Overview of Domain Name Law
Domain name law is an extension of trademark law which itself has existed in varying forms for hundreds of years. While the world has certainly become more complicated since the advent of the computer age, English courts long ago recognized the need to protect consumers who had been mislead into making deals because of fraudulent claims. Within the common law system, one of the oldest legal remedies around is called “passing off.” The claim centers on a party seeking retribution from a seller who made false claims of authenticity in order to achieve a sale. Although this claim does not exist within domain name arbitrations, the idea behind it—someone being intentionally mislead—continues to surface repeatedly throughout domain name cases, albeit in varying forms.
To gain a sense of what kinds of domain name issues most often reoccur before the world’s four authorized tribunals, the following examples are offered for illustrative purposes.
Note that the following illustrations were designed for educational purposes only, and are not intended to influence any party in determining the likelihood of success in the arbitration of an individual case. For an evaluation of your particular issue or case, click here.
Illustration #1 – The Simple and the Straightforward
This illustration represents a classic cybersquatter tactic and accounts for a large number of cases that are typically arbitrated. A scenario like the one below offers the greatest likelihood for success for a complaining party. Under such a scenario the following occurs:
Company X holds a registered trademark service mark in the U.S. for a period of time. A few days after the registration of the marks, Company A later decides to develop an Internet presence to directly market its product to consumers. Upon attempting to register the domain "X.com," Company X learns that the domain has been purchased and is no longer available. A few days later, Company X is contacted by the owner of "X.com" who offers to sell Company X the domain. Discussions go back and forth and it becomes clear that the owner of "X.com" has no interest in developing a website which utilizes the name "X.com," but rather, only wishes to sell the domain for a high price to Company X.
This illustration is an example of the classic attempt to extort money from a trademark owner under the guise of a legitimate business deal. Arbitration panels have been reluctant to reward cybersquatters for their efforts, as many panelists have concluded that a sale of a domain name for value above what the domain cost to register, is, by itself, indicative of “bad faith.” This can be key, as bad faith is one of the three requirements that a panelist must determine before ordering the transfer or cancellation of a domain
name. This illustration mirrors the facts of the very first case ever decided under the UDRP, which was filed back in the fall of 1999.
If you believe you’re the victim of a cybersquatter, or in some other way are being prohibited from using the domain name of your choice, we encourage you to contact us for a free consultation.
Illustration #2 – When is a business really “business”?
Increasingly, as the volume of domain cases before accredited tribunals continues to grow and public accessibility to these decisions becomes easier, cybersquatters have developed ways in which to frustrate ICANN’s policy on the use of domain names. In these kinds of cases the facts involved often differ; nevertheless, they share some common features, as outlined below:
Company X holds a registered trademark or service mark in the U.S. for a period of time. Under trademark law in the U.S. the Company’s name—“X” —is termed “generic” because its name is merely a letter of the alphabet and not descriptive enough to allow for additional protection under U.S. law. A few days after the registration of the marks, Company X later decides to develop an Internet presence to directly market its products to consumers. Company X wants to use the domain “X.com;” but unfortunately, Cyber Sam has purchased the domain name and uses it to display advertising for his clients. What bothers Company X is that Cyber Sam’s website isn’t well designed, and Cyber Sam only seems to have a few unrelated random advertisements on his site. Company X has big plans for this domain, and the company’s chief operating officer wants to know if there is anything his company can do.
Unfortunately, the answers to these questions are neither easy, nor consistent. Panelists around the world have issued different opinions with respect to this issue. The first thing to note is that the generic nature of the company’s name places it at a distinct disadvantage in UDRP decisions. The reason being is that ICANN’s Policy allows people to freely register domain names that use generic words. For example, the registration of the domain names “airplanes.com” or “tableandchairs.com” do not alone infringe on the rights of airplane or furniture manufacturers because those words are commonly used in ordinary English.
An additional problem in these types of cases relates to the nature of Cyber Sam’s business. Cyber Sam could be a cybersquatter, merely posting a few advertisements on his site to avoid the grasp of the UDRP Policy, and therefore, be justified in charging his fee to those who want to operate under a particular domain name. Further aiding Sam on this point is that panelists have been reluctant to date to engage in an assessment of what is, or is not, a legitimate business practice. Rather, they often find that any evidence of a “business”—however weak or remote—is enough to prove a legitimate interest in the disputed domain name.
While the above facts may at first appear bleak for Company X in gaining the right to use the domain name of its choice, the good news is that some arbitration panels are making narrow distinctions in these types cases that provides at least some measure of relief to beleaguered businesses. Without getting too technical, these decisions rest on a distinction between businesses having an interest in the domain, versus that interest being legitimate. Quite simply, the difference hinges on the activity of the business and how that business operates. It deserves mentioning, however, that not every arbitration panel is comfortable making this assessment. This means that in order to achieve maximum value for this approach, a specialized knowledge of each arbitration forum and the individual arbitrators who serve that forum is crucial in order to assess your individual likelihood of success on such a theory.
A case which is factually different from the above scenario, but nevertheless demonstrates a panel’s willingness to inquire into the legitimacy of a business, is the Zuccarini case. In particular, pay attention to Part 6, subpart B of the decision for the relevant section.
Again, the above scenarios are not intended to offer a comprehensive overview of all problems related to domain name disputes. They do, however, represent some of the more common trends that we’ve seen in our practice over the last few months. We invite you to contact us for a free consultation, should you have a question or problem related to a domain name.
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