Cybersquatting – What It Is and How To Stop It

What is Cybersquatting?

As defined by the Anticybersquatting Consumer Protection Act, cybersquatting is the “the registration as domain names of well-known trademarks by non-trademark holders who then try to sell the names back to the trademark owners.”

For instance, in 2007 a man named J. Taikwok Yung developed four websites each with the following domain names: trumpmumbai.com, trumpindia.com, trumpbeijing.com, and trumpbudhabi.com.1 The websites were registered by Yung right after the Trump Organization announced it was going to build Trump-branded hotels and condominiums in Mumbai and Bangalore, India. Thus, the websites were registered to profit off of Donald Trump’s federally-registered trademark for TRUMP, which is associated with high-profile business ventures. When Trump demanded that Yung turn over the websites, Yung filed suit against Trump seeking to keep the domain names citing fair use and First Amendment rights. Trump, however, filed a countersuit against Yung seeking damages for “federal cybersquatting.”

Recently, the federal judge ruled that Yung must pay Trump $32,000 in damages and turn over the websites to Trump because Yung was illegally cybersquatting.2

How to Get Rid of A Cybersquatter

A victim of cybersquatting has two options:

  1. File a lawsuit under the provisions of the Anticybersquatting Consumer Protection Act (ACPA); or

  1. Use the Uniform Domain Name Dispute Resolution Procedure (UDRP) through the Internet Corporation of Assigned Names and Numbers (ICANN).

Using the UDRP

The UDRP policy provides a mandatory, low-cost administrative procedure primarily to resolve claims of abusive, bad faith domain name registration.3 The UDRP policy was adopted in 2000 and applies to all global top level accredited registrars (i.e., .biz, .com, .info, .name, .net, and .org top level domains). According to the rules of ICANN, all those who reserve a domain name in one of the foregoing top level domains must agree to abide by this dispute resolution policy.4

According to the ICANN website, complaints alleged to arise from abusive registrations of domain names (for example, cybersquatting) may be addressed by expedited administrative proceedings that the holder of trademark rights initiates by filing a complaint with an approved dispute-resolution service provider.5 To invoke the policy, ICANN instructs that the trademark owner may either: (a) file a complaint in a court of proper jurisdiction against the domain-name holder (or where appropriate an in-rem action concerning the domain name) or (b) in cases of abusive registration submit a complaint to an approved dispute-resolution service provider.6 Examples of approved dispute-resolution service providers include the World Intellectual Property Organization (WIPO) and the Asian Domain Name Dispute Resolution Centre. More providers can be found on the ICANN website, http://www.icann.org/en/help/dndr/udrp/providers.

Disputes are decided by independent panelists drawn from the WIPO Center’s global list of trademark specialists. The domain name registration in question is frozen suspended during the proceedings. After reviewing a case, panelists submit their decision within a period of 14 days. If a panelist’s decision to transfer a domain name is not challenged in a competent court within a period of ten business days, the registrar is legally bound to implement the panelist’s decision. The entire case normally takes no more than about two months.7

In 2012, trademark holders filed a record 2,884 cybersquatting cases covering 5,084 Internet domain names with WIPO under procedures based on the UDRP.8 Parties settled around one out of five WIPO cases before reaching panel decision and WIPO panels in 2012 found evidence of cybersquatting in 91% of all decided cases.9

In sum, why would you want to use UDRP? Because the proceedings are:

  1. Inexpensive: no evidentiary requirements, discovery, testimony, hearings or motion practice of the type common in federal court proceedings, thereby significantly decreasing costs compared to federal lawsuits.

  2. Faster.

  3. Readily accessible: no jurisdictional issues since domain registrants agree contractually to be bound by the UDRP, and service of process issues are generally non-existent as proceedings are conducted via email.

What are the disadvantages of using the UDRP?

  1. No appeal process to correct erroneous decisions.

  2. No monetary damages, only limited to cancellation or transfer of a domain name.

  3. No precedent.10

  4. No guarantee that the decision by the panel is the final adjudication of the issue since parties can file a federal lawsuit as well.

  5. No evidentiary guidelines.

Notwithstanding the above, where the dispute is more complex or is likely to involve evidentiary issues that cannot be adequately explored in an expedited UDRP proceeding, an ACPA action may be the better choice and is explained in more detail herein.

The ACPA

Enacted in 1999, the Anticybersquatting Consumer Protection Act, or “ACPA” has been inserted into Section 43(d) of Lanham Act, the U.S. federal trademark statute. Specifically, Section 43(d) of the Lanham states as follows:

(d) Cyberpiracy prevention

(1)(A) A person shall be liable in a civil action by the owner of a mark, including a personal name which is protected as a mark under this section, if, without regard to the goods or services of the parties, that person—

(i) has a bad faith intent to profit from that mark, including a personal name which is protected as a mark under this section; and

(ii) registers, traffics in, or uses a domain name that–

(I) in the case of a mark that is distinctive at the time of registration of the domain name, is identical or confusingly similar to that mark;

(II) in the case of a famous mark that is famous at the time of registration of the domain name, is identical or confusingly similar to or dilutive of that mark; or

(III) is a trademark, word, or name protected by reason of section 706 of Title 18 or section 220506 of Title 36.

15 U.S.C. § 1125

The ACPA provides a list of nine factors to aid in determining whether bad faith is involved.11 The ACPA also includes a “safe harbor” for would-be defendants, providing that where the domain registrant “[b]elieved and had reasonable grounds to believe that the use of the domain name was a fair use or otherwise lawful,” the claim will fail.12

Successful plaintiffs under the ACPA can select from a range of remedies available under the Lanham Act, including, but not limited to, a preliminary injunction as well as statutory damages of between $1,000 and $100,000 per domain registration.13

Why file a lawsuit under ACPA?

  1. By filing a lawsuit under ACPA, prevent a potentially adverse decision in a UDRP proceeding from being rendered or implemented.

  2. It can also serve to reverse a final UDRP ruling and either prevent or require the transfer of the disputed domain.

  3. The ACPA expressly provides protection for personal names, whereas the UDRP policy does not, absent a showing that the individual has developed service mark rights in their name.

  4. The ACPA also provides, for the first time, for in rem actions, or actions against the domain itself, where the cybersquatter is beyond the personal jurisdiction of the court or cannot be located despite the trademark owner’s diligent efforts to do so.14

  5. Federal courts are better suited to address and evaluate complex issues, especially where there are competing rights at issue.

What are the disadvantages of filing a lawsuit under ACPA?

  1. The U.S. court system is expensive and time consuming, burning a lot of money and resources for the filing and prosecution of a federal lawsuit.

  2. No guaranteed a well-reasoned or consistent final judgment, even if the federal courts have greater resources.

  3. The decision can be appealed, resulting in more expense.

  4. Monetary damages and injunctive relief is not guaranteed and they are typically only granted in especially egregious cases.

© 2014 Buche & Associates, P.C. All rights reserved. www.southerncaliforniapatents.com

1 http://www.cnn.com/2014/03/01/studentnews/trump-cybersquatting-lawsuit/, accessed 3/24/2014.

2Id.

3 http://www.icann.org/en/resources/compliance/complaints/dndr/filing-udrp, accessed 3/24/2014.

4See Paragraph 4 of the policy at http://www.icann.org/en/help/dndr/udrp/policy, accessed 3/24/2014.

5 http://www.icann.org/en/help/dndr/udrp

6Id.

7 http://onlinedomain.com/2013/04/15/news/wipo-2012-review-2884-udrps-filed-up-4-5-for-5084-domain-names-74-8-of-which-were-com/, accessed 3/24/2014

8Id.

9Id.

10 For example, compare Julia Fiona Roberts v. Russell Boyd, Case No.D2000-1210 (WIPO May 29, 2000) (awarding Ms. Roberts the <juliaroberts.com> domain based on her common law service mark rights in her name) with Reverend Dr. Jerry Falwell v. Gary Cohn, Case No. D2002-0184) (WIPO June 3, 2002) (holding that claimant’s rights in his personal name were not protectable under the UDRP).

1115 U.S.C §1125 (d)(1)(B)

12 15 U.S.C. §1125(d)(B)(ii)

13 15 U.S.C. § 1117

14 15 U.S.C. § 1125 (d)(2)