Disputes Over Domain Names

If a domain name makes unauthorized use of a company’s trademark, for example, if www.coke.com were to be registered by a competitor, say Pepsi, there are substantial legal remedies. The Uniform Domain Name Dispute-Resolution Policy (UDRP) enables the trademark’s owner to bring the matter to an arbitrator for a quick resolution of the dispute. The arbitrator will award the domain name to the trademark owner if that owner can prove three things: 1) The domain name is identical or confusingly similar to the owner’s trademark; 2) the current owner of the domain name has no right to or legitimate interest in the domain name; and 3) the current owner of the domain name has registered and is using it in bad faith.

A trademark owner in the U.S. also can seek relief under the Anticybersquatting Consumer Protection Act (ACPA). This federal law creates liability for any entity that, "with a bad faith intent to profit from the goodwill of another’s trademark," registers or uses a domain name that is either identical or confusingly similar to a trademark that is distinctive at the time the domain name is registered; or identical, confusingly similar to, or dilutive of a trademark that is famous at the time the domain name is registered.

The law provides that a trademark is distinctive if it is unique or arbitrary (rather than descriptive of the company or its goods/services) or is descriptive but has acquired a secondary meaning. Secondary meaning exists if a significant percentage of consumers view the trademark as associated with the source of goods or services.

If a trademark owner wins its lawsuit under the ACPA, the court can award the trademark owner the disputed domain name plus either obtain an award of actual damages or statutory damages from between $1,000 and $100,000 per domain name. However, neither of these legal remedies may help protect trademarks in the realm of social media.

Trademark Problems Specific to Social Media

There is a significant problem with these laws and the extent to which they protect businesses. The problem with the UDRP is that it covers only potentially infringing second level domain names. This means it will only protect domains that appear in the Web address immediately preceding the top level domain, such as .com. This enables Xerox to use the UDRP against a cybersquatter who might register www.xerox.com.

Social media, however, does not provide users with second level domain names. Rather, each user receives a username (such as a Twitter account @toyota) and/or a personalized subdomain, which appears after a slash in the Web address (such as www.facebook.com/toyota. This scenario was simply never contemplated by the UDRP, therefore, it does not apply.

The ACPA may be limited in a similar manner. The statute applies to domain names that are "registered with or assigned by any domain name registrar "... as part of an electronic address on the Internet." This obviously covers second-level domain names, which are granted by registrars. Registrars, however, have nothing to do with the usernames and subdomains created in social media. When Congress enacted this statute, the Senate report on it stated that the ACPA narrowly defined "domain name" in order "to target the specific bad-faith conduct sought to be addressed while excluding such things as screen names, file names and other identifiers not assigned by a domain name registrar or registry."

Nevertheless, one company previously asserted the ACPA in a social media context. Clean Flicks Media, (a small Mormon affiliated company out of Utah which produced edited versions of films to remove content that they considered inappropriate for children or that viewers might otherwise find offensive, and which was shut down by the courts in 2006 following a trademark infringement lawsuit by 11 Hollywood studios) had two federal trademarks in its company name. Clean Flicks sued a competitor for registering www.myspace.com/cleanflicks, however, the court did not rule on this issue prior to Clean Flicks Media being shut down as a consequence of the trademark infringement action. As a result, this issue is still not resolved and the legality and applicability of ACPA with regard to social media is still somewhat unclear.

It was also recently reported that the state of Israel purchased the Twitter username @Israel from a private individual named Israel Meléndez for an undisclosed sum, which by some reports may be as much as six figures. Since Twitter has a policy against name squatting and selling usernames, you have to wonder if the UDRP or the ACPA are of any help to businesses, especially if these are the lengths a nation has to go to in order to obtain a user name.

This entire article (parts 1,2 and 3) has been published by Thomson Reuters in their global IP solutions online magazine. and can be found here.

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