Trademark CybersquattingTrademark Cybersquatting is the practice of registering names, especially well-known company or brand names, as Internet domains, in the hope of reselling them at a profit to the trademark owner or a third party. The AnitCybersquatting Consumer Protection Act (“ACPA”) is a federal law enacted to thwart such cybersquatters who register Internet domain names containing trademarks with no real intent to create a website but instead with the bad faith intent to profit from the good will of a registered trademark.

Elements to Prove a Cybersquatting Case

A trademark owner must prove the following elements to bring a successful Cybersquatting Case:

  • The trademark infringement has a bad faith intent to profit from the trademark; and
  • Registers, traffics in, or uses a domain name that is:
  • identical or confusingly similar to that certain trademark (in the case of a trademark that is distinctive at the time of registration of the domain name);
  • identical or confusingly similar or dilutive of that certain trademark (in the case of a trademark that is famous at the time of registration of the domain name); or
  • a trademark, work, or name protected by federal statute.

Bad Faith Intent to Profit from a Trademark Key Element

The ACPA gives the courts some guidance to assist it in determining if the requisite bad faith exists.  Although not exhaustive, below is a list of some factors the courts consider in determining bad faith:

  • The trademark or other intellectual property rights of the infringer, if any, in the domain name;
  • The extent to which the domain name consists of the legal name of the infringer;
  • The infringer’s prior use, if any, of the domain name in connection with the bona fide offering of any goods or services;
  • The infringer’s bona fide noncommercial or fair use of the trademark in a site accessible under the domain name;
  • The infringer’s intent to divert consumers from the trademark owner’s online location to a site accessible under the domain name that could harm the goodwill represented by the trademark, either for commercial gain or with the intent to tarnish or disparage the trademark, by creating a likelihood of confusion as to the source, sponsorship, affiliation, or endorsement of the site;
  • The infringer’s offer to transfer, sell, or otherwise assign the domain name to the trademark 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 infringer’s prior conduct indicating a pattern of such conduct;
  • The infringer’s provision of material and misleading false contact information when applying for the registration of the domain name, the infringer’s intentional failure to maintain accurate contact information, or the infringer’s prior conduct indicating a pattern of such conduct;
  • The infringer’s registration or acquisition of multiple domain names which the infringer knows are identical or confusingly similar to trademarks of others that are distinctive at the time of registration of such domain names, or dilutive of famous trademarks of others that are famous at the time of registration of such domain names, without regard to the goods or services of the parties.

ICANN’s Uniform Dispute Resolution

Instead of suing in federal court under the ACPA, a trademark owner can choose to pursue an administrative proceeding under the Internet for Assigned Names and Numbers (“ICANN”)’s Uniform Domain Name Dispute Resolution Policy (UDRP). The UDRP allows a trademark owner to challenge domain name registrations in expedited administrative proceedings. In a UDRP proceeding, a victorious trademark owner receives an order from an arbitration panel that the domain name be cancelled or transferred to the trademark owner. A UDRP proceeding can be faster and cheaper for trademark owners than a lawsuit. However, some trademark owners prefer to bring ACPA claims because they offer more remedies than the cancellation or transfer of the domain name (the only remedies available under UDRP proceedings). Also, a suit under the ACPA may deter future cybersquatters more effectively than a UDRP proceeding.