Internet Domain Names – Part 2: ACPA and UDRP

We highlighted the Anti-Cybersquatting Consumer Protection Act (ACPA) and the Uniform Domain Name Dispute Resolution Policy (UDRP) in Part 1 of our Internet Domain Name series. These are two legal mechanisms you can use to challenge a domain name that infringes on your trademark. We will now take a closer look at ACPA and the UDRP and discuss what you need to show in order to prevail in a domain name dispute.

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

If you find that a domain name is infringing on your trademark, you can dispute the registration by filing a lawsuit in US federal court under ACPA. To prevail under ACPA, you must prove the following factors: “(1) that the mark is valid; (2) the website owner registered the site in bad faith in order to profit from the mark; (3) the mark was distinctive when the site was registered; and (4) the domain is identical or confusingly similar to the mark.”

Among the considerations of the court when evaluating Factor #2, whether the domain name was registered in bad faith in order to profit from the mark, include:

1. The trademark or other intellectual property rights of the person, if any, in the domain name;
2. 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;
3. The person’s prior use, if any, of the domain name in connection with the bona fide offering of any goods or services;
4. The person’s bona fide noncommercial or fair use of the mark in a site accessible under the domain name;
5. 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;
6. 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;
7. 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;
8. 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
9. 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 Section 1125(c)(1) of the Lanham Act.

A“bona fide use” or “bona fide offering of goods or services” refers to a genuine intent to sell a good or service under the domain name as opposed to using the domain name to deceive consumers for commercial gain. Should you prevail under ACPA in your domain name dispute, the court may order the cancellation or transfer to you of the disputed domain name. You may also be able to receive monetary damages from the opposing party who infringed on your trademark.

Uniform Domain-Name Dispute-Resolution Policy (UDRP)

A legal action under the UDRP is relatively quicker and less expensive than under ACPA because it does not involve litigation. Rather, a legal claim submitted pursuant to UDRP is handled through arbitration, a form of alternative dispute resolution that is legally binding but does not involve filing a lawsuit and conducting a court trial.

In order to prevail in a UDRP arbitration, you must prove the following elements:

• The domain name is identical or confusingly similar to a trademark or service mark in which the complainant has rights; and
• The domain name owner has no rights or legitimate interests in respect of the domain name; and
• The domain name has been registered and is being used in bad faith.

Among the circumstances that show Factor #3, that the domain name is being used in bad faith, include:

• The domain was registered primarily for the purpose of selling it to the complainant or a competitor for more than the documented out-of-pocket expenses related to the name;
• The domain was registered in order to prevent the mark owner from using it, provided that the registrant has engaged in a pattern of such registration;
• The domain was registered primarily to disrupt the business of a competitor; and
• By using the domain, the registrant has intentionally attempted to attract users for commercial gain by creating a likelihood of confusion as to source or affiliation.

Domain name owners can argue that they do have a legitimate right or interest in the domain name. Among the defensive arguments include:

• Their use or preparations to use the domain name or a name corresponding to the domain name in connection with a bona fide offering of goods or services
• They (as an individual, business, or other organization) have been commonly known by the domain name, even if they have acquired no trademark or service mark rights; or
• They are making a legitimate noncommercial or fair use of the domain name, without intent for commercial gain to misleadingly divert consumers or to tarnish the trademark or service mark at issue

Should you prevail under the UDRP in your domain name dispute, the arbitrator may order the cancellation or transfer to you of the disputed domain name. However, under UDRP arbitration, you are not able to receive monetary damages from the opposing party who infringed on your trademark.

ACPA vs. UDRP

When deciding on which legal mechanism to use in a domain name dispute, you should consider the facts of your case, your legal budget, and your desired remedies. For a faster and less expensive process, the UDRP may be the preferred method. An UDRP proceeding can take about 6 weeks because there is less paperwork and no court trials. As a result, legal fees can be as low as $1500, substantially less than filing an ACPA lawsuit. However, because a successful UDRP claim for a trademark owner only awards a cancellation or transfer of the domain name, those who want additional monetary damages should consider filing a lawsuit under ACPA.

Depending on the complexity of your domain name dispute, it may be preferable to file a legal claim under ACPA because the UDRP is intended for simple disputes, and “not intended to resolve complex trademark infringement questions.” Additionally, under the ACPA, courts may require the infringing party to pay you monetary damages that range from $1,000 to $100,000 for each infringing domain name. But you must be financially prepared if you file a lawsuit under ACPA because lawsuits are time consuming and expensive.Also, because ACPA is US law, the lawsuit must be filed in the US and your business must have substantial ties to the US. In contrast, the UDRP is a global policy developed by the Internet Corporation for Assigned Names and Numbers (ICANN) whose dispute resolution providers are available to claimants internationally.

Domain Names Disputes for Personal Names

ACPA was also intended to protect against the unauthorized use of a domain name that is confusingly similar to the name of another living person. A person who registers and uses a personal name within a domain name with a bad faith intent to exploit the personal name “shall be liable in a civil action by the owner of a mark.” UDRP, on the other hand, only safeguards personal names that are protected by a trademark. Trademarks do not always apply to personal names, so you should carefully consider the facts of your domain name dispute over a personal name before deciding whether to pursue legal action under ACPA or the UDRP.

For more information on domain names, read Part 1 of our Internet Domain Name series and visit these resources:

Anti-Cybersquatting Consumer Protection Act (ACPA) of 1999
Uniform Domain Name Dispute Resolution Policy
World Intellectual Property Organization (WIPO)
Internet Corporation for Assigned Names and Numbers (ICANN)

Have you ever dealt with a domain name dispute? How was your experience? Let us know by commenting below or connect with us on Twitter and Facebook.