Oh, The Domain Pain Of It All.

You have the next great product or service. You have a great trademark or tradename. You have the drive, the ambition, and the financial backing to make it happen. Then you try to register a domain name to match your trademark or tradename, and find out it’s taken. Perhaps it is being warehoused, probably by someone hoping to cash in in the future. Or maybe a competitor beat you to the punch. Whatever the reason, it’s taken. Welcome to domain pain. But wait, all is not lost yet. Don’t give up that perfect domain name without considering your options. You may be able to get that domain name after all.

The Domain Name System. – Short Version

The domain name system allows businesses and private citizens to obtain plain language addresses for their location on the Internet. Domain addresses are actual numerical, but it is much easier to remember higgslaw.com than 204.206.248.14. The Internet Corporation for Assigned Names and Numbers (ICANN) administers the system, and in turn licenses the right to register domain names to various registrars (e.g., Network Solutions and Register.com). Domain names consist of the desired name followed by a top level domain or TLD. Currently the most popular TLDs are .com, .net, and .org, with .com being far and away the most sought after. There are other TLDs available, mostly designating various countries. ICANN is in the process of evaluating several new TLDs, but there is no consensus on when those will become available for registration.

You Have Options

Considering the first come, first served nature of domain name registration, the finite supply of desirable terms for domain names, and the availability of multiple TLDs, it is easy to see that the system is ripe for disputes. Cybersquatters (domain name speculators) and typosquatters (who register misspellings of popular domain names to divert traffic to other web sites) are the main offenders. To handle the inevitable disputes, each registrar has to subscribe to a Uniform Dispute Resolution Process (UDRP) promulgated by ICANN. Each registrant, as part of the registration process, agrees to accept and abide by the terms of a subscriber agreement that includes the UDRP by reference. Registrants also agree that to the best of their knowledge neither the registration of its domain name nor the manner in which it intends to use its domain name will directly or indirectly infringe the legal rights of a third party. Registrants are further required to submit to a mandatory administrative proceeding should a third party file a complaint against their registration.

Importantly, Congress has also provided help to businesses in the form of the Anti-Cybersquatting Consumer Protection Act (ACPA). The act establishes criteria for bad faith registration and use and provides remedies against those who engage in bad faith registration. It differs from the UDRP in that it is a court proceeding (rather than an administrative proceeding), and is United States law rather than an internationally enforced policy.

Talk it Over

Back to that domain name you covet that matches your trademark or tradename. What can you do if you find it’s already registered? You have several options. The simplest is to negotiate a purchase of the domain name, and have it transferred to you. If the registrant is not making any use of the domain, and is willing to sell for a reasonable price, this may be a viable option. You may also be able to barter for the domain, if you have goods or services that may be of value to the registrant.

Another option, depending on your rights in your trademark or tradename, is to send correspondence to the registrant apprising it of your rights in the name, and demanding that they transfer the name to you. Depending on the strength of your rights, you can match the tone of the letter to your willingness to negotiate an amicable solution to this problem. You may want to consult with your attorney and include references to the UDRP and the ACPA.

Take Action

You may also be able to obtain relief from the registrar, although this method will probably require some patience. All registrars require that a registrant agree to abide by the terms of its service agreement. Registrants who violate the registrar’s policies may find their registration cancelled. If you find valid grounds for cancellation you may be able to bring that to the attention of the registrar, who may cancel the registration. A good example would be if a registrant has given false contact information to the registrar.

If all of the above fail, it is now time to huddle up with your attorney and think about the UDRP. The UDRP is basically an arbitration that registrants agree to when they register their domain name. It is initiated by filing a complaint with a service provider – usually the World Intellectual Property Organization (WIPO). In the compliant, you must establish that 1) the registrant has obtained a domain name that is identical or confusingly similar to your trademark or tradename, 2) the registrant has no rights or legitimate interests in the domain name, and 3) the registrant registered and is using the domain name in bad faith. The UDRP sets guidelines on what constitutes bad faith, which include offers to sell the domain name to the trademark owner for more than out-of-pocket costs, a pattern of warehousing multiple domain names, diverting customers, and disrupting a competitor’s business. The complaint (and filing fee) is filed with WIPO in Geneva, examined for sufficiency, and then transmitted to the registrant. The registrant then has a period of time to respond to the complaint. No discovery is allowed; the arbitrators only examine the complaint and answer, and any attached evidence. The arbitration panel is then selected, and within a few weeks a decision will be rendered. The entire process is designed to be inexpensive and quick. If you win, the registrar of the domain name must either transfer the domain to you, or cancel it. You can appeal the UDRP decision to a court of mutual jurisdiction if you do so within ten days of the decision.

If the UDRP fails, you still have options. You can file a complaint in federal court under the ACPA. Similar to the UDRP, the ACPA requires that you show that the domain name is identical or confusingly similar to a mark that was distinctive when the domain name was registered, or is diluting a famous mark. Bad faith factors are similar to bad faith under the UDRP. Remedies may include injunctive relief, defendant’s profits, and actual damages and costs. If you can not get jurisdiction over a cybersquatter, you may invoke “in rem” jurisdiction which allows you to get jurisdiction over the domain name itself.

Should you still not prevail, you can consider filing a complaint for trademark or tradename infringement, trademark dilution or unfair competition, which may lead to a settlement or judgment in which you obtain the coveted domain name.

Conclusion

There are a variety of options open to a business that finds itself in the not uncommon position of needing a domain name to match its trademark or tradename, only to find it is already taken. You may be able to negotiate an amicable transfer of the domain name. You may be able to threaten and/or cajole the registrant into turning the domain name over to you. Failing that, you can turn to the UDRP, as close to 2000 did last year. Finally, you can file a complaint in federal or state court and obtain the domain name through litigation. Just remember you have options, and you can use them to relieve your domain pains.

© 2001 M.J. Hoisington. This article was first published in the April 2nd 2001 edition of the San Diego Business Journal, Vol.22, No.14, Pg.15.