A domain name is often a valuable business asset that allows customers to find your website.  Often times the business trademark is used as the domain name.  For example, coatsandbennett.com is used by persons looking for information about our law firm.  Unfortunately, nefarious third parties recognize the value to a business in obtaining the domain names corresponding to their trademarks.  These third parties are referred to as cybersquatters that register the domain names of trademarks in an attempt to profit from this action.  These cybersquatters have no intention of using the domain names for their own legitimate purpose, but rather hold the domain name hostage in attempt to be paid a ransom from the trademark owner.

A business has two options for pursuing a cybersquatter who is using their trademark as a domain name: (1) institute an ICANN proceeding; or (2) bring a trademark infringement suit in federal court.

ICANN (the Internet Corporation for Assigned Names and Numbers) is responsible for the Internet’s global Domain Name System including the determination of domain name registrations.  ICANN has established a Uniform Domain Name Dispute Resolution Policy (UDRP) that decides disputes and determines whether there is an infringement or violation of one’s rights.  The UDRP proceeding is a non-judicial arbitration type system in which the challenging party submits a brief establishing why the existing domain name should be transferred and/or cancelled.  The domain name registrant then responds with their own brief stating why they are entitled to use the domain name.  A panel of one or more judges then decides the rightful domain name owner.

In order to be successful in this type of proceeding, the challenging party is required to prove the following:

1. The challenged domain name is identical or confusingly similar to complainant’s trademark;
2. The domain name holder has no rights or legitimate interest in respect to the domain name; and
3. The domain name was registered in bad faith and is being used in bad faith.

        A fundamental requirement for a challenger is to prove that they possess the rights to the name.  This can be proven through on-going use of the mark or a federal trademark registration.

An issue that often arises in ICANN proceedings is whether the domain name is currently being used in bad faith.  Cybersquatters will often try to include on the website basic information in an attempt to demonstrate good faith use.  ICANN has established four circumstances that demonstrate bad faith in registering and using the domain name:

1. The domain name was acquired primarily for the purpose of selling, renting, or otherwise transferring the domain name registration for an excessive amount; or
2. The domain name was registered to prevent registration by the trademark owner; or
3. The domain name was registered primarily for the purpose of disrupting the business of the trademark owner; or
4. The domain name was registered to intentionally create a likelihood of confusion to attract consumers for commercial gain.

        The ultimate resolution of cybersquatting cases are highly fact dependent and need to be carefully analyzed prior to deciding to move forward with a proceeding.  The challenging party must be able to demonstrate each of the three elements necessary to prevail.  In the event that this is not possible or one or more of the elements is speculative, the party may need to pursue other actions to obtain the domain name.

A challenger may also bring a federal trademark suit against the domain name registrant.  The Anti-Cybersquatting Consumer Protection Act (Lanham Act §43(d) (15 USC 1125(d))) establishes a cause of action against such a domain name holder.  The Act defines cybersquatting as receiving a domain name that is confusingly similar to a trademark with the bad faith intent to profit.  A challenger must prove the following elements:

1. The defendant registers, traffics, or uses a domain name;
2. The name is identical to or confusingly similar to a mark owned by the plaintiff;
3. The mark was distinctive at the time of the defendant’s registration of the domain name; and
4. The defendant committed acts in bad faith with the intent to profit from the plaintiff’s mark.

        The Act specifically spells out nine factors when determining bad faith (15 U.S.C. 1125(d)(1)(B)(i)).  These include factors such as the current registrant’s prior use of the domain name in offering goods or services, the intent to divert consumers from the mark owner’s online location, and the any offer to transfer the domain name to the mark owner for financial gain.  The Act further provides a safe harbor provision (15 U.S.C. 1125(d)(1)(B)(ii)) that excludes a finding of bad faith when it is determined that the current registrant believed and had reasonable grounds to believe that the use of the domain name was fair use or otherwise lawful.

As with an ICANN proceeding, the outcome of a federal court proceeding is highly fact dependent.  Therefore, it is necessary to carefully review the facts of the case prior to instituting any action.  The analysis of the facts should establish the strengths and weaknesses of your case and provide options for regaining your domain name.