This Maryland Lawyer knows that everyone has seen the infamous GoDaddy commercials during the NFL Superbowl with half-naked women gallivanting around hawking website domain names. Using companies like GoDaddy, most business owners purchase and trust such websites when they purchase a domain name for their company. However, what is not often discussed, is what happens when two parties want the same domain name?

Even GoDaddy can't save you now!

When a dispute over a domain name occurs, the parties can always turn to the courts. While courts and judges have the authority to award control and ownership over domain names (just as they have authority to award control and ownership over any other property), the judicial process is notoriously slow. Consequently, many parties have avoided the courts and turned to the domain name dispute policies of the domain name registrars.

Some well publicized examples of these types of domain names disputes are:

  • Both Hasbro and an adult entertainment provider desired the domain name. Hasbro was too late to register the name itself, but it is never too late to sue (well, almost never). The domain name is now safely in the hands of Hasbro.
  • This domain name was taken by an author from Wired magazine who was writing a story on the value of domain names. In his article, the author requested that people contact him at ronald@mcdonalds.comwith suggestions of what to do with the domain name. In exchange for returning the domain name to McDonalds, the author convinced the company to make a charitable contribution.
  • The company Zero Micro Software obtained a registration for (with a zero in place of the second ‘o’), but the registration was suspended after Microsoft filed a protest. When the domain name went abandoned for non-payment of fees, the domain name was picked up by someone else: Vision Enterprises of Roanoke, TX
  • The MTV domain name was originally taken by MTV video jockey Adam Curry. Although MTV originally showed little interest in the domain name or the Internet, when Adam Curry left MTV the company wanted to control the domain name. After a federal court action was brought, the dispute settled out of court.
  • An organization entitled “People Eating Tasty Animals” obtained the domain name, much to the disgust of the better know People for the Ethical Treatment of Animals. This domain name was suspended, but as of May 2000 the domain name was still registered in the name of People Eating Tasty Animals.
  • When NSI threatened to suspend the domain name after a protest by Warner Brothers, the New Mexico Internet access provider who was using the domain name filed suit to prevent the suspension. Although the access provider was able to prevent the suspension, a joint venture company involving Time Warner, MediaOne, Microsoft, Compaq, and Advance/Newhouse eventually obtained the domain name.

Cyber-Squatting law

Companies that do bring a court action must present legal arguments on why a domain name registered to someone else should be cancelled or transferred to an organization who wasn’t fast enough to register the name first. In 1999, Congress passed the Anti-cybersquatting Consumer Protection Act. This law made it easier for individuals and companies to take over domain names that are confusingly similar to their names or valid trademarks. In order for the transfer to occur, however, they must establish that the domain name holder acted in bad faith.

One portion of this Act related to famous persons. This portion allows individuals to file a civil action against anyone who registers their name as a second level domain name for the purpose of selling the domain name for a profit.

The law protects companies against persons who, in bad faith, register a domain name that is the same or confusingly similar to an existing trademark. The statute the lists the following factors as elements that a court can consider to determine whether the domain name was registered in bad faith.

  • Does the domain name holder have trademark rights in the domain name?
  • Is the domain name the legal name of the domain name holder, or some other name that is otherwise commonly used to identify that person?
  • Has the domain name holder made use (prior to the dispute) of the domain name in connection with a bona fide sale of goods or services?
  • Is the domain name holder using the mark in a bona fide noncommercial or fair use way at a web site accessible at the domain name?
  • Is the domain name holder attempting to divert consumers from the trademark owner’s web site in a confusing way, either for commercial gain or in an attempt to tarnish or disparage the trademark mark?
  • Has the domain name holder offered to sell the domain name to the trademark owner (or anyone else) for financial gain without having any intent to use the mark with the sale of goods or services?
  • Has the domain name holder behaved in a pattern of registering and selling domain names without intending to use them in connection with the sale of goods or services?
  • Did the domain name holder provide false information when applying for the registration of the domain name (or do so in connection with other domain names)?
  • Has the domain name holder registered domain names of other parties trademarks?; and
  • How distinctive and famous is the trademark owner’s trademark?

ICANN and the Administrative Solution

Another policy that governs such issues is the Uniform Domain Name Dispute Resolution Policy created by ICANN and used by all accredited registrars. Under this new policy, a trademark owner can initiate a relatively inexpensive administrative procedure to challenge the existing domain name. In order to prevail, the trademark owner must show:

  1. that the trademark owner owns a trademark (either registered or unregistered) that is the same or confusingly similar to the registered second level domain name;
  2. that the party that registered the domain name has no legitimate right or interest in the domain name; and
  3. that the domain name was registered and used in bad faith.

If the trademark owner successfully proves all three points in the administrative proceeding, then the domain name can either be cancelled or transferred to the prevailing trademark owner. If the trademark owner fails to prove one of these points, the administrative panel will not cancel nor transfer the domain name.

Among the ways that a domain name owner can prove a legitimate right or interest in a domain name is by showing:

  • use or preparations to use the domain name in connection with a bona fide offering of goods or services prior to any notice of the dispute;
  • that the domain name owner has been commonly known by the second level domain name; or
  • that the domain name owner is making legitimate noncommercial or fair use of the domain name, without intent of (i) commercial gain, (ii) misleadingly diverting consumers, or (iii) tarnishing the trademark at issue

A trademark owner can show that a domain name was registered and used in bad faith in a variety of ways, including by showing that the domain name owner:

  • registered the name primarily for the purpose of selling or transferring the domain name to the trademark owner or a competitor of the trademark owner for a price greater than out of pocket costs;
  • engaged in a pattern of registering trademarks of others to prevent the use of the domain name by the trademark owner;
  • registered the domain name primarily to disrupt the business of a competitor; or
  • is attempting to attract users to a web site for commercial gain by creating a likelihood of confusion with the trademark owner’s trademark.

The Early Bird Catches the Website

ENLawyers suggests that as soon as you know the same of your business, buy the domain. While there are laws and policies to protect your interest, the best move is to be first in line. Once you own your business name, it will likely remain yours into perpetuity. However, if you are buying websites in an attempt to extort money from the potential corporate owners, look forward to retaining counsel and forthcoming litigation.