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BHGR Newsletter: Cybersquatting Law: Avoid Domain Name Piracy

June 2009

Protection of a company’s trademark, trade name, and goodwill is an extraordinarily important factor in the success of most businesses. In the internet age with decreasing effectiveness of print advertisements, many companies are finding that a recognizable domain name is crucial to marketing and growing their businesses. Accordingly, it is important to protect and utilize an internet domain name that is recognizable and bears the closest relationship to the trademark a company has worked so hard to build.

In 1999, the United States Congress amended the Trademark Act of 1946 (also known as the Lanham Act) to include a provision for protection of trademark owner against cybersquatting (known as the Anticybersquatting Consumer Protection Act (ACPA)). 15 U.S.C. § 1125. Cybersquatting means registering, selling or using an internet domain name with the intent of profiting from another’s trademark or goodwill. Many cybersquatters will buy up a host of domain names with the intent to sell those names at a significant profit to those businesses using those names.
Under the ACPA, one can obtain relief from a cybersquatter who registered a domain name: (1) in bad faith with an intent to profit from trademark; (2) which is identical or confusingly similar to a trademark that is distinctive at the time of the registration; or (3) if the trademark qualifies for protection under federal trademark law.

Often, a cease-and-desist letter asking the cybersquatter to return the domain name will be effective. In other situations, further action to recover the domain name may be prudent and necessary. A party bringing an action in the United States District Courts under the ACPA can recover up to $100,000 in statutory damages, plus attorneys’ fees and costs, and can obtain an order that the cybersquatter must give up registration of the domain name. Alternatively, one can bring an action before “ICANN,” a non-profit organization that oversees the domain name registration system. Under ICANN’s dispute resolution procedures, the party may submit to binding arbitration regarding domain name disputes, including cybersquatting. However, the procedures do not allow for recovery of damages, fees, and costs.

Should you have questions regarding your domain name protection contact the Business Transactions Group.

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