I spoke with Dan Pepper of the Pepper Law Group not too long ago, about copyright and trademark. There is a lot of copyright discussion these days; piracy and lawsuits, but our conversation drifted to a discussion of domain names, and when is the use of someone else's trademark in a domain name considered infringement? So many domain names can contain terms trademarked by another party, but does that mean the URL owner is actually infringing on the trademark owner? Dan told me there are legitimate and non-legitimate scenarios, and you need to know that some are perfectly permissible. I’ve seen some other articles on this subject on the ‘net, and we will likely see more as people and businesses move to protect their hard-earned branding and marketing efforts.
Dan said that for the use of a particular domain to constitute cyber squatting, the owner of the trademark must generally prove they hold legitimate trademark rights in that name, that the infringement of the domain names involved allegedly present as “identical or confusingly similar” to the trademarked name, that there is no legitimate right of the allegedly infringing URL owner to use the name, and the one that’s hard to prove - that the URL in question was registered and used in bad faith.
He further explained that there are subtle differences between cases where commercial enterprise trademarks are concerned in relation to other types of trademarks. Commercial enterprises very often have names very similar to each other and, consequently, multiple parties may all retain genuine claims to the domain and, in fact, there are usually as many different uses of the name as there are parties claiming it. It’s a complicated scenario, and he compared it to the use of a celebrity name or trademark, where it is much more obviously a unique personal celebrity brand, and almost always more difficult for the domain URL owner to prove that they have a legitimate right to use the celebrity's trademark – if it happens to really be their own name, that can become a factor.
Dan said commercial enterprises have the ability to access a number of defenses that are not available to those defending a celebrity domain name trademark action. He proposed that commercial defendants could argue they operate a business with a different nature and purpose from that of the trademark holder. This can be effectively bolstered where the business is not in competition with that of the trademark holder. If the services of the domains in question complement the trademark holder’s business, this can actually help their cause in retaining use of the domain.
He further cautioned that if you do choose to use a domain name that is in conflict with any of the millions of commercial names in existence online, you always run the risk of losing it. As we expend marketing budgets and sweat equity marketing our websites and building online brands – the prospect of being forced to relinquish your domain after establishment of your online presence will likely destroy your enterprise. Finding a new momentum or your past efforts will likely be impossible. It appears the message here is - don’t take shortcuts and choose your domain name carefully...
He offers the following trademark rules as a guide, and said that every attorney will advise you to seriously consider these:
- Names that identify the source of products or services in the marketplace are trademarks.
- Trademarks that are clever, memorable or suggestive are protected under federal and state law.
- Trademarks that are descriptive and have achieved distinction through sales and advertising can be protected under federal and state law.
- One trademark legally conflicts with another when the use of both trademarks is likely to confuse customers about the products or services, or their source.
- In the case of a legal conflict with a later user, the first commercial user of a trademark owns it.
- If a legal conflict is found to exist, the later user will likely have to cease using the mark - and may even have to pay the first trademark owner damages.
Dan continued, telling me if you can answer ‘no’ to all of these questions, you can feel reasonably confident that you can use a URL without fearing the creation of a legal conflict. If you answer yes to any of them, you will always be facing a possible future legal challenge. If you are unsure, run your concerns by a trademark attorney for an expert opinion. You can anticipate that the attorney will be more conservative than is actually necessary [surprise!], but you can still benefit from having an experienced review of your choices, and have a better understanding of what your choices and future expectations may be.
Daniel A. Pepper, Esq. is the managing member of the New Jersey-based law firm Pepper Law Group, LLC, and has been practicing law since 1994. His practice areas include First Amendment rights, obscenity law, Internet Law, software and technology licensing, electronic commerce, and intellectual property protection. Mr. Pepper regularly advises his clients on cross-border technology transfers, affiliate, distribution, and marketing, technology deployment, e-commerce and Internet strategies, including compliance with the Digital Millennium Copyright Act, and data security and privacy management. The Pepper Law Group website can be found at: www.informationlaw.com, and the firm can be reached at 908.698.0330.
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