Cybersquatting, also known as domain squatting, is the registration, use or sale of a domain with the bad faith intent to profit from the goodwill of a trademark owned by someone else. The cybersquatter may use the domain to divert business from users thinking they were accessing the domain of the rightful trademark owner, or engage in other improper conduct.
The United States has enacted the Anticybersquatting Consumer Protection Act (ACPA), now included as an amendment to the Lanham Act, 15 U. S. C. Section 1125(d). Enforcing rights under the ACPA requires filing a lawsuit. While state courts have jurisdiction to decide cases under the ACPA, most cases under the ACPA are filed in Federal court.
In order to prevail in an ACPA dispute the plaintiff must prove: (1) the defendant has a bad faith intent to profit from the use of the owner’s trademark and (2) the defendant registers, traffics in or uses a domain name that: (a) is identical or confusingly similar to the owner’s mark, (b) in the case of a “famous” mark, is confusingly similar or dilutive of the famous mark or (c) is a trademark protected by other laws, such as marks involving the Red Cross or the Olympics.
Arbitration of cypersquatting disputes is often a more cost-effective approach than filing a lawsuit, and can obtain the same primary result—transfer of the offending domain to the trademark owner. ICANN‑accredited registrars for all generic Top Level Domains (gTLDs) have adopted the Uniform Domain-Name Resolution Policy (UDRP). The UDRP offers a streamlined arbitration procedure accessible through private providers such as the ADR Forum in the United States (www.adrforum.com) and the UDRP arbitration services of the World Intellectual Property Organization (http://www.wipo.int/amc/en/).
In order to prevail in an ICANN cybersquatting dispute, the complainant must prove (1) the cybersquatter’s domain is identical or confusingly similar to a trademark in which the complainant has rights; (2) the cybersquatter has no rights or legitimate interests in the domain and (3) the domain has been registered and is being used in bad faith—usually for some commercial gain.
Ownership of a valid trademark is thus an essential element of any domain dispute proceeding. The trademark does not have to be registered. However having a registered trademark makes much easier to show ownership of valid trademark rights. For example, in the United States a trademark registered on the principal register creates a presumption that: (a) the registered mark is valid, (b) the registrant is the rightful owner of the mark, (c) the mark is distinctive of the registrant’s goods or services, and (d) the registrant has the exclusive right to use the mark in commerce for the goods or services described in the registration.
Cybersquatting is also common with country-code level domains (ccTLDs)—domains usually reserved for a country or dependent territory identified with a two-letter country code, such as .cn (China), .hk (Hong Kong), .ca (Canada) or .mx (Mexico). Most ccTLD registrars have adopted domain dispute resolution procedures similar to those used in ICANN UDRP disputes, including the three requirements needed to prevail.
However, even though the procedures may be similar, resolution of ccTLD disputes usually is limited to the forum established by the registrar, which is almost always in the country or territory associated with the country code. For example, domain disputes for the .hk domain are conducted only before the Hong Kong International Arbitration Centre. A few countries, such as Russia (.ru) have not adopted domain dispute resolution procedures. In those countries the only recourse is to file an action in the civil courts.
We have successfully prosecuted cybersquatting cases resulting in the transfer of the domain to the trademark owner not only in the United States, but in countries such as Australia, Bulgaria, China and the Ukraine. Regardless of whether the dispute is resolved by arbitration or by an action in the civil courts, we have substantial experience in California and Federal court litigation, and have established relationships with local counsel in many other countries to assist us in prosecuting domain disputes as well as in general intellectual property matters.