opinion

Dealing With Cybersquatters in a Competitive Landscape

Dealing With Cybersquatters in a Competitive Landscape
Maxine Lynn

"Cybersquatting” refers to the practice of buying a domain name identical or similar to a trademark of a third party in an effort to wrongfully profit from the goodwill of the associated brand. It is not some form of cybersex, although from its name, it sounds like it could be. Dealing with “cybersquatters” is a fact of life in business today, including in the ultra-competitive adult industry.

In the early years of the Internet, it was like the Wild West. Some cunning people were making bank by scooping up domain names that included famous trademarks, and then selling them for a large profit to the owners of those trademarks. At the time, there was no law against it.

Dealing with ‘cybersquatters’ is a fact of life in business today, including in the ultra-competitive adult industry.

In 1999, to curb this abuse, the U.S. Congress passed the Anti-Cybersquatting Consumer Protection Act (ACPA). In essence, the act makes cybersquatting illegal. It gives courts the power to order the cancellation of a domain name, or the transfer of the domain name to the owner of the trademark. Remember, however, the ACPA is a law of the U.S.

This means that in order to take an action under it, jurisdiction over the defendant or the domain name must be achieved in a U.S. court.

According to the ACPA, for a complainant (plaintiff) to prevail, s/he must prove that the cybersquatter: (1) registered the domain name with bad faith, and (2) the domain name includes language identical or confusingly similar to a trademark (or service mark) that is distinctive or famous.

The ACPA provides examples of what constitutes “bad faith,” including but not limited to:

  • Intent to divert consumers from the trademark owner’s website to a site accessible under the domain name that could harm the goodwill associated with the trademark, either for commercial gain or with the intent to tarnish or disparage the trademark.
  • Offer to sell the domain name to the trademark owner or any third party for a profit without having used (or without having an intent to use) the domain name in the bona fide offering of any goods or services.
  • Provision of false contact information when applying for the registration of the domain name.
  • Registration of multiple domain names that the person knows are identical or confusingly similar to marks of others that are distinctive at the time of registration of such domain names.

The act provides a safe harbor for innocent adopters of domain names. Specifically, the law states that bad faith shall not be found where it is proven that the person (defendant) believed and had reasonable grounds to believe that the use of the domain name was fair or otherwise lawful.

Another avenue for resolving domain name disputes is via proceedings under the Uniform Domain Name Dispute Resolution Policy (UDRP), adopted by the Internet Corporation for Assigned Names and Numbers (ICANN). The UDRP sets forth the terms and conditions in connection with a dispute between parties relating to a domain name.

According to the UDRP, arbitration panels of an approved administrative dispute resolution provider hear and decide the cases. Anyone in the world can file a complaint under the UDRP relating to a gTLD. For ccTLDs, the rules are a bit different and should be explored before filing a complaint.

The standard to prevail under the UDRP is similar to, but includes some significant distinctions from, the ACPA. The UDRP requires proof that:

  • The disputed domain name is identical or confusingly similar to a trademark (or service mark) in which the complainant has rights;
  • The respondent [cybersquatter] as no rights or legitimate interests in respect of the domain name; and,
  • The disputed domain name has been registered and is being used in bad faith.

The UDRP provides its own definition of “bad faith” separate from (though similar in spirit to) that of the ACPA.

Under the UDRP, only domain names that include trademarks or service marks are actionable, whereas under the ACPA, personal names are also actionable. This is very important for porn and cam performers to know in the case that a third party attempts to register and profit from their names or stage names.

An action under the UDRP is an expedited arbitration, and therefore, is usually resolved much more quickly than a lawsuit can be. In many cases, a decision is issued in 60 days or less. However, in a UDRP proceeding, cancellation or transfer of the domain name is the only remedy available to a complainant. Money damages cannot be collected.

Under the ACPA, on the other hand, as the saying goes, “good things come to those who wait.” A plaintiff who wins in a lawsuit under the Act can, in fact, be awarded money damages (in addition to an order of cancellation or transfer of the domain name). The judgement can be in the amount of actual financial losses, or in the form of statutory damages in an amount of up to $100,000 per domain name as the court considers just.

Note that a complainant may still wind up in court under the ACPA even after prevailing in a UDRP arbitration. According to the ACPA, an alleged cybersquatter (defendant) has 10 days from the date of losing in a UDRP proceeding within which to file a lawsuit in a proper court to preclude any ordered transfer or cancellation of the domain name. This means that if you think the cybersquatter will challenge an adverse UDRP decision, it will be more efficient to go directly to court instead.

Several high-profile companies in the adult industry have been successful recently in dealing with cybersquatters.

In October of 2017, Playboy Enterprises International, Inc., owner of more than 2,000 registrations of “Playboy” trademarks worldwide, won in a proceeding under the UDRP, against Wu Hongyan of Beijing, China, who had registered the domain name, Playboy.club.

In July of 2016, Multi Media LLC, owner and operator of the camsite, Chaturbate.com, prevailed over “Domain Admin, Whois Privacy Corp.” of Nassau, Bahamas, for its registration of Chaturbate-Chat.com. In both cases, the domain name at issue was ordered to be transferred to the respective complainant.

There is some truth to the expression, “more money, more problems.” The more success a website achieves, the more likely a cybersquatter would want to steal traffic via use of a confusingly similar domain name.

It is good practice to register as many domain names, including your company’s namesake trademarks, as possible. When someone grabs one up that you didn’t, however, you can turn to the ACPA or UDRP to help you right the wrong.

Maxine Lynn is an intellectual property attorney with the law firm of Keohane & D’Alessandro PLLC in Albany, N.Y. She focuses her practice on prosecution of patents for technology, trademarks for business brands, and copyrights for creative materials. Through her company, Unzipped Media Inc., she publishes the Unzipped Sex, Tech & the Law® blog at SexTechLaw.com. Disclaimer: The content of this article constitutes general information, and is not legal advice. If you would like legal advice from Maxine Lynn, an attorney-client relationship must be formed by signing a letter of engagement with her law firm.

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