Anti-Cybersquatting: Brief Overview

Do you have a company or sell a product and want to register a domain, but find that the domain is already taken?  If the person refuses to give up the domain, what can you do?  One possible recourse is provided in the Anti-Cybersquatting Consumer Protection Act (ACPA).

The ACPA is a federal law enacted in 1999.  It allows someone with a valid trademark that is distinctive or famous to sue someone who purchased a domain that is identical, confusingly similar, or dilutive of the owner’s mark, in instances where the alleged cybersquatter used or registered the domain name with a bad faith intent to profit.

The last element – the bad faith intent to profit – is “the essence of the wrong that the Act seeks to combat” and often the hardest element to prove. Southern Grouts & Mortars v. 3M Co., 575 F.3d 1235, 1246 (11th Cir. 2009).   Where a defendant simply holds onto a domain name to prevent a competitor from using it, that’s not enough to bring forth a cause of action under the ACPA. Id. 

In determining whether a person has a bad faith intent to profit, the court may consider many factors, which include:

1. The trademark or other intellectual property rights of the person, if any, in the domain name;
2. The extent to which the domain name consists of the legal name of the person or a name that is otherwise commonly used to identify that person;
3. The domain owner’s prior use, if any, of the domain name in connection with the bona fide offering of any goods or services;
4. The domain owner’s bona fide noncommercial or fair use of the mark in a site accessible under the domain name;
5. The domain owner’s intent to divert consumers from the mark owner’s online location to a site accessible under the domain name that could harm the goodwill represented by the mark, either for commercial gain or with the intent to tarnish or disparage the mark, by creating a likelihood of confusion as to the source, sponsorship, affiliation, or endorsement of the site;
6. The domain owner’s offer to transfer, sell, or otherwise assign the domain name to the mark owner or any third party for financial gain without having used, or having an intent to use, the domain name in the bona fide offering of any goods or services, or the person’s prior conduct indicating a pattern of such conduct;
7. The domain owner’s provision of material and misleading false contact information when applying for the registration of the domain name, the person’s intentional failure to maintain accurate contact information, or the person’s prior conduct indicating a pattern of such conduct;
8. The domain owner’s registration or acquisition of multiple domain names which the person knows are identical or confusingly similar to marks of others that are distinctive at the time of registration of such domain names, or dilutive of famous marks of others that are famous at the time of registration of such domain names, without regard to the goods or services of the parties; and
9. The extent to which the mark incorporated within the domain name registration is or is not distinctive and famous.

If a plaintiff is successful in suing under the Act, he, she, or it can recover actual damages or statutory damages, which can range between $1,000 and 100,000 per domain name; injunctive relief, including domain name transfer, cancellation, and a prospective injunction against registering additional domain names containing a plaintiff’s brand; and costs of the action, which may include attorneys’ fees.

However, as with many statutory causes of action, the ACPA is very detailed, and all elements must be met before a plaintiff can be successful.  The act also provides for a separate dispute resolution process outside litigation; however, litigation can run parallel to those proceedings.

If you have questions as to whether you can bring forth a cause of action against a potential cybersquatter, feel free to contact Attorney Conlin.