As noted in the introduction, the existing case law has developed under two primary causes of action: trademark infringement and dilution. In addition to reviewing the basic elements of infringement and dilution, it is important to keep in mind that the goal of trademark law is to promote the orderly functioning of the market through avoidance of confusion and deception. Unlike other forms of Intellectual Property, trademark law is not designed to reward the owner of the right or as an incentive to create the intellectual property in the first place. See the Theories of Intellectual Property orientation materials for additional information.
The following is a very brief description of the elements of trademark infringement and dilution. For additional information on Trademark doctrine, see the Trademark Primer.
Elements required for trademark infringement:
Elements required for trademark dilution (added by Congress in 1995 and reinforced in 1999)
The case law interpreting how trademark law applies to domain name disputes is best understood by analyzing cases in different categories of disputes.
Cases of cybersquatting often cause the most concern to trademark holders and have been the subject of the majority of litigated disputes. There is no single accepted definition of cybersquatting. Generally, however, if someone who lacks a legitimate claim registers a domain name with the intent to sell the name, prevent the trademark holder from gaining access to the name, or divert traffic, this activity will be considered cybersquatting. A close corollary to cybersquatting is typosquatting - where the domain name registrant registers a variant of a famous trademark.
The case law in the area of cybersquatting is fairly settled. With only one possible exception, no cybersquatter has won a court case against an intellectual property holder anywhere in the world. Despite this strong trend against cybersquatters, new instances of cybersquatting continue to arise. For instance, Intel recently filed suit against the registrant of www.pentium2.com which leads to a pornographic web site. Typosquatting also continues to occur. Two recent cases include the wwwpainewebber.com litigation (note the absence of the "." between the www and painewebber) and the suit by Microsoft and MSNBC against the registrants of misrosoft.com and mnsbc.com for infringement.
When confronted with such bad faith behavior courts have stretched existing law in order to prevent the cybersquatter from maintaining control over the domain name. Traditional trademark infringement analysis would not have covered many cybersquatting cases. Often cybersquatters register the domain name but do not post a web site under that name. Thus there can be no likelihood of confusion as required for trademark infringement. In such cases, the trademark holder would have to rely on a dilution claim. Additionally, even where a web site has been posted, it often was not commercial and thus seemingly didn't meet the "use in commerce" requirement for both infringement and dilution.
The Ninth Circuit in Panavision v. Toeppen set out a broad interpretation of "use in commerce" that has been followed by subsequent courts. In order to get at cybersquatters, the Ninth Circuit and subsequent courts have held that while mere registration does not constitute use in commerce, the offer to sell the domain name to the trademark holder is sufficient to meet this requirement.
In addition to broadly interpreting the "use in commerce" requirement to tag cybersquatters, courts have found dilution in cases where traditional dilution analysis might not have applied. For a dilution claim to be successful, the mark must be famous. A determination of famous mark status is supposed to be reserved for select trademarks. But courts seem to be willing to stretch the rules here and have found dilution in many cases where the mark might not have been considered famous under ordinary circumstances. For instance, the following trademarks have been found famous in cybersquatting cases:
In contrast, the trademarks Clue (for the well-known board game) and Avery Dennison have been held not famous by courts where they determined that the registrants were not acting in bad faith. In Avery Dennison v. Sumpton, the Ninth Circuit held that to qualify as famous, the mark must be truly prominent and renowned.
- Intermatic - Intermatic Inc. v. Toeppen
- PapalVisit - Archdiocese of St. Louis v. Internet Entertainment Group, Inc.
II. Competing Use
In several cases, competitors have registered their adversary's trademark. As with cybersquatting, the case law in this area is fairly well settled and courts have ruled against such behavior. Here, as with cybersquatting it appears that the courts have stretched existing law where necessary. For instance, in Green Products Co. v. Independence Corn By-Products Co., (ICBP) both companies were direct competitors in the corncob by-product industry. ICBP registered <greenproducts.com>, but had not yet posted a web site when Green Products sued them. Even though no web site had been posted, the court held that ICBP intended to use its confusing domain name to lure potential customers to the site once it was created. While customers might not be confused as to affiliation once they got to the site, they may simply purchase ICBP's products rather than searching for Green Products' real site. Under this scenario, ICBP would benefit unfairly from the use of Green Products' name. On these facts the court found that there was infringement.
The Ninth Circuit has since followed this line of reasoning in domain name cases including Brookfield Communications v. West Coast Entertainment Corp. and Interstellar Starship Services Limited v. Epix, Inc.. Expanding on the Green Products analysis, the Ninth circuit found infringement where the name causes "initial interest confusion." The theory is that although web users will realize that they have reached the wrong site, they may be satisfied with the goods or services offered at the competitive site and not continue searching for the original site they had intended to visit.
Although courts have always ruled against such competing uses, cases
continue to arise. For instance, amazon.com recently sued the registrants
of amazon.gr, a site that sells books online. The registrant of amazon.gr
is a U.S. based company and amazon.com has sued them in U.S. court.
Thus this case will not raise the issue as to how international courts
would deal with registrations of trademarks by international competitors.
III. Non-competing Use - Legitimate Claims
The area of legitimate competing claims is the most complex in this field. Consequently, it remains more unresolved than other domain name disputes. Because the trademark system is divided territorially and by industry, many companies can use the same name as a trademark without causing infringement. For example, the trademark United is used by United Van Lines, United Airlines, the United Way, and many other organizations. Only one of these entities, however, can register united.com.
While courts have seemingly stretched trademark law in cybersquatting or competing use cases, that trend is not mirrored in legitimate claims cases. Thus, in legitimate claims cases, courts have emphasized that mere registration of domain name without more (such as an offer to sell or an intent to block the trademark holder from using the name) is not sufficient to constitute commercial use. In HQM v. Haftield, the court held that mere registration or activation of a domain name does not constitute commercial use even when the domain name includes the .com designation.
There are two types of legitimate competing claims disputes. In the first type, the trademark holder sues a domain name holder who has a legitimate claim, but no trademark rights. Because the domain name system is not a corollary to the trademark system, a domain name registrant need not have a corresponding trademark in order to have a legitimate right to the name. For example, in Gateway 2000 v. Gateway.com, Inc., Gateway.com, Inc. reserved the domain name gateway.com years before the mega computer maker Gateway 2000 attempted to register the name. Gateway 2000 sued but lost because the court found that Gateway.com had a legitimate reason for owning the domain name and had chosen it six years earlier - long before domain names had the value that they do today and before Gateway 2000 became a well-known trademark. One of the keys to the decision was that the defendant was not opportunistically trying to capture value by seizing a well-known mark.
In the second type of legitimate dispute both parties have a trademark claim in the name. While one might think that the first to register the domain name would easily win in such a case, that is not always the outcome. In Data Concepts, Inc. v. Digital Consulting, Inc. both entities had trademark rights in DCI. Data Concepts registered the domain name dci.com in 1993. Digital Consulting attempted to retrieve the <dci.com> domain name from Data and the dispute ended up in court. It would seem in these cases (where both parties have trademark rights) that the first to register the domain name would be able to keep it. The Sixth Circuit, however, ruled that there was a possibility of infringement. Since trademark infringement is a mixed question of fact and law, the dispute must go to a full trial for an infringement determination.
One rule that has emerged from the DCI case, and many others, is that summary judgment in infringement cases will often be inappropriate where there is a legitimate competing claim (this doesn't apply to cybersquatting cases where the courts are comfortable finding infringement in summary judgment). Therefore these cases will often have to go through trial before the dispute is resolved. Thus the parties in these cases are subject to an extremely lengthy and expensive process and no alternative dispute resolution mechanism is available.
In dilution cases courts are more likely to resolve the issue themselves. In Hasbro v. Clue Computing - one of the most recent cases - the court ruled that holders of a famous mark are not automatically entitled to use that mark as a domain name. The court held that "if another internet user has an innocent and legitimate reason for using the famous mark as a domain name and is the first to register it, that user should be able to use the domain name, provided that it has not otherwise infringed upon or diluted the trademark."
Of course, it isn't always easy to determine who has a legitimate competing claim and who is simply creating the appearance of such a claim. Consider the following example where apparently a high school senior created a web site located at msdwonline.com to share his passion for mountain-bike racing. The site is entitled Mud Sweat's Downhill World (msdw) after a local cycling shop named Mud Sweat. While at first glance, the story seems like one of a legitimate use by an innocent youth, Morgan Stanley Dean Witter filed suit contending that the bicycle site is merely a front for a cybersquatter. Once you look deeper, it is clear that there are some cybersquatting elements to the case. For one, the biking theme did not appear on the web site until 10 days after the suit. The web site creator's father has registered many domain names derived from the names of investment banks. These names include goldmansachsdirct.com, jpmorganonline.com and others. Additionally, when Morgan Stanley discovered that the domain name they desired was taken, they offered $10,000 for the name, but the sellers demanded $75,000. While this case turns out to be a thin veil for cybersquatting, it is likely that the cover ups will become more clever. With courts ruling against cybersquatting in every instance while legitimate use is often protected, there is significant value in establishing a legitimate competing claim. The emphasis on legitimate claims in the UDRP and the new legislation have increased the value in establishing such a claim.
Defining the border between cybersquatting and legitimate disputes can be complex. For instance, many people have registered domain names that may be useful toothers in the future in the hopes that they'll be able to auction off these names. Numerous examples of these registrations can be found by looking at auction sites such as ebay. While some of these domain name registrants may have intended to use the domain name and have since changed their mind, others never had an intent to use the name but only an intent to resell. If the names that they register are not trademarks (either common law or registered) it is not clear that such behavior constitutes cybersquatting. The UDRP and the Anti-Cybersquatting legislation only address instances where the domain name incorporates or is similar to a trademark. Thus, if a new company is trying to decide upon a name and chooses a name which has already been registered as a domain name by an auctioneer, it is unlikely that the UDRP or the Anti-Cybersquatting legislation will apply.
Domain name registrants who originally intend to use the domain name
for legitimate purposes but later choose to sell the name may also find
themselves walking the fine line between legitimate use and cybersquatting.
The UDRP includes "use or demonstrable preparations to use" a domain name
as evidence of a legitimate claim to the name. The Anti-Cybersquatting
legislation, however, only counts prior use - not preparation to use -
the name as evidence of legitimacy.
IV. Reverse Domain Name Hijacking
Reverse domain name hijacking occurs when the trademark holder attempts
to get a domain name from a party where the party has a legitimate competing
claim and there is no question of infringement or dilution. As noted
above, the domain name system is not a corollary to the trademark system.
Nonetheless, some trademark holders behave as though it is. They
seem to believe that no one has the right to use a domain name that might
relate to a trademark or product name held by the company. Thus they
sue legitimate domain name registrants to recover the domain name even
though there has clearly been no infringement or dilution. While
there are many reported instances of this behavior, it is estimated that
most domain name holders simply give in to the trademark demands and thus
the majority of disputes are never publicized. Again, the line between
categories is often difficult to draw. Thus the distinction between
legitimate competing claims and cases of reverse domain name hijacking
may be unclear. There are some clear instances, however, that serve as
an example of the behavior often called reverse domain name hijacking.
V. Free Speech, Product Commentary and Parody
As with other forms of intellectual property, trademark rights are subject to fair use. See 15 USC 1115(b)(4) and 15 USC 1125(c)(4). Additionally, the First Amendment allows a person to use another entity's trademark for purposes of commentary or parody. However, the First Amendment and the fair use provisions of the Lanham Act do not protect all uses of another's trademark. Because many of these free speech or parody cases have been settled outside the litigation context, there is not much case law on the subject. The combination of free speech and product commentary cases suggest that registration of the exact trademark as a domain name is generally disallowed by courts while registration of a name that incorporates the trademark such as "chasebanksucks.com" may be upheld.
For example, the court held in Archdiocese of St. Louis v. Internet Entertainment Group, Inc., that the defendant's use of papalvisit.com for a site with limited information on the Pope's visit and advertising for an adult entertaining web site diluted the plaintiff's famous mark. In Jews for Jesus v. Brodsky the court held that defendant's use of jewsforjesus.org to intercept potential converts seeking the Jews for Jesus organization diluted and infringed the Jews for Jesus mark. In Planned Parenthood Federation of America v. Bucci, the court held that "[d]efendant's use of another entity's mark is entitled to First Amendment protection when his use of that mark is part of a communicative message, not when it is used to identify the source of a product." By using the mark as a domain name, the court stated that defendant identified the web site as being the product of the plaintiff, not merely a communicative message and thus not protected by the First Amendment.
In contrast to these cases, courts may uphold names where the trademark is simply incorporated into the domain name. Thus in Bally Total Fitness Holding Corporation v. Andrew Faber, the defendant used <www.compupix.com/ballysucks> as the URL for a site devoted to consumer complaints about Bally Total Fitness. The court granted summary judgment for the defendant concluding that the average consumer would not be likely to assume that Bally was affiliated with a site dedicated to critiquing the organization so there was no trademark infringement. Similarly the dilution claim failed because the site was not commercial.
For an amusing parody example, see Yahooka.com:
The guide to marijuana on the Internet. Although Yahoo! sent a cease
and desist letter in January 1999, the site is still operational.
It doesn't appear that Yahoo ever filed suit against Yahooka.
Domain Name case law also presents some other interesting issues.
One issue that is not often discussed but is important in many domain name cases is whether or not there has been "prior use" of the trademark. The courts have determined that "registration does not in itself constitute 'use' for purposes of acquiring trademark priority." Brookfield Communications v. West Coast Entertainment Corp. See also CCBN.com v. C-Call.com. Note that in most foreign countries trademark rights belong to the first to register the mark, rather than the first to use the mark as in U.S. law.
2. Registrar Liability
To date, the courts have denied registrar liability in suits against NSI. In the most recent confirmation of this trend, the Ninth Circuit upheld a lower court's determination that the registrar cannot be held liable for contributory trademark infringement for registering infringing domain names. Lockheed Martin Corp. v. Network Solutions, Inc.
3. Prevention of Registration by Prior Offenders
In WorldSport Networks v. ArtInternet, the court initially ordered that NSI not allow anyone to register a name similar to the one that was determined to infringe. NSI challenged this order claiming that it did not have the resources to evaluate every requested domain name for possible similarity. In April, 1999, the court amended its order to only require that NSI screen applications by the defendant for similarity. NSI again sought modification. In a January 3, 2000 order, the court once again modified its earlier decision. NSI is no longer responsible for preventing similar registrations by the defendants. Instead, if the defendants register a domain name, they are required to file with the Court, and with the plaintiffs, a report setting forth that the registration does not violate the court's order. Thus the court determined that NSI need not screen domain name registrations in order to comply with the court order.
4. Class Actions
In Omega Protein Corp. v. Flom, plaintiffs filed a class action suit against a defendant who had registered hundreds of trademarks as domain names. The plaintiffs claimed that cybersquatters typically charge less than the cost of litigating individual infringement claims and thus they should be allowed to file a class action. As of March, 2000, there is no available decision on the Omega Protein suit.
You can find summaries and links to the full text of some additional
names cases. Summaries of many cases are also available at the
Coie and Phillips
Nizer webistes. The doctrinal
summaries in our library are available for additional clarification
of trademark doctrine, if necessary.