Trademark and Domain Names
A business can spend a lot of time, capital, energy in building rights in a trademark and the associated goodwill with the public. It can be devastating when a third party registers a domain name and operates a website incorporating a confusingly similar name to that of the valuable trademark. The detriment to the business can be significant. For example, the third party website may sell a competing product, causing loss of income to the business. In a more unsavory scenario, the third party may operate an adult oriented website under the confusingly similar name, damaging the brand equity of the right holder.
Options Against Unlawful Third Party Domain Name Holders
The primary options for consideration against the third party include:
- Initiating a lawsuit
- Initiating a UDRP domain name proceeding; and/or
- Online content approaches to outrank or “bury” the competing website.
The business should note that each of these options is not exclusive and more than one option might be suitable for a given situation.
Generally comparing the two proceeding-based options, a lawsuit might include claims of trademark infringement and cybersquatting. The defendant domain name holder would be located and served, discovery (exchange of evidence), and a trial, all under the rules of civil procedure. This can take significant time, capital, and energy. The notable advantage of a lawsuit is that the possible remedies include injunctions and monetary damages, which a business may need to seek in some circumstances. Contrasting a lawsuit with a domain name proceeding, a domain name proceeding is almost always faster, cheaper, and less complex. A domain name proceeding is typically resolved in less than two months. This speed must be balanced with the possible remedies. The remedies in a domain name proceeding are limiting to cancellation or transfer of the domain name. This “cost” might be palatable or welcome, especially where a defendant is difficult to locate or loss of income due to the suspect domain name is leading to red ink.
UDRP Domain Name Proceeding Elements – Proving the Case
The Uniform Domain Name Dispute Resolution Policy (UDRP) is an online procedure for resolving complaints made by trademark owners about domain names. It is a mandatory administrative proceeding arising out of the registration agreement accepted during the domain name purchase process of .com, .biz, .info, .org, and .net domain names.
The trademark owner must prove three elements in the proceeding in order to prevail over the domain name holder:
- the business has a trademark right and the domain name at issue is identical or confusingly similar to that mark;
- the third party has no right or legitimate interest in the registered domain name; and
- the third party registered and used the domain name in bad faith.
Take the above elements to heart. Commonly, businesses incorrectly think that their trademark rights include the right to terminate any third party’s registration of any domain name for any purpose. This fails to account for the second and third elements. A third party in an unrelated industry may register a seemingly “confusingly similar” domain name without violation of the rules. A second, common mistake involves the apparent simplicity of the proceeding. Because the rules of evidence of a courtroom aren’t followed, business often conflate the informality of evidence with the strength of evidence. Strong evidence establishing each of the above elements should be proffered in order to convince the panelists and prevail. After all, the goal is to preserve the goodwill and, in turn, the income and equity potential arising from the trademark.