There are over 366 Million Domain Names registered on the Internet today. Chances are good that either purposely or by accident one of those domain names is identical to, or confusingly similar to your trademark. Even if this registration is benign, or if the domain is not being used by the registrant, it can have harmful consequences for your business.
Your Duty as a Trademark Holder
Federal trademark law was codified by the Lanham Act in 1946, and created strong protections for the trademark holder against trademark infringement and trademark dilution. However, this statute also created a duty that a trademark holder must take appropriate action to protect their mark. Failure to properly protect the mark could result in a weakening of the mark, and in a worst case scenario, a determination of abandonment of the mark altogether.
Loss of Reputation and Goodwill
In the event that an infringing domain name registration was not benign, your business could suffer irreparable damage to your reputation. For example, the infringing domain could be used to sell defective or low quality goods that the consumer mistakenly believes were sold by your company. Even if the quality of the goods is acceptable each sale made by your competitor reduces your company’s revenues and margin.
Secondly, when it comes to business valuation, trademarks and domain names can provide a significant source of “Goodwill” value. A strong trademark can add millions and in the case of a company like Apple or Coca-Cola billions of dollars to the company’s valuation. In addition, a good domain name can be sold for tens or hundreds of thousands of dollars. According to DomainSherpa, cars.com was the most expensive domain ever sold with a price tag of $872 million, and there are dozens of domain names that have been sold for over $5 million.
How can I protect my trademark on the Internet?
There are two main steps to take to protect your trademark on the Internet. The first step is to register your domain with alternative Top Level Domains (TLD). Everyone has heard of the .com TLD. You are also likely familiar with common TLD’s like .net, .org, and .gov. Registering your domain with multiple TLD’s at the beginning can be an inexpensive way to protect your business against future infringement. TLD’s in many cases can be purchased for less than $30 per year, and once you have them, they can be redirected to your primary .com domain. Did you know, however, that there are now over 1,500 TLD’s on the Internet? In addition to the familiar .com and .net, there are general business TLD’s such as .inc, .llc, .business. Professional service TLD’s like .vet, .dentist, and .lawyer are also available. Finally, there are geographical TLD’s like .us, .asia, and .paris. You may want to consider if these TLD’s enhance your specific trademark as it relates to your current or future business goals.
Secondly, a trademark owner should regularly search the Internet for domain names that are identical to, or are confusingly similar to your mark. There are many places on the Internet where you can search for domain names similar to your mark. ICANN’s Whois Lookup, is the granddaddy of all domain name searches. However, domain registrars like Hover and networksolutions also provide fast and user friendly interfaces to conduct your searches.
What if I find a domain name that is infringing on my trademark?
There are a variety of options that you can pursue in the event that you identify a domain name that may be infringing on your trademark.
Option 1 – Do Nothing
This is the easiest and least expensive response to a potentially infringing website with a domain name similar to your trademark. While this course of action could work out for your business, you are running the risk that the domain holder could damage the reputation of your company and in a worst case scenario, failure to respond to the infringement could result in the weakening or abandonment of your mark altogether.
Option 2 – Send a Cease and Desist letter
A Cease and Desist letter puts the potentially infringing domain holder on notice that you have a trademark and their domain may be infringing on that mark. The letter indicates that the website in question is causing damage to your business, and that the site’s owner should immediately cease to use the site now and in the future. If the domain owner continues to use the infringing domain, then you will take all appropriate legal actions, including a potential claim for damages.
Option 3 – Request a Uniform Domain Name Dispute Resolution Policy (UDRP) Arbitration
Domain Name Disputes can be arbitrated by the Internet Corporation of Assigned Names and Numbers (ICANN) through UDRP Arbitration. URDP arbitrations are relatively inexpensive, and are usually quickly resolved by the arbitrator.
A UDRP filing requires the following elements:
- The domain name is identical or confusingly similar to a trademark or service mark
- The domain name owner has no rights or legitimate interest in respect to the domain name, and
- The domain name was registered and is being used in bad faith
Since the UDRP was created in 1999, over 80% of the determinations have been in favor of the trademark holder.
Option 4 – Use the Uniform Rapid Suspension System
As the name implies, the benefit of a URS complaint is that the URS determinations are generally made more quickly than UDRP determinations. In most cases, a URS determination will be issued within 21 days after filing. Furthermore, URS filings are lower cost than UDRP, with the filing fees starting at $375 as compared to fees beginning at $1,500 for UDRP filings.
Option 5 – Bring a Lawsuit Under the Anticybersquatting Consumer Protection Act (ACPA)
Under the ACPA a trademark owner may bring a cause of action in Federal Court against a domain registrant who:
- Has a bad faith intent to profit from the mark
- Registers, traffics in, or uses a domain name that is:
- Identical or confusingly similar to a distinctive mark
- Is a trademark protected by 18 U.S.C. § 706 (marks involving the Red Cross) or 36 U.S.C. § 220506 (marks related to the “Olympics”)
In addition, the ACPA provides additional remedies that are not available in a URS or UDRP action. In addition to forfeiture or cancellation of the disputed domain name, a successful ACPA suit could entitle the trademark holder to actual damages, Defendant’s profits, statutory damages up to $100,000 per infringing domain in lieu of actual damages, and attorney’s fees in “exceptional cases”.
Obtaining a trademark provides businesses with many rights, but the owner also bears the responsibility of enforcing the mark. Trademark owners should take an active role in searching the Internet for identical or confusingly similar domain names. In the event that a potentially infringing domain is identified, the trademark holder has multiple options to enforce the business’ rights in the mark and to facilitate the transfer of the offending domain name to the business. Finally, trademark owners who fail to properly enforce their mark may find that the mark has been weakened, and in the worst case abandoned.
If you have questions about your rights in a trademark or if a domain name is infringing on your mark, the Law Office of Scott Schumacher provides free consultations to discuss your options. Please note that nothing in this article should be considered legal advice, and that no attorney-client relationship is established by the publication or reading of the article.