Internet Domain Names – Part 1: An Introduction

As you start and grow your business and its online presence, you should be aware of the legal issues related to Internet domain names. A domain name is a valuable asset to your business as a branding and marketing tool. That is why it is important to understand legal rules related to Internet domain names and actions you can take to dispute domain names that infringe upon your trademark rights.

This first part of our two-part series on Internet domain names will introduce basic concepts about domain names and domain name dispute resolution. The second part of our series will provide a more detailed discussion on pursuing legal action against owners of domain names that infringe upon your trademark.

Domain Names Defined

A domain name is “the address of a web site that is intended to be easily identifiable and easy to remember,” such as www.create-legal.com. Companies often use their business names or other words and phrases associated with their businesses as domain names so that people can identify the businesses with the websites and more easily access the content of their websites.

Trademarks vs. Domain Names

A trademark is “a word, name, symbol, or device that is used in trade with goods to indicate the source of the goods and to distinguish them from the goods of others.” Although trademarks and domain names are not synonymous, the two areas intersect when there is an issue of whether use of the domain name becomes a trademark violation.

According to the United States Patent and Trademark Office (USPTO), “use of a domain name only as part of a web address does not qualify as source-indicating trademark use, though other prominent use apart from the web address may qualify as trademark use. Registration of a domain name with a domain name registrar does not give you any trademark rights.” The mere registration of a domain name does not give you trademark rights on the name, but use of the domain name through such actions as publishing and promoting the domain name may rise to the level of trademark use. You should be make sure the domain name you are using and promoting for your business does not contain a trademarked name belonging to someone else who has not given you permission to use it. Trademark violations occur when there is “confusion in the marketplace,” when a consumer could confuse the business represented by the domain name with another business represented by a trademark contained in the domain name.

Domain Name Disputes

Domain name disputes often involve companies battling over the ownership of Internet domain names from entities known as “cybersquatters.” Cybersquatting is “the pre-emptive registration of trademarks by third parties as domain names.” Some cybersquatters register domain names with the intention of selling them at high prices to the companies who own the trademarks. Other cybersquatters exploit domain names by taking advantage of the online traffic that popular brands attract and misdirecting consumers to the cybersquatters’ own websites for such business as selling counterfeit goods.

Domain Name Disputes in the Creative Industry

Domain name disputes are particularly prevalent in the fashion industry. Gucci frequently takes legal action against cybersquatters who target Gucci’s trademarked name. In 2012, Gucci won over 100 domain names by bringing 6 cases to the World International Property Organization(WIPO), an international dispute resolution agency for domain name disputes.In its disputes before WIPO, Gucci claimed that it should own the domain name registrations to websites such as ‘cheapguccionsale.com’ and ‘guccishoponline.org.’ Because these websites use Gucci’s trademarked name, Gucci successfully argued that the cybersquatters infringed on Gucci’s trademark rights by creating consumer confusion and exploiting Gucci’s name to sell goods that are most likely counterfeit. Other famous luxury brands, including Swarovski, Burberry, Cartier and Dior, have also recently taken legal action against cybersquatters.

The Anti-Cybersquatting Consumer Protection Act (ACPA) of 1999

Challenges to a domain name can be made through the US federal courts by filing a lawsuit under the Anti-Cybersquatting Consumer Protection Act (ACPA) of 1999. ACPA allows  individuals and companies to challenge domain names that are similar to their business names and other trademarks. ACPA makes it “illegal to register, ‘traffic in’ or use a domain name that is identical or confusingly similar to a distinctive or famous mark ‘or which dilutes a famous mark‘”.Under ACPA, a mark is distinctive if “the consumers have come to recognize it as the source or origin of certain goods or services.”In addition, “traffic in” refers to transactions “involving the domain name that generates value for the cybersquatter.”If a trademark owner successfully wins a claim under the ACPA, a court order would be granted that requires the domain be transferred back to the trademark owner. In certain cases, payment of monetary damages could also be ordered in addition to the transfer of ownership.

Uniform Domain-Name Dispute-Resolution Policy (UDRP)

Alternatively, lawsuits can be avoided by utilizing the Uniform Domain-Name Dispute-Resolution Policy (UDRP) created by the Internet Corporation for Assigned Names and Numbers (ICANN), a non-profit corporation that manages and controls domain name registrations. There are several dispute resolution providers approved by ICANN, with WIPO being the most commonly used provider. UDRP provides a relatively quick and less expensive legal mechanism to resolve a domain name dispute by providing a streamlined procedure to transfer or cancel ownership of domain names. The resolution method may be more ideal for those who want to avoid costly and lengthy litigation in foreign jurisdictions because “it does not matter whether the trademark owner and domain name holder live in different countries.”

Choose Your Domain Name Wisely

Anyone can register a domain name as long as it has not already been taken. However, just because a domain name is available does not mean that you are legally permitted to use it for promoting your own business. Domain name registrars such as GoDaddy do not perform any trademark ownership verification before registering a new domain name for you so it is your responsibility to consider intellectual property matters. If you register and use a domain name that infringes upon another person’s trademark, you could face a lawsuit under ACPA or mediation/arbitration under UDRP. Before registering a domain name, you should search the Trademark Electronic Search System (TESS) to see if the name or phrase you are using for your desired domain name has already been trademarked.

For more information on pursuing legal action against owners of domain names that have infringed upon your trademark, be sure to read Part 2 of our domain name series to be posted next week. Connect with us on Twitter and Facebook to be the first to know when this post is up!