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Cybersquatting

Before the Anticyberquatting Consumer Protection Act (ACPA) was enacted, trademark owners relied on the Federal Trademark Dilution Act (FTDA) to sue domain name registrants. In Panavision Int’l L.P. v. Toeppen, Toeppen registered the domain name Panavision.com. The trademark owner, Panavision, discovered the usage when they attempted to register the trademark “Panavision” as a domain name. When asked to cease, Toeppen offered to sell the domain name for $13,000. When Panavision refused, Toeppen registered another Panavision trademark. The court held that the FTDA could be violated without the traditional tarnishing or blurring the courts had required in the past, which extended the FTDA. 

The ACPA more effectively deals with such issues by granting a cause of action for registering, trafficking, or using a domain name confusingly similar to a trademark. The law’s intention was to prevent cybersquatters who register Internet domain names containing trademarks with no intention of creating a legitimate web site, but instead plan to sell the domain name to a trademark owner or a third party.

Under the ACPA, a trademark owner may bring a cause of action against a domain name registrant who (1) has a bad faith intent to profit from the mark, and (2) registers, traffics in, or uses a domain name that is either an identical or confusingly similar to a distinctive mark, a identical or confusingly similar to or dilutive of a famous mark, or is a trademark protected by 18 U.S.C. § 706 (marks relating to the Red Cross) or 36 U.S.C. § 220506 (marks relating to the Olympics). “Trafficking” in the context of domain names includes, but is not limited to “sales, purchases, loans, pledges, licenses, exchanges of currency, and any other transfer for consideration or receipt in exchange for consideration.” The ACPA also requires that the mark be distinctive or famous at the time of registration

In determining whether the domain name registrant has a bad faith intent to profit, a court may consider factors, such as, but not limited to:

  1. the registrant’s trademark or other intellectual property rights in the domain name;
  2. whether the domain name contains the registrant’s legal or common name;
  3. the registrant’s prior use of the domain name in connection with the bona fide offering of goods or services;
  4. the registrant’s bona fide noncommercial or fair use of the mark in a site accessible by the domain name;
  5. the registrant’s intent to divert customers from the mark owner’s online location that could harm the goodwill represented by the mark, for commercial gain or with the intent to tarnish or disparage the mark;
  6. the registrant’s offer to transfer, sell, or otherwise assign the domain name to the mark owner or a third party for financial gain, without having used the mark in a legitimate site;
  7. the registrant’s providing misleading false contact information when applying for registration of the domain name;
  8. The registrant’s registration or acquisition of multiple domain names that are identical or confusingly similar to marks of others; and
  9. The extent to which the mark in the domain is distinctive or famous.

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