Cybersquatting

The cybersquatting law is also called the Anticybersquatting Consumer Protection Act or the ACPA.

  • Cybersquatting cases are a tool for trademark owners to seize later registered domain names that are registered by domain pirates in bad faith with regard to a given domain name.
  • Cybersquatting does not apply to domains registered before a matching trademark or domains put to a legitimate use.
  • Bad faith examples:
    • Trying to sell the domain name back to a trademark holder.

Cybersquatting Law:

The Anti-Cybersquatting Consumer Protection Act establishes civil liability for both “cyberpiracy” and “domain hijacking” in a federal district court in the United States of America.

Cybersquatting Definition:

In a cyberpiracy complaint, a plaintiff must prove that:

(1) the defendant registered, trafficked in, or used a domain name;

(2) the domain name is identical or confusingly similar to a protected mark owned by the plaintiff; and

(3) the defendant acted “with bad faith intent to profit from that mark.”

In a relevant part, the statute reads:

(d) Cyberpiracy prevention

(1) (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 mark, including a personal name which is protected as a mark under this section; and

(ii) registers, traffics in, or uses a domain name that —

Cybersquatting Examples

(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

(III) is a trademark, word, or name protected by reason of section 706 of title 18 or section 220506 of title 36.
15 U.S.C. § 1125(d)(1)(A).

Cybersquatting Bad Faith

(B)
(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 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;
(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 of multiple 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; and
(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).
(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.

15 U.S.C. § 1125(d)(1)(B)

(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.

RDNH Domain Hijacking and the Cybersquatting Law

If someone engages in domain hijacking, using ICANN’s Uniform ‭Domain Name‬ Dispute Resolution Policy‬‬ “UDRP” at either WIPO or the NAF, they can also be liable to the domain owner under the ACPA for statutory damages of “not less than $1,000 and not more than $100,000 per domain name, as the court considers just” and court costs and attorney’s fees.

Some UDRP Complainants engage in a pattern of harassing domain name owners by making unsupportable demands based on faulty claims or by asserting a fraudulently obtained trademark. A punitive award is sometimes appropriate in a Court’s discretion, depending on a defendant’s assets and the extent of the defendant’s over-reaching.

By way of reference, 15 U.S.C. § 1117(d) authorizes, in cases “involving a violation of section 1125,” an election of damages in the courts discretion of “not less than $1,000 and not more than $100,000 per domain name, as the court considers just.”

A case involves a violation of 1125(d)(1) when a domain owner is seeking a determination that it was not violated section 1125.
Hence, a domain owner is entitled to statutory damages in an amount between $1,000 and $100,000 within the discretion of a Court.

In the alternative, the statutory damage guidelines provide a symmetric guideline for a court to consider in relation to an appropriate range of damages under the ACPA generally which is believed to be of deterrent and precatory effect to cybersquatters.

Examples of Cybersquatting:

There are many cybersquatting cases against people or businesses who register a well-known trademark as a domain name, and then attempts to profit in bad faith by either:

  1. Selling the domain name back to the trademark holder, or (2) using the domain name to divert, business from the trademark holder.
  2. Using the domain name to divert, business from the trademark holder.

Other cybersquatting cases involve a business partner or a web developer who registered a domain name in their own name instead of the business name. DSPT Intern., Inc. v. Nahum (9th Cir. 2010) 624 F.3d 1213

Defenses to Cybersquatting Cases

There are often valid defenses to cybersquatting cases, such as:

  • Legitimate use: In Delta Faucets vs. Delta Airlines, who gets delta.com?
  • Extraterritorial defense, so there is no bad faith if use is in a different country.
  • Fair use in a comment or criticism site
  • A parody website that criticizes the original work that it refers to, usually in a fun and entertaining way.
  • No likelihood of confusion, due to disclaimers (usually works, with some exceptions)
  • Dictionary names with low distinctiveness.
  • Generic names about a product or a service.
  • Short acronyms that could be legitimately used for so many different organizations.
  • Geographic location names or descriptions.
  • Laches: Most jurisdictions have limitation periods of 2 to 4, but the WIPO UDRP panelists say that 13 years is too long to bring a case.

Cases Awarding Damages for RDNH under ACPA for Not-Cybersquatting

Cybersquatting Cases

These points of authority do not necessarily reflect the views of the writer. This blog is not legal advice. These posts are just notes.

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