Cybersquatting – What California Businesses Should Know

Information About Cybersquatting For California Business Owners

What is Cybersquatting?

Cybersquatting, also known as cyberpiracy or domain squatting, is the unlawful practice of registering, selling, purchasing, or using a domain name that is confusingly similar or identical to another business’ trademark. Essentially, cybersquatting is trademark infringement through the registration, use, or sale of internet domain names.

Cybersquatting in the Early Days of the Internet

Cybersquatting became commonplace in the early days of the internet before many businesses realized the importance of securing relevant domain names. Cybersquatters would register domain names using the trademarks of well-known businesses or domain names very similar to those trade names. The cybersquatters would then attempt to sell the domain names to those companies once their value became appreciated. Because businesses now recognize the critical importance of securing relevant domain names, blatant cybersquatting is generally less common than in the past.

What Does the Law Say About Cybersquatting?

Today, federal trademark laws permit trademark owners to sue and stop cybersquatters. The Anticybersquatting Consumer Protection Act (the “ACPA”) gives trademark and service mark owners the right to sue individuals or business who register, traffic in or use a domain name “in bad faith” that is identical or confusingly similar to a trademark or service mark. If the protected mark is a “famous” mark, the right to sue exists if the infringing domain name is identical or confusingly similar to or dilutive of the famous mark. The ACPA is found at 15 U.S.C. § 1125(d).

What Must A Plaintiff Prove in a Cybersquatting Case?

To prevail in a cybersquatting case, the plaintiff must prove that the name in question is entitled to protection under the trademark laws and that the defendant has registered, trafficked in or is using the domain name with a bad faith intent to profit financially.

Does the Infringing Domain Name Need to Be Identical to a Protected Trademark or Service Mark?

No. To establish a claim for cybersquatting, the plaintiff only needs to show that the defendant’s domain is similar enough to the plaintiff’s trademark or service mark to be likely to create confusion between the two.

What Qualifies as “Bad Faith” Intent Under the Cybersquatting Law?

The ACPA identifies nine factors courts may consider in determining whether bad faith intent exists:

• the trademark or other intellectual property rights of the defendant, if any, in the domain name;
• the extent to which the domain name consists of the legal name of the defendant or a name that is otherwise commonly used to identify the defendant;
• the defendant’s prior use, if any, of the domain name in connection with the bona fide offering of any goods or services;
• the defendant’s bona fide noncommercial or fair use of the mark in a site accessible under the domain name;
• the defendant’s intent to divert consumers from the mark owner’s online location to a site accessible under the domain name that could harm the goodwill represented by the mark, either for 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;
• the defendant’s offer to transfer, sell, or otherwise assign the domain name to the mark owner or any third party for financial gain without having used, or having an intent to use, the domain name in the bona fide offering of any goods or services, or the defendant’s prior conduct indicating a pattern of such conduct;
• the defendant’s provision of material and misleading false contact information when applying for the registration of the domain name, the defendant’s intentional failure to maintain accurate contact information, or the defendant’s prior conduct indicating a pattern of such conduct;
• the defendant’s registration or acquisition of multiple domain names which the defendant knows are identical or confusingly similar to marks of others that are distinctive at the time of registration of such domain names, or dilutive of famous marks of others that are famous at the time of registration of such domain names, without regard to the goods or services of the parties; and
• the extent to which the mark incorporated in the defendant’s domain name registration is or is not distinctive and famous within the meaning of Section 1125(c)(1) of the Lanham Act.

However, bad faith intent does not exist where the court determines that the defendant believed that use of the domain name was a fair use or was otherwise lawful, and that belief was reasonable.

What Remedies Are Available If Cybersquatting Is Proven?

Under the ACPA, a court can order the forfeiture or cancelation of a domain name or the transfer to the owner of the mark. In lieu of proving actual damages, a cybersquatting plaintiff is entitled to statutory damages, of of not less than $1,000 and not more than $100,000 per domain name, as the court considers just.

What If A Cybersquatter Cannot Be Found?

If a cybersquatter cannot be found and served with a lawsuit, the ACPA allows victims to bring an “in rem” action against the domain name itself if the owner is not able to obtain personal jurisdiction against a cybersquatting defendant, or through due diligence, was not able to find a person who would have been a defendant in a civil action.

Remedies in an in rem action are limited to forfeiture or cancelation of the domain name or transfer of the domain name to the plaintiff.

Alternatives to Litigation

If the cybersquatting victim’s primary objective is cancelation or transfer of the infringing domain name, rather than obtaining monetary damages, the victim should consider filing a complaint under the Internet Corporation for Assigned Names and Numbers’ (ICANN) Uniform Dispute Resolution Policy (UDRP). The UDRP empowers ICANN to transfer or cancel a domain name following an arbitration, which is typically faster and less expensive than litigation in court.

Contact Our Orange County, California Office Today

If you or your business is the victim of cybersquatting or you believe claims of cybersquatting may be asserted against you, contact the Law Offices of Corbett H. Williams today for a free, confidential consultation at 949-570-6779. You may also contact us using the form at the bottom of this page, and we will respond promptly.h3