Most wise business owners have applied for and obtained trademark registrations for their business’s name, logo and/or its products and services. Most businesses own a domain name that contains some part of their business name. But what happens if someone takes your federally registered trademark, and registers www.YOURMARK.net, or www.YOURMARK.org without your permission?
Two options generally exist –traditional, federal court litigation or UDRP, which stands for Uniform Dispute Resolution Policy.
Federal Court Litigation
A portion of the federal law that controls trademark infringement (the “Lanham Act”) called the ACPA, Anticybersquatting Piracy Act, allows a plaintiff to elect to recover statutory damages instead of actual damages and profits,( which can be difficult and/or expensive to prove) in the amount between $1000 and $100,000 per domain name, as the Court considers just. 15 USC §1125(d). While damages and an injunction are powerful remedies, federal court litigation is costly and time consuming, not to mention the opportunity cost of time focusing on the lawsuit, and not on running your business.
Uniform Dispute Resolution
However, UDRP can be a more economical solution, making them particularly well-suited to the small to mid-size company, given the correct set of facts. For instance, where Federal lawsuits for infringement can run well into the tens of thousands of dollars (if not more), and take years, UDRP generally costs $800 – $2000 (plus $1500 – $5000 in filing costs), and may be resolved in approximately 60 days. In the UDRP proceeding, typically success is limited to a forced transfer or cancellation of the domain name(s) at issue to the trademark owner. Money damages and attorneys’ fees are not available remedies. The general requirements for a successful UDRP claim are:
- Domain name must be identical or confusingly similar to the Plaintiff’s registered trademark.
- Defendant must have no legitimate rights in the trademark.
- Defendant acted in bad faith when he/she adopted the domain name.
Bad faith is the element that is often the element that requires the most analysis. In a UDRP proceeding, a panel will consider several non-exclusive factors to assess bad faith, such as:
- Whether the registrant registered the domain name primarily for the purpose of selling, renting, or otherwise transferring the domain name registration to the complainant who is the owner of the trademark or service mark;
- Whether the registrant registered the domain name to prevent the owner of the trademark or service mark from reflecting the mark in a corresponding domain name, if the domain name owner has engaged in a pattern of such conduct; and
- Whether the registrant registered the domain name primarily for the purpose of disrupting the business of a competitor; or
- Whether by using the domain name, the registrant has intentionally attempted to attract, for commercial gain, internet users to the registrant’s website, by creating a likelihood of confusion with the complainant’s mark.
While the UDRP system allows a complainant to file a single complaint against a respondent concerning multiple domain names, it does not permit a trademark owner to seek the transfer of multiple domain names owned by multiple registrants. Nor does it grant relief beyond awarding the transfer of the subject domain name to the complaining party/trademark holder. In contrast, actual and/or statutory damages, injunctive relief and attorneys’ fees may be available through litigation. While monetary remedies available only through litigation traditionally have provided a greater deterrent and potentially prevented serial cybersquatters from registering additional domain names that include famous and/or well-known trademarks, this may, however, be changing. With the introduction of so many new gTLDs, repeat cybersquatters may be banned from future registration of .XXX domain names. A similar policy applied to other gTLDs could provide the UDRP system with the proverbial “stick” that complainants presently seek from the courts against serial cybersquatters.
If your trademark is being used in a domain name that does not belong to your company, you may want to consider whether UDRP is a viable legal option. To learn more, please contact:
Natalie A. Remien at:
firstname.lastname@example.org or (312)368-0100.