Domain Names and Trademarks

Case Study Intro:

In this case Zuccarini purchased several domain names similar to Electronics Boutiques domain name www.electronicsboutique.com and ebworld.com. Zuccarini put up web sites under the misspellings electronicboutique.com, ebwold.com and other confusingly similar domains. His domains contained relentless advertisements and pop up windows which he was paid to display. Subsequently Electronics Boutique sued Zuccarini for alleged violation of the Anticybersquatting Consumer Protection Act. Electronics Boutique won the lawsuit because they were able to prove three vital violations of the ACPA.

Since the ACPA only protects famous or distinctive trademarks Electronics Boutique had to prove this was the case with their domain names. The court found in favor of Electronics Boutique because they had been using the name exclusively for over twenty years, spent millions in marketing the name and that no other entity had used the name. This made the trademark distinctive and famous.

Second, they had to prove that the domain names were "confusingly similar" to those of Electronics Boutique. Under the ACPA this condition must be met to find trademark violation. They found this to be the case because of Zuccarini's pattern of buying and profiting from domain name misspellings. The amount of domain names he owned increased the likelihood of a user to inadvertently type one of his domains and he will make profit from it.

Thirdly Electronics Boutique had to prove "bad faith" intent. They proved Zuccarini's intent to profit from registering and using similar domain names. The judge stated that it was "abundantly clear" that Zuccarini had full knowledge of Electronics Boutiques website and domain name and that he purposefully purchases similar domain names in order to profit from internet users misspelling of Electronic Boutiques domain names.

Additionally the judge ordered Zuccarini to pay the maximum amount allowable under the ACPA. $100,000 per domain name and Electronics Boutiques attorney fees and litigation costs. This is not typical however, the court found this case exceptional because of Zuccarini's pattern of buying hundreds of domain names for many trademarks, his lack of attention to numerous court orders and his intentional avoidance of the entire lawsuit. He allegedly hid in hotels, ignored certified mail and didn't answer his phone when he was being made aware of the lawsuits against him.

The Basics of Trademark Law

What is a Trademark

According to the Lanham Act a trademark includes:

"any word, name, symbol, or device, or any combination thereof used by a person... to identify and distinguish his or her goods, including a unique product, from those manufactured or sold by others and to indicate the source of the goods, even if that source is unknown."

Trademarks can vary in strength and the courts have defined them as follows in descending order

Arbitrary or Fanciful. Fanciful trademarks are those which have been made up, like newly made words. Lucent, Pepsi, Intel are some examples. Arbitrary means that the trademark in no way describes the service or product. Google, Yahoo, eBay are all examples of arbitrary trademarks. Arbitrary and fanciful trademarks are so strong because they require copious amounts of investment and time to create association between the public and the trademark
Suggestive. Suggestive trademarks indirectly describe the service they represent. Such as Win Book for notebook computers running windows.
Descriptive. Descriptive trademarks directly describe their service. The Weather Channel, Travelocity, and Mapquest fall under this category. For a descriptive name to be entitled to federal trademark protection a "secondary meaning" must be proven. A "secondary meaning" means that the relevant audience has created an association with the name and the services that the mark is used with.
Generic. Terms such as "cell phone" "monitor" "PC" and "modem" are generic and can not be protected under the act and can be used by anyone.

Applying for trademark registration

Similar to copyrights trademark rights arise from use rather than registration. It is unnecessary to file a trademark application to obtain rights, but there are certain advantages to doing so. According to the U.S. Patent and Trademark Office the advantages gained by registering your mark are:

Constructive nationwide notice of the trademark owners claim
Evidence of ownership
Jurisdiction of federal courts may be invoked
Registration can be used as a basis for obtaining registration in foreign countries
Registration may be filed with the US Customs Service to prevent importation of infringing foreign goods

The U.S. Patent and Trademark Office (PTO) oversees the federal trademark registration process. You can apply at their website. The office will then search for similar registered marks and services and often they will find one. Then you will receive an "office action" a non final rejection of the trademark. Another reason for an office action is that the mark is generic or descriptive. Either way you can respond to the trademark attorney to try and convince them that your application should be approved. This is why it is important to consult with a trademark attorney and have him or her do the filing for you. They will know the proper research and arguments to use to get your mark registered. Many trademark registrations don't get beyond the initial office action simply because a person applies themselves rather than using a qualified and knowledgeable attorney to file their claim.

An attorney will conduct an initial trademark search before hand allowing you to save some time and expense. Additionally thanks to the internet you can also do some initial searches on your own. The PTO website has a patent search area where you can do an initial search. There are some limitations to the patent offices website search. First you cant look for symbols, second it doesn't take misspellings into account. It wouldn't find "Pepsi" if you were to look for "pepsee". Also it's not always current. Though it is regularly updated there is a time gap and a legally registered mark may not be found. Also international marks, state marks and domain names will not be found.

After using the PTO's site, also look on-line and also look in WHOIS databases for domain name registration. Remember, if someone is using your mark as a domain name it may entitle them to trademark protection. Finally if you believe that your mark is valid, consult with a trademark attorney to proceed with the registration process.

Trademark Infringement

According to the Lanham Act trademark infringement occurs when someone

Uses in commerce any word, term, name, symbol, device or any combination thereof, or any false designation of origin, false or misleading description if fact, or false misleading representation of fact, which-
(A) Is likely to cause confusion or, or to cause mistake, or to deceive as to affiliation, connection, or association of such person with another person, or as to the origin, sponsorship, or approval of his or her goods, services or commercial activities by another person, or
(B)in commercial advertising or promotion, misrepresents the nature, characteristics, qualities, or geographic origin of his or her or another persons goods, services, or commercial activities.

"likely to cause confusion" is the key phrase. Trademarks are designed to protect the consumer from confusion. Its not easy to determine that the likelihood of confusion exists. Some guideline that courts have used are:

The Strength of the trademark as defined above. Stronger marks get more protection
Similarity between the plaintiffs trademark and the mark in question. The more similar generally the more likely that confusion will be found but even identical trademarks are not necessarily give likelihood of confusion
Similarity Of Services. Trademarks must be used with good or services so a company with a similar or identical trademark to another company which offers different goods or services may have a tough time proving their case
Evidence of actual confusion. The only thing that must be proven in a trademark case is that the mark is "likely to cause confusion". However proving that actual confusion has taken place or is taking place can be of utmost importance in proving a trademark case.
The degree of care likely to be exercised by consumers.
The marketing channels used. Whether or not the owner and alleged infringer used the same medium to promote their goods or services. Be it newspaper, radio, or TV. Online this factor is less important because usually both parties have an online presence.
The Intent of the alleged infringer. Even though trademark law is not necessarily there to protect a trademark owner, courts most certainly look unfavorably at a defendant who chooses a mark specifically to take business or customers away from the original owner

Trademark dilution

Trademark dilution was put into law in an amendment of the Lanham Act in 1995. Trademark dilution is a separate cause from infringement. A defendant can be found liable for infringement, dilution or both. Typically dilution protects the strength of a trademark even if there is no "likelihood of confusion". Either the defendant uses a trademark for a product that is contrary to the initial mark owners product or a defendant is using a trademark in such way that it dilutes the publics association of the trademark with the original product. Under the U.S. Anti-Dilution Act only "famous" marks may be diluted. Famous marks include coca-cola and Microsoft, but many not so well known marks have been found to be famous under the act. Especially if the defendant is acting in bad faith a court may go out of its way to find the mark famous.

Traditional Trademark Law and Domain Names

Domain names are an integral part of a companies on-line business. When a internet user types in ford.com or mtv.com they are obviously trying to reach the Ford Motor Company or MTV television channel's respective website. Trademark dilution and trademark infringement cases have decided this over and over in the courts. Domain name cases are decided under the same criteria used above in trademark infringement cases, including

The strength of the trademark
The similarity of the parties' services
The similarity of the trademark to the domain name
evidence of actual confusion
the degree of care likely to be exercised by consumers
The domain name registrants intent in choosing the domain name

These factors must be satisfied rather completely for a court to find in favor of the trademark owner in a domain name case.

Trademark Dilution and Domain Names

Trademark dilution in domain names has been tough to prove. Often as long as the domain name owner doesn't use the domain name for commercial use or try and sell the domain name they will win a trademark dilution case brought against them. However the ACPA (Anticybersquatting Consumer Protection Act) has made provisions making the "use in commerce" clause of the lanham act less significant for domain names.

Competing Trademarks and Domain Names

Ever wonder why www.nissan.com doesn't point to Nissan Motor Corp. website? Well it hasn't been easy for Uzi Nissan, the owner of Nissan Computer Corporation they have been sued by Nissan Motors almost incessantly since 1994 with the latest action on the case occurring in April of 2005 with the Supreme Court denying Nissan Motors petition for a "Writ of Certiorari". Nissan Computer Corporation was allowed to keep the domain name, as often is the case in these types of competing trademark cases, the "early bird gets the worm" theory often prevails.

If a company can get along and reach an out of court agreement sometimes a happy medium is reached. www.playtex.com and www.scrabble.com are examples of competing trademark owners sharing the same website. If you go to these sites you will see that the homepages are split in two sides, one for each of the trademark owners.

The Anticybersquatting Consumer Protection Act

The ACPA is a new act put into law in 1999 it offers a new legal recourse to trademark infringers using domain names to make a profit off of someone else's trademark. Though it os not the only law which can be evoked in a cyber squatting case it closes some loopholes in the old trademark law that cyber squatters were exploiting. Including not offering to sell the domain name, or offering disclaimers or ny simply holding on to and not using the domain name in question.

The U.S. Senate Judiciary Committee defines the purpose of the ACPA as:

"protect[s] consumers and American Businesses, to promote the growth of online commerce, and to provide clarity in the law for trademark owners by prohibiting the bad faith and abusive registration of Internet Domain Names with the intent to profit from the goodwill associated with such mark-- a practice commonly refereed to as 'cyber squatting'"

The Legal Requirements of the Anticybersquatting Act

The limitations of the ACPA are as follows:

The domain name registrant must have a "bad faith intent to profit from" a trademark, and
The Registrant must register, Traffic in or use a domain name that meets one of the following requirements.

1. 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.
2. 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
3. is a trademark, word, or name protected by certain sections of the U.S. Code (specifically the Red Cross and certain Olympic Marks)

The key to any ACPA claim is the first item listed above, it must be in "bad Faith". Since this aspect of trademark law is new The ACPA defines this with nine considerations the court may use in addition to any others it finds relevant:

the trademark or other intellectual property rights of the domain name registrant, if any, in the domain name
the extent to which the domain name consists of the legal name of the person or name that is otherwise used to identify that person
the domain name registrants prior use , if any, of the domain name in connection with the bona fide offering of goods or services.
The domain name registrants bona fide non-commercial or fair use of the mark in an accessible site under the domain name
the domain name registrant's intent to divert consumers from mark owners online location to a site accessible under the domain name that could harm the goodwill represented by the mark, either for commercial gain or to tarnish or disparage the mark, by creation likelihood of confusion as to the source sponsorship, affiliation or endorsement of the site.
the domain name registrants 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 persons prior conduct indicating a pattern of such use
The domain name registrant provision of material and misleading false contact information when applying for the registration of the domain name, the domain name registrants intentional failure to maintain accurate contact information, or the registrants prior actions indicating a pattern of such conduct
the domain names registrant's registration or acquisition of multiple domain names which he knows are identical or similarly confusing to marks of others that are distinctive at the time of registration of such domain names, without regard to the goods or services of the parties
the extent to which the mark incorporated in the domain name is or is not distinctive or famous

Violations of the ACPA can result in judgments from 1,000 dollars to 100,000 dollars per domain.

The Uniform Domain Name Dispute Resolution Policy

The UDRP is a policy adopted by ICANN that allows trademark owners who feel that they have been wronged by a domain registrant to file an out of court administrative dispute process. The UDRP applies to all global or generic top level domains (.com, .net, .org etc.) country specific and government domains are not enforceable under the act. You must agree to abide by the UDRP when registering a domain name with most major domain name registrars.

Given the complexity of the UDRP it is always advisable to consult an attorney who is familiar with this area of law if you want to use the UDRP or are a domain name registrant and have a complaint filed against you. The UDRP can be an effective tool to get domain name transferred to you or cancelled without going through expensive and lengthy court proceedings. To file a UDRP claim can cost as little as $1500

To file a complaint through the UDRP you should first determine if you satisfy the minimum threshold requirements these are:

The domain name in dispute must be identical or confusingly similar to a trademark or service to which you have rights
The domain name registrant must have no rights or legitimate interests in the domain name
The domain name must have been registered and used in bad faith

Under the policy it is your burden to prove that these conditions exist. To file the complaint you will need to select one of the approved dispute resolution service providers. They each offer their own advantages and disadvantages, so you and your layer can decide which one is best for your specific situation.

The complaint must be submitted in hard copy and electronic copy and conform to a long list of requirements. Among these are:

The manner in which the domain name is identical or confusingly similar to a mark in which the complainant has rights
why the domain name holder should be considered as having no rights or legitimate interest in respect of the domain name that is the subject of the complaint; and
why the domain name should be considered as having been registered and being used in bad faith

There are additional rigorous steps that a complainant must take which are outlined in the policy to contact the registrant of the disputed domain., This can be difficult due to the fact that most registrants will fake their WHOIS information when registering these types of domain names. Though the fact that the registration is false may be used by you to demonstrate "bad faith" it doesn't relieve the complainant of having to attempt to notify the registrant that a complaint has been filed.

The registrant who has a UDRP complaint filed against him must respond within twenty days in hard copy or the case is likely to be automatically decided in favor of the complainant.

How the Panelists Decide Cases Under the UDRP

the panel must decide if the three UDRP requirements have been met. First the panel decides on the first requirement of the complaint that a domain name is "confusingly similar or identical to a mark to which the complainant has rights"

Second the panel decides whether the respondent has "no rights or legitimate interest in respect if the domain name". The panel uses three main factors to determine this

did the respondent use or have demonstrable preparations to use the domain name or corresponding name in connection with bona fide goods or services
Has the respondent as a business, individual, or organization, been commonly known by the name even if it is not a registered trademark
Is the respondent making a legitimate fair use of the domain name for noncommercial purposes, without intent for commercial gain or to divert consumers or tarnish the mark at issue

They may also consider other factors.

Thirdly, and most difficult is whether the domain name in question "has been registered and is being used in bad faith" They use the following for evidence of bad faith

Circumstances indicating that the respondent has registered or acquired the domain name for the purposes of selling, renting, or otherwise transferring the domain name to the original owner of the mark in excess of the respondents documented out of pocket costs directly related to the domain name
the respondent has registered the domain name in order to prevent the owner of the trademark or service from using the mark in a domain name provided the respondent has engaged in a pattern of such conduct
The respondent has registered the domain name primarily to disrupt business of a competitor
by using the domain name, the respondent has intentionally attempted to attract for commercial gain, Internet users to its website or other location, by creating a likelihood of confusion with the complainants mark as to the source, sponsorship, affiliation, or endorsements of respondents website or location or of a product or service on the respondents location or website.

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