Cybersquatting in the United States

Cybersquatters

by Emmett Berg

Cybersquatters turn IP attorneys into URL police.

In response to cybersquatters who hijack the online presence of popular brands, intellectual property lawyering on the wild, wild Web has taken a strategic turn. “Early on, we concentrated on securing [website] domain names on a proactive basis, but now we are spending more time on a defensive basis,” says Monique Cheng Joe, senior counsel for NBC Universal who helps oversee the corporation’s trademarks.

The practice of effectively holding a Web address hostage through cybersquatting isn’t new, but attorneys are increasingly taking on the role of Internet cop, defending trademarks through legal or administrative remedies in both local and global venues. The labyrinthine practice of online trademark defense may soon become even more complex, given an initiative before the Internet Corporation for Assigned Names and Numbers (ICANN), which oversees American domain names. The idea is to enable the introduction of unlimited Web address suffixes, known in geek-speak as generic top-level domains. (Current examples include .com and .org.) If approved, the overall number of websites likely will mushroom.

“Whatever ICANN does over the next two years, the legal issues that surround domain names will be a steady source of referrals for trademark lawyers everywhere,” observes Alan C. Drewsen, executive director of the International Trademark Association in New York.

A long-standing ploy of cybersquatters involves registering and then selling coveted website addresses. But that’s not necessarily against the law, and the most expensive legitimately acquired address to date – Insure.com – went for $16 million in 2009.

More legally problematic are the operators who buy, in bad faith, domain names that are confusingly similar to established brands, with the intention of either siphoning Web traffic from a corporation or redirecting consumers to counterfeit portals. “Typosquatting,” which targets poor spellers, also causes headaches.

Another revenue-generating ploy by what appear to be professional cyberhucksters is to concoct fraudulent pay-per-click ads. “If [cybersquatters] rip off one famous brand, generally they’re ripping off a lot of them,” says Holly Pranger, who runs a boutique IP practice in San Francisco.

This means attorneys are spending more time on Web-related trademark transgressions. “This is not a fad or going into diminution,” notes Larry Townsend, a sole practitioner in San Francisco who is also of counsel with Owen Wickersham & Erickson. “The interrelationship between trademark and domain names continues to be a bigger part of our practice.”

Certainly, trademark holders are not without remedy. Companies can demand “takedowns” of bogus ads by going through a search engine company’s complaint process. And infringement suits can be brought under federal laws such as the Lanham Act (15 U.S.C. §§ 10511127) or the Anti-Cybersquatting Consumer Protection Act (15 U.S.C. § 1125(d)). California’s unfair competition statutes also provide avenues for redress (Cal. Bus. & Prof. Code § 17200).
But slim are the chances of extracting damages from enigmatic cybersquatters, many of whom operate from foreign countries. Lawyers are left to work through an ICANN-sanctioned process to seek the transfer or cancellation of a disputed website.

Because the private entities that manage domain names – called registrars – don’t always implement the orders that come out of these administrative proceedings, attorneys may have to remain involved, pursuing cease-and-desist actions (some rogue registrars have even lost ICANN accreditation). And the parties can always decide to litigate if the court has jurisdiction over the defendant.

But blindly cracking down on anything that appears to be cybersquatting won’t do, say First Amendment advocates such as Corynne McSherry, a senior staff attorney at the Electronic Frontier Foundation. The San Francisco organization is currently representing The Yes Men, an activist-artist duo that the U.S. Chamber of Commerce sued for trademark infringement over a well-publicized spoof of its website.

“In the name of trademark policing, legitimate speech gets taken down,” McSherry says.

The Anticybersquatting Consumer Protection Act

From the USPTO:

On November 29, 1999, President Clinton signed into law the Anticybersquatting Consumer
Protection Act (ACPA). Generally, the ACPA is intended to protect the public from acts of
Internet “cybersquatting,” a term used to describe the bad faith, abusive registration of Internet
domain names.

In general, under the U.S. trademark law, personal names require proof of secondary meaning
in order to be registered as trademarks. The Lanham (Trademark) Act of 1946, as amended,
provides that: “No trademark by which the goods of the applicant may be distinguished from
the goods of others shall be refused registration on the principal register on account of its
nature unless it… (c) consists of or comprises a name, portrait, or signature identifying a
particular living individual except by his written consent…”.
5 U.S.C. §1052.

Section 2(c) bars the registration of such marks on the Principal Register and, pursuant to
§23(a), 15 U.S.C. §1091(a), the Supplemental Register.

The purpose in section 2(c) of requiring the consent of a living individual to the
registration of his or her name, signature or portrait is to protect rights of privacy and
publicity that living persons have in the designations that identify them. University of
Notre Dame du Lac v. J.C. Gourmet Food Imports Co., Inc., 703 F.2d 1372, 1376; 217
USPQ 505, 509 (Fed. Cir. 1983); Canovas v. Venezia, 220 USPQ 660, 661 (TTAB 1983).

The reference to “name” in section 2(c) is not restricted to the full name of an individual
but refers to any name regardless of whether it is a full name, or a surname or given name,
or even a nickname, which identifies a particular living individual. Further, although a
mark may have been devised to be fanciful or arbitrary and not to identify a particular
living individual, it nevertheless may name or otherwise identify one or more living
individuals. Whether consent to register is required depends upon whether the public
would recognize and understand the mark as identifying the person.

Thus, a mark that consists of or comprises (whether consisting solely of, or having
incorporated in the mark) a name, portrait or signature that identifies a particular living
individual may only be registered if the mark serves as an indicator of the source of goods or
services rather than as merely descriptive of the goods or services. Personal names under the
Federal trademark law can be analogized to descriptive terms, terms that generally do not
point to a single source for goods or services and can only be registered and protected as
trademarks when the term(s) acquire secondary meaning.

In California

In August 2000, the State of California passed a new law to protect the personal names of “living person[s] and deceased personalit[ies]” in the Internet environment. The new California unfair business practices law makes it “unlawful for a person, with a bad faith intent to register, traffic in, or use a domain name of another living person or deceased personality….” California Business and Professions Code, Article 1.6, section 17525 (a) [signed into law August 21, 2000]. The California law sets out nine indicators a court may use to determine bad faith under the statute, eight of which parallel the bad faith indicia now established in 15 U.S.C. §1125(d)(1)(A) pursuant to the anticybersquatting legislation.

The California law does not include 15 U.S.C. §1125(d)(1)(A)(IX) (“the extent to which the
mark incorporated in the person’s domain name registration is or is not distinctive and
famous within the meaning of subsection (c)(1) of section 43″) because the California law
pertains to individuals’ names, not trademarks. Instead, the California law includes a final
bad faith indicator, distinct from anything in the ACPA, which provides that a California
court determining “bad faith” will consider “whether the person alleged to be in violation
of this article sought or obtained consent from the rightful owner to register, traffic in, or
use the domain name.” It is not clear what is meant by “rightful owner” in this provision,
since the law concerns personal names that are not “owned” per se; we assume that the
California law is intended to instruct a court to consider whether the domain name
registration sought or obtained the consent of the individual whose name appears in the
domain name.

The California law is broader than the protection provided to individual names under ACPA in
two respects. First, under the ACPA, a domain name registrant will incur liability for using an
individual’s untrademarked name only when the domain name is “register[ed] . . . with the
specific intent to profit from such name by selling the domain name for financial gain to that
person or any third person,” whereas the California law exposes the domain name registrant to
liability based on the range of bad faith indicators that the Federal law reserves for trademark
cybersquatting. Second, the California law applies to the names of “deceased personalit[ies]”
as well as living persons.

The difference in activities that trigger liability for unauthorized use of personal names between
the ACPA and the new California law will, in time, allow us to observe the effect of these two
different mechanisms in practice. In this respect, California may serve as a legislative
“laboratory” on this issue.

Courts and commentators have frequently recognized that the States may serve as “laboratories” for the development of new social, economic, and legal ideas. See, e.g., Chandler v. Florida, 449 U.S. 560, 578 (1981); Reeves, Inc. v. Stake, 447 U.S. 429, 441 (1980); New State Ice Co. v. Liebmann, 285 U.S. 262, 311 (1932) (Brandeis, J.,
dissenting).

We lack present evidence, however, to suggest that an aggrieved personal name holder does not have redress under current law. Under the combination of section 3002(b) of the ACPA, unfair competition laws, libel laws, and other causes of action under state law, individuals who are victims of the bad faith registration of a personal name
appear able to seek effective legal remedies.

Cybersquatting Cease and Desist Letter

Cybersquatting in E-Commerce Law

Cybersquatting and the Legal Aspects of E-Commerce

Cause of Action for Cybersquatting Under the Anticybersquatting Consumer Protection Act, 15 U.S.C.A. § 1125(d): an Overview

This section examines this type of action. This subject identifies the various elements of the Cause of Action for Cybersquatting Under the Anticybersquatting Consumer Protection Act, 15 U.S.C.A. § 1125(d), offering a practical approach to the litigation issues of this cause of action. See also the entry about legal risks.

Cybersquatting

Overview of Cybersquatting in relation to cyber crime: [1] Any individual is allowed to purchase the registration rights of a particular domain name through any one of several existing ICANN registrars. Normally, this is an uneventful process, but can be complicated when companies already share all or part of the same name or slogan, or when copyright and trademark issues are involved. In the United States, cybersquatting is illegal under the Anticybersquatting Consumer Protection Act (ACPA). This federal law was passed in 1999 to assist copyright and trademark holders in disputes regarding the registration of domain names but also applies ''to people who: (1) have a bad faith intent to profit from a domain name; and (2) register, use or traffic in a domain name; (3) that is identical, confusingly similar, or dilutive of certain trademarks'' (chillingeffects.org). In cases where two trademark holders stake a claim to the same domain, the legal issues can be very complex. Courts have generally interpreted the ACPA as applying to cases where one party has clearly intended to infringe on the trademark of another entity and based rulings on whether or not a malicious intent is proven (Virtual Works, Inc. v. Volkswagen of America, Inc., U.S. Ct. of Appeals, 4th Circuit, 2001).

Resources

Notes and References

1. By Shaun M. Jamison

See Also

• Types of Cybercrime
• Cybercriminal

Further Reading

American Bar Association. (2008). U.S. Patent and Trademark Office: Basic facts about registering a trademark. Available at http://www.abanet.org/ intelprop/comm106/106trade.html#etr; Electronic Freedom Foundation et al. (2008). Chilling Effects Clearinghouse: Frequently Asked Questions (and Answers) about ACPA. Available at http://www.chillingeffects.org/domain/faq.cgi#QID682; Experience Hendrix, L.L.C. v. Denny Hammerton and The Jimi Hendrix Fan Club. (2000). Available at http://www.wipo.int/amc/en/domains/decisions/html/2000/ d2000-0364.html; PETA v. Doughney. (2000). Available at http://cyber.law .harvard.edu/stjohns/PETA_v_Doughney.html; United Nationals World Intellectual Property Organization (WIPO). (2008). Available at http://www.wipo.int/portal/ index.html.en; Virtual Works, Inc. v. Volkswagen of America, Inc. (2001). U.S. Ct. of Appeals, 4th Circuit. Available at http://www.4lawschool.com/property/virtual.shtml.

Resources

See Also

• E-Commerce Regulations
• Online Business Law
• Online Business Regulations