Solutions for Brand Owners that are Victims of Online Trademark Infringement

In our last posting, we discussed the rise of online trademark infringement and counterfeiting. Today, we will discuss solutions and various ways that brand owners can protect themselves. As we mentioned before, online auctions have become a highly prevalent way for counterfeiters to infringe upon famous marks. In order to combat this, brand owners may want to consider bringing secondary (contributory) liability claims. In these claims, the mark owner must show that the defendant either intentionally induced trademark infringement or it continued to provide its services to specific users whom it knew, or had reason to know, were engaging in trademark infringement. As such, brand owners should note the courts will not accept willful blindness as an excuse on the part of the defendants. For a more extensive overview, readers will find that Lockheed Martin Corp. v. Network Solutions, Inc. 194 F.3d 980, (9th Cir. 1999); Gucci America, Inc. v. Hall & Associates, 135 F. Supp. 2d 409 (S.D.N.Y. 2001); and Ford Co. v. Greatdomains.Com, Inc., 177 F. Supp. 2d 628 (E.D. Mich. 2001) provide excellent guidance on how far liability extends.

Secondly, in relation to our previous discussion of cybersquatting and the harms that accompany it, brand owners in the United States should be relieved to know that there is a statute that provides legal relief. In 1999, the U.S. Congress passed the Anticybersquatting Consumer Protection Act (“ACPA”). The Anticybersquatting Consumer Protection Act, 15 U.S.C. § 1125(d), establishes a cause of action for registering, trafficking in, or using a domain name confusingly similar to, or dilutive of, a trademark or personal name.

Remember, as we discussed in the previous article, “cybersquatters” are those who are considered to have “malicious intent” when they register domain names that are strikingly similar or derivative of a mark. Common examples of malicious intent include attempts to sell the domain back to the mark owner at an artificially inflated price or purposely using the domain as a means to derive increased ad revenue from visitors that land on the page mistakenly.

Remedies under the ACPA include: injunctive relief, forfeiture or cancellation of domain name, transfer of domain name, actual damages, statutory damages per domain name in lieu of actual damages, and attorney’s fees in exception cases. The ACPA also provides in rem remedies.

When bringing an action under the ACPA, brand owners should recognize that courts typically use a two-part analysis when determining whether the defendant is guilty. First, courts require a showing, on the part of the domain name registrant, of bad faith intent to profit off the mark. In determining whether there is bad intent, the court will consider 9 factors:

1. The domain registrant’s intellectual property rights in the domain name; 2. Whether the domain name contains the registrant’s legal or common name; 3. The registrant’s prior use of the domain name in connection with a bona-fide offering of goods or services; 4. The registrant’s bona-fide noncommercial or fair use of the mark in a website accessible by the domain name; 5. The registrant’s intent to divert customers from the mark owner’s online location that could harm the goodwill of the mark, for commercial gain or with the intent to tarnish or disparage the mark; 6. The registrant’s offer to sell, transfer, or otherwise assign the domain name to the mark owner or to a third party for financial gain, without having used the mark in a legitimate site; 7. Whether the registrant has provided misleading or false contact information when applying for registration of the domain name; 8. Whether the registrant has registered or acquired multiple domain names that are identical or confusingly similar to the marks of others; 9. The extent to which the mark in the domain is distinctive or famous.

Secondly, the court will analyze whether the domain name registrant is registering, trafficking in, or using a domain name that is a) identical or confusingly similar to a distinctive mark; b) identical or confusingly similar to or dilutive of a famous mark; or c) whether the trademark is protected by 18 U.S.C. § 706 (marks related to the Red Cross) or 36 U.S.C. § 220506 (marks related to the Olympics).

For swifter justice, brand owners may prefer to utilize the Uniform Domain-Name Dispute-Resolution Policy (“UDRP”). The URDP may be preferable to some mark owners because it allows a mark owner to challenge domain name registrations in expedited administrative proceedings. For many, this method is usually faster and cheaper than an ACPA lawsuit. However, brand owners should note that the only remedies offered in a UDRP proceeding are domain cancellations and domain name transfers.

If brand owners want to effectively use these methods, they must understand how courts are wielding the ACPA and when to file for a UDRP. Stayed tuned for the next post where we discuss just that.

Sources:

18 U.S.C. § 706 Uniform Domain-Name Dispute-Resolution Policy: http://www.icann.org/en/help/dndr/udrp Lockheed Martin Corp. v. Network Solutions, Inc. 194 F.3d 980, (9th Cir. 1999) Gucci America, Inc. v. Hall & Associates, 135 F. Supp. 2d 409 (S.D.N.Y. 2001) Ford Co. v. Greatdomains.Com, Inc., 177 F. Supp. 2d 628 (E.D. Mich. 2001) Anticybersquatting Consumer Protection Act: http://www.gpo.gov/fdsys/pkg/BILLS-106s1255is/pdf/BILLS-106s1255is.pdf

For more information, please visit our trademark service page.

Klemchuk LLP is an Intellectual Property (IP), Technology, Internet, and Business law firm located in Dallas, TX.  The firm offers comprehensive legal services including litigation and enforcement of all forms of IP as well as registration and licensing of patents, trademarks, trade dress, and copyrights.  The firm also provides a wide range of technology, Internet, e-commerce, and business services including business planning, formation, and financing, mergers and acquisitions, business litigation, data privacy, and domain name dispute resolution.  Additional information about the IP law firm and its IP law attorneys may be found at www.klemchuk.com.

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