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Understanding the legal options used to fight cybersquatting

Gerald M. Levine, Esq. | Jan. 15, 2015
Cybersquatting is defined as a violation of a business's right to exclusive use of its mark on the Internet.

WIPO's concern appears to have been prescient. A recent blog by a security officer at a Washington, D.C. law firm announced apocalyptically that, "The parade of horrors that we had envisioned are now starting to come to fruition.... Instead of allowing ICANN to continue to allow these registrations through, it is time for us to be reflective, especially given the security concerns we are having currently."

Judging by the number of reported cases there has been a significant increase in "cybersquatting" involving the new TLDs.

In anticipation of the launching of the new TLDs, ICANN created the Trademark Clearinghouse (TMCH) which provides protective and defensive services to trademark owners for the so-called Sunrise periods and beyond, and implemented a new procedure, the Uniform Rapid Suspension System (URS), to combat cybersquatting using the new TLDs.

Legal Mechanism for Combatting Cybersquatting

The Lanham Act is the primary law on trademark infringement in both the physical and the cyber marketplaces. Although the UDRP is the overwhelming choice of regime for cybersquatting--in the 15 years of operation, Panels have handed down more than 45,000 decisions covering a multiple of domain names, the great majority of which favored trademark owners -- there may be reasons for preferring a civil action, reasons that lie in the differences between the two regimes.

While the ACPA and UDRP (and now the URS) have similar missions, they are differently constructed. The ACPA is an "either/or" model, which means that liability rests on proof that an alleged infringer either registered or is using the domain name in bad faith. The UDRP is an "and" model, which means that liability rests on proof that the alleged infringer registered and is using the domain name in bad faith.

There is one other distinguishing feature that is particularly important and rarely highlighted, which is that the ACPA is a symmetrical and the UDRP an asymmetrical regime. With the ACPA, the prevailing party is entitled to injunctive relief, damages and attorney's fees. For trademark owners this could be a primary incentive for a civil action, although it is also a double edged sword because, if the trademark owner overreaches its statutory rights, it will pay a heavy price in the form of attorneys fees and damages.  

With the UDRP each party bears its own costs and legal fees which are modest relative to a federal action. The asymmetry lies in the fact that only the complainant/trademark owner has an affirmative remedy, which is either cancellation or transfer of the domain name to its own name.

For the domain name holder, the best it can get is a clean bill finding it either has a right or legitimate interest in the domain name, in which case it wins outright; or, if it lacks a right or legitimate interest the trademark owner fails to prove abusive registration. If the trademark owner has overreached by attempting a reverse domain name hijacking the Panel is authorized to issue a declaration to that effect, but the sanction is without economic penalty.


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