Resolving Domain Name Disputes: Part II: The Anti-Cybersquatting Consumer Protection Act

A domain name is basically an address that tells Internet users where to find a website. Trademark and service mark owners use their mark in a domain name to direct users to their site. However, someone else may be using the mark as a part of their domain name to direct users to their site. A trademark or service mark owner may simply stumble into a domain name that uses their mark. Owners should keep a lookout for domain name registrations that use their marks without permission.

Regardless of how the domain name is discovered, mark owners have two basic options for resolving disputes over domain names. In part I, proceedings under the Uniform Domain Name Dispute Policy ("UDRP") were discussed. UDRP proceedings have some advantages – they are relatively fast and economical. They also have some disadvantages, specifically (1) they are not available for all domain names, (2) they are not appropriate for license disputes and other issues not addressed in the policy and (3) the mark owner cannot recover damages or attorney fees in a UDRP proceeding. Litigation overcomes some of those disadvantages.

The Anti-Cybersquatting Consumer Protection Act ("ACPA"), enacted in 1999, was intended to prevent cybersquatting on the Internet by the use of domain names that are confusingly similar to trademarks and service marks. The ACPA imposes liability on the registrant of a domain name (or its licensee) if that person – (i) has a bad faith intent to profit from the mark and (ii) registers, traffics in, or uses a domain name that is identical or confusingly similar to the mark and the mark (or dilutive if the mark is famous) was distinctive (or famous) at the time of the domain name registration.

The ACPA sets forth a set of nine nonexclusive factors that a court may consider in determining whether a person has a bad faith intent. The ACPA provides that "Bad faith intent . . . shall not be found in any case in which the court determines that the person believed and had reasonable grounds to believe that the use of the domain name was a fair use or otherwise lawful." 

The mark owner must show that the challenged domain name is confusingly similar to its trademark. The determination whether the domain name is confusingly similar to the plaintiff's trademark is made without considering any domain name that the plaintiff uses or the content of the web site identified by the challenged domain name. Only the challenged domain name and the mark are compared. The proper inquiry is whether the defendant's domain name is so similar to the plaintiff's mark that the two could be confused. 

If the mark owner prevails in the action, the court may order the forfeiture, cancellation or transfer of the domain name. In addition, the mark owner may recover the defendant's profits, any damages sustained by the owner of the trademark and its costs of the action. The owner of the mark may elect to recover statutory damages, in lieu of actual damages and profits. The court can award statutory damages in an amount between $1,000 and $100,000 per domain name. 

Claims under the ACPA and UDRP proceedings are two options available to trademark and service mark owners who are protecting their mark from being used by others in domain names in bad faith. We can help you explore these options and others when domain name and other internet-related disputes arise.

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