option available to victims of domain name infringement is a lawsuit asserting claims under the Lanham Act and/or the Anti-cybersquatting Consumer Protection Act (ACPA). These federal statutes allow a trademark holder to recover a domain name along with attorneys fees, court costs, and (under the ACPA) statutory damages up to $100,000. No monetary compensation is available in a UDRP arbitration. However, lawsuits require time and money. It can take 2 years (or more) for a federal case to conclude, assuming neither side appeals. Ultimately, the decision on which legal vehicle to use comes down to considerations of time, money, and the remedy sought.
Regardless of the decision on litigation versus arbitration, some effort to resolve the claim informally should occur before formal action is taken. Sometimes, a cease and desist letter from a respected domain name attorney can result in a voluntary transfer of the domain without the necessity of legal action. Even if the demand does not produce results, the failure to respond to a cease and desist letter can be helpful evidence in arbitration or litigation.
3. Winning the Case
Once the appropriate forum is selected, it is time to craft the best legal arguments. Each case is different, but generally a complainant should be able to produce evidence of either registered or common law trademark rights before the infringer registered the domain, along with the lack of any legitimate rights by the infringer. In addition, proof of bad faith use and/or registration of the domain by the infringer is an important element in these cases. While proving bad faith sounds like a high hurdle, registration of a confusingly similar domain, in a competing class of services after trademark rights are established, will often be sufficient. Even if the domain is not being actively utilized online, bad faith use can be established in other ways, such as through phishing schemes. Research regarding prior, similar cases is essential to prevail in a domain name dispute. When pursuing a UDRP case, review of published UDRP decisions can help formulate arguments for effective drafting of the complaint. Occasionally, you may find prior infringement decisions issued against the same infringer. Citation of decisions supporting your legal theories is critical to bolster your case. Naturally, hiring an experienced domain name attorney will also increase your chances of success.
4. Recovering the Domain
The procedure for recovering the infringing domain name is different in a UDRP arbitration compared to a Lanham Act / ACPA case. If you prevail in a UDRP case, the registrar which sold the domain name will be obligated to transfer the domain to the prevailing party, 10 days after the issuance of the decision. Typically, the complainant will set up an account with the registrar, and the domain will be pushed into that account after the 10 day waiting period. However, if the losing party files a lawsuit challenging the UDRP decision within the 10 day waiting period, the domain will be locked by the registrar until the court decides the issue. As a practical matter, UDRP decisions are rarely challenged in court.
If you obtain the infringing domain by winning a federal lawsuit, the method of transfer will be decided by the judge. Usually, that takes the form of an injunction requiring the registrar or registrant to transfer the domain. If the losing party decides to appeal the trial court’s decision, the domain transfer could be put on hold pending the results of the appeal. The status of the domain registration during the appeal will be decided by the courts.
A company’s brand name is often its most valuable asset. Domain infringers and typo-squatters can earn handsome revenues by violating trademark rights. But there are effective legal remedies. Trademark holders can acquire infringing domain names through negotiation, arbitration, or litigation. Regardless of the method chosen, infringers should not be ignored. Trademark holders who tolerate open infringement of their brand risk losing valuable rights through waiver or estoppel theories. Effective policing of infringement and pursuit of infringers will help protect your valuable trademark rights and maintain the integrity of your brand.