Common Law Rights for Domain Names

The three important steps in the life of a domain name are the same as a trademark: (1) Creation, (2) Screening and Clearance, and (3) Protection. A good domain name distinguishes you from your competitors and helps to bring in business. A bad choice for a domain name may bring lawsuits or loss of the use of the domain name. Maximizing the commercial strength and minimizing the weaknesses of a trademark or domain name are strategies that require planning.

How Do Common Law Trademark Rights Affect Domain Names?

Many Courts have stated the obvious:

[W]ords in many domain names can and do communicate information as to the source or sponsor of the web site. See, e.g., People for the Ethical Treatment of Animals v. Doughney, 263 F.3d 359, 366 (4th Cir.2001) ("The domain name peta.org simply copies PETA's Mark, conveying the message that it is related to PETA."); Brookfield Communications, 174 F.3d at 1055, 1066 ("The domain name is more than a mere address: like trademarks, second-level domain names communicate information as to source.... When a firm uses a competitor's trademark in the domain name of its web site, users are likely to be confused as to its source or sponsorship."); Panavision Int'l, L.P. v. Toeppen, 141 F.3d 1316, 1327 (9th Cir.1998) ("We reject [the] premise that a domain name is nothing more than an address. A significant purpose of a domain name is to identify the entity that owns the web site."); Cardservice Int'l, Inc. v. McGee, 950 F.Supp. 737, 741 (E.D.Va.), aff'd, 129 F.3d 1258 (4th Cir. 1997) ("[A] domain name is more than a mere internet address. It also identifies the internet site to those who reach it, much like ... a company's name identifies a specific company."). In fact, "customers who do not know what a company's domain name is will often guess that the domain name is the same as the company's name" or trademark. Green Prods. Co. v. Independence Corn By-Prods. Co., 992 F.Supp. 1070, 1076-77 (N.D.Iowa 1997); see also Brookfield, 174 F.3d at 1044-45 ("Web users often assume, as a rule of thumb, that the domain name of a particular company will be the company name followed by `.com.' ... Sometimes, a trademark is better known than the company itself, in which case a Web surfer may assume that the domain address will be `trademark'.com."); Panavision Int'l, 141 F.3d at 1327 ("A customer who is unsure about a company's domain name will often guess that the domain name is also the company's name.").

Paccar Inc. v. Telescan Technologies, L.L.C., 319 F.3d 243 (6th Cir., 2003)

Domain names that are trademarked brand names, tag lines or slogans, have a distinct advantage of being protected from infringing use. For instance, a search engine provider who sells advertising may have policies that stop advertisers from buying someone else’s registered trade mark as a key word. If your trademark is just a mixture of descriptive words, this may be a problem because even a registered trademark owner cannot stop others from using descriptive words in a descriptive manner. Sometime it helps to plan ahead for success and create a trademarkable domain name that has at least some distinctive element rather than all descriptive elements and use non-infringing names.

A domain name may be a trade name, a descriptive name, or it may be a brand name that you wish to register as a trademark or service mark. Be aware that a trade name or a descriptive name cannot be registered as a trademark unless other requirements are met. Many businesses use descriptive names in order to gain quick recognition for products or services (which may be a good strategy for a product with a short life cycle) but this descriptiveness may jeopardize the ability to trademark the name. Planning ahead is a good idea because a descriptive name may acquire distinctiveness with long term use. However, sometimes the descriptive name domain name is such a good key word or collection of key words that the trademark value does not compare to the key word value that the domain name has on search engines.

Many businesses register multiple domain names including those that can be protected as a brand name (trademark). This pre-emptive anti-cybersquatting tactic can save a lot of money in the long run because domain names are relatively cheap compared to trying to stop someone else’s improper use of a trademark. Examples of multiple domain names for the same business are multiple extension names for the same business name, common misspellings of the business name (anti-”typosquatting”), descriptions of different functions of the business as names, advertising slogan names, and other names that are linked to the business, i.e. ‘Trademark’.com, ‘trademark’.net, ‘ourservices’.com, ‘ourservices’.net, ‘ourproducts’.com and ‘ourproducts’.net.

A domain name that is a trademark registered on the Principal Register of the United States Patent and Trademark Office (USPTO) has many advantages including being protectable both through civil court (infringement) and through federal criminal statutes (counterfeit or pirated use of the trademark). See Comparison of Principal Register and Supplemental Register for USPTO Trademark Registration advantages and see Anti-Counterfeit Enforcement for ways to protect registered trademarks against counterfeits and pirating.

Distinctiveness or How to be Inherently Distinctive

What does distinctive mean? For the purposes of obtaining a trademark from the United States Patent and Trademark Office (USPTO), the definition of distinctiveness is found in the Trademark Manual of Examining Procedure (TMEP) in Section 1209.01.

Distinctiveness is the opposite of descriptiveness for trademark purposes and marks vary along a continuum from being highly distinctive and inherently distinctive to being generic with highly distinctiveness marks being registrable on the Principal Register  and generic marks (common or class names for goods or services) being not registrable as trademarks under either the Principal or Supplement Register.

The terms are further defined in TMEP 1209.01: “Fanciful marks comprise terms that have been invented for the sole purpose of functioning as a trademark or service mark. Such marks comprise words that are either unknown in the language (e.g., PEPSI, KODAK, EXXON) or are completely out of common usage (e.g., FLIVVER).”

“Arbitrary marks comprise words that are in common linguistic use but, when used to identify particular goods or services, do not suggest or describe a significant ingredient, quality or characteristic of the goods or services (e.g., APPLE for computers; OLD CROW for whiskey).”

“A mark is considered merely descriptive if it describes an ingredient, quality, characteristic, function, feature, purpose or use of the specified goods or services.”

“Generic terms are terms that the relevant purchasing public understands primarily as the common or class name for the goods or services.”

Screening and Clearance of a Domain Name

A domain name registrant or user should screen and clear names before registering or using them. A domain name registrant (trafficker or user) is liable in a civil action if they intentionally register a domain name that infringes on the trademark rights of a prior owner of a trademark. It is important to screen out choices of domain names that will be a civil liability or a criminal liability risk to a business by getting a trademark search that includes domain names (along with common law trademark names and federally registered trademarks) and getting a trademark clearance opinion on whether or not the domain name is infringing.

Infringement of a domain name may come from other domain names or from trademarks that have been used in commerce that are either ‘distinctive’ or ‘famous.’ Infringement may be for marks that are ‘identical’ or ‘confusingly similar’ if the mark is a distinctive mark or that is ‘identical’ to or ‘confusingly similar’ to or ‘dilutive’ of a mark if the mark is famous (a well-known mark).

The terms ‘identical’, ‘confusingly similar’ and ‘dilutive’ are legal terms of art that are specific to trademark law and are defined by case law. A trademark attorney can give specific advice on avoiding domain names that are infringing. Trademark applicants applying to the USPTO must meet all the procedural and substantive requirements of the Lanham Trademark Act and Trademark Rules of Practice, whether or not they are represented by an attorney.

In order to comply with the Anticybersquatting Consumer Protection Act (ACPA), which is also known as Title III-Trademark Cyberpiracy Prevention, a domain name must, in general, be a noninfringing use of a name. Some of the nonexclusive, nonexhaustive factors that a court may consider when deciding if the conduct of the domain name registrant, trafficker or user is actionable (done with bad faith intent) are:

• If the registrant attempts to use a domain name that is confusingly similar to someone else’s established domain name or trademarked name in order to profit from the goodwill of the trademark owner's name;
• If the registrant attempts to register a name in bad faith, such as in order to sell the name(s) to the trademark owners of those names;
• If the registrant attempts intend to divert consumers away from the trademark owner's website to a website that could harm the goodwill of the mark, either for purposes of commercial gain or with the intent to tarnish or disparage the mark, by creating a likelihood of confusion as to the source, sponsorship, affiliation, or endorsement of the site;
• If the registrant offers to transfer, sell, or otherwise assign the domain name to the mark owner or any third party for financial gain, where the registrant has not used, and did not have any intent to use, the domain name in the bona fide offering of any goods or services;
• If the registrant attempts to intentionally provide material and misleading false contact information in an application for the domain name registration or intentionally fail to maintain accurate contact information;
• If the registrant attempts to register a domain name that is the name of another living person, or a name that is substantially and confusingly similar, without such person's permission, if the registrant's specific intent is to profit from the domain name by selling it for financial gain to such person or a third party.

A nonexclusive, nonexhaustive list of factors that a court has the discretion to consider that act as a safe harbor provision to show that a use was not in bad faith include:

• Whether the registrant has any trademark or other intellectual property rights in the name;
• Whether the registrant has used the domain name in connection with the bona fide offering of any goods or services;
• Noncommercial or Fair use (such as use of a person’s own name or nickname); and
• First Amendment rights as traditionally applied under trademark law.

“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.” (Section 3002(a)ii of Act.)

Protection of a Domain Name--

Remedies available to a trademark owner/Domain Name Owner who has been infringed

Domain name registrants that have inherently distinctive names or famous names should monitor use of their names by others on the internet and in other commercial use for infringement or counterfeiting. Remedies and injunctions are available for those who have trademarks on the Principal Register of the USPTO against those who violate U.S. Trademark Law. A Common Law remedy of forced transfer of domain name is available for those who have inherently distinctive domain names or trademarks  that are being infringed through dispute resolution such as that the WIPO (World Intellectual Property Organization) provides.

Trademark registrants of a mark registered in the USPTO whose rights have been civilly infringed may be entitled to injunctions (stop the use of the infringing name, goods or services), the plaintiff may also be entitled to recover defendant’s profits, any damages sustained by the plaintiff (up to 3 times damages under some circumstances), and the costs of the action. The court in exceptional cases may award reasonable attorney fees to the prevailing party.

Violation of the Anticybersquatting Consumer Protection Act may lead to a court taking action against the domain name registrant with the following consequences: forfeiture, cancellation, or transfer of a domain name to the owner of the mark and other remedies including injunctive relief, recovery of defendant's profits, actual damages, and costs, and statutory damages (in cybersquatting cases), in an amount of not less than $1,000 and not more than $100,000 per domain name, as the court considers just.

Call us at (651) 500-7590 or email W@Tmk.law for a Strong Trademark. A Strong Trademark is Not Just a tool to increase sales to customers–it is also easier to sell to your investors & licensees.