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Too often a business is surprised to learn that its customers are directed to a website other than its own because the website has a similar domain name. Worse yet, a customer, assuming he or she knows a company’s domain name, will send an email to an employee of the company using the wrong domain name in the email address. If that domain name is registered, the customer’s email may be delivered to another party. Often, companies only discover this when they receive the misdirected email along with an offer to sell the domain name to the business. One of the main reasons for these predicaments is that domain name registration is on a first come, first serve basis. Therefore, if you don’t register the domain names that are important to your company, others might.
Of course, someone may have registered a domain name incorporating one of your company’s trademarks with the intent of profiting from it by either diverting your customers to their website or with the intent of selling the domain name registration to you for more than the cost of registration (typically a lot more than cost of the registration). In either case, you may be dealing with the practice that is typically referred to as “cybersquatting”.
In the event that someone is cybersquatting a domain name which incorporates a trademark of the company, you can sue under the provisions of the Anticybersquatting Consumer Protection Act (ACPA). Under the ACPA, a trademark owner must prove that:
- the trademark is afforded protection under federal trademark law at the time the domain name was registered; and
- the domain name is identical or confusingly similar to the trademark; and
- the domain name registrant had bad faith intent to profit from the trademark.
If successful, a trademark owner may be entitled to monetary damages, injunctive relief and cancellation or transfer of the offending domain name registration to the trademark owner. The down side to bringing a suit under ACPA is the cost associated with litigation (which can be in the tens of thousands of dollars).
A more cost-effective approach to litigation is to file a complaint under the Uniform Domain Name Dispute Resolution Policy (UDRP) which is an arbitration proceeding created by the Internet Corporation for Assigned Names and Number (ICANN). ICANN is responsible for, among other things, the management of the generic top level domains (for example, .com, .org, and .net). To prevail under the UDRP, a complaint must establish that:
- the domain name is identical or confusingly similar to a trademark or service mark in which the complaint has rights; and
- the domain name registrant does not have any rights or legitimate interests in the domain name; and
- the domain name was registered and is being used in bad faith.
Unlike litigation, a trademark owner cannot recover monetary damages or get injunctive relief under the UDRP. However, if successful, a trademark owner can have the domain name registration transferred to it.
Components of a Domain Naming Strategy
The Anticybersquatting Consumer Protection Act or the Uniform Domain Name Dispute Resolution Policy will not be useful to a company that cannot establish valid trademark rights and prove the bad faith of the domain name registrant. The only option for a company then is to purchase the domain name from the domain name registrant, often at an inflated price. Even if a company can prevail in a proceeding, it still may be more cost effective to purchase the domain name directly from the domain name registrant. As is often the case, preventive measures may be the best protection. In this Internet era, companies need to develop a domain name strategy to protect important domain names. Use these steps to develop a domain name strategy tailored to your company:
1. Create – Create a list of important names, including company and division names, trademarks, service marks, product names, industry terms, etc. Include abbreviations and common typos of these names.
2. Review – Review the list to identify the key domain names for your business. While it’s typically not cost effective to acquire registrations for your entire list, make a determination of which domain names are important to your business.
3. Register – Once your final list of domain names is ready, register each domain name with as many top level domain names that are available (e.g. .com, .org, .net, .edu, etc.). You don’t want someone getting a registration with an identical second level domain name (e.g. the “gcglaw” in the domain name “gcglaw.com”) using a different top level domain name (e.g. .com, .edu, org, .net).
WARNING: When registering domain names never look to see if a domain name is available without purchasing it at that time. Unscrupulous parties can monitor domain name searches and will often purchase these domain names (at a minimal cost) with the intent of selling them to you at a much higher price.
4. Implement – Consult with trademark counsel to implement a company trademark strategy. Federal and state trademark registrations may go a long way in proving a case against a cybersquatter and getting the domain name registration transferred to your business.
5. Track – Track your domain name registration renewal dates. Again, there are unscrupulous parties tracking domain name registration expirations who will purchase recently expired domain name registrations. An accidental expiration of a domain name registration may cost you more (often a lot more) than the standard renewal fee.
6. Evolve – Remember that your domain name registration strategy should not be static. As your business evolves, so should your registrations of domain names. Consider registering domain names for new product and service offerings as part of your company’s larger branding strategy. Review your domain name registrations on a quarterly or annual basis. On review, ask yourself how has your business evolved (e.g. new product offerings, business lines, etc.)? Based on this evolution, determine what additional domain names your business should register.
Prevention is often the best and most cost-effective practice. By implementing a domain name strategy that evolves with your business, your customers will be more aware of your company and you just might prevent having to incur the costs of acquiring a domain name from another.
Peter Cline is a lawyer with the law firm of Gallagher, Callahan and Gartrell, P.C. in Concord, New Hampshire. Peter advises established and start-up companies in a wide range of intellectual property issues, including branding, trademark and domain name strategies.
* Peter Cline is admitted in New Hampshire.