Protecting Domain Names - Kicking Cyber-Squatter Butt Without Going To Court

There's no question that e-commerce has taken the marketing world by storm. And domain names are definitely at the heart of the storm. E-turf wars are erupting between multi-national brands and small business operators alike. But business people pioneering the World Wide Web are finding out that the rules of the game aren't always clearly defined. And like any game where the rules aren't clear, things can get a bit messy.

In the year 2,000 almost 1,500 disputes were reported to the World Intellectual Property Organization alone. So how do you kick cybersquatter butt without going to court? Better yet, what are your rights when your competing with big-name brands and trademarks? How did Mattel successfully shut down a pornography site called "BarbiesPlaypen" because it infringed their Barbie trademark, but Canadian grocery giant Loblaw failed in their bid to stop a similar infringement on their President's Choice trademark?

What's ICANN got to do with it?

The California-based Internet Corporation for Assigned Names and Numbers (ICANN) is the non-profit corporation that was formed to assume responsibility for domain name system management, among other things. It is ICANN's policy that registrars receiving complaints about domain names infringing on trademarks or service marks can not act to transfer or cancel the domain names in question until they receive an order from a court, an arbitrator, or other neutral decision maker working to resolve the parties' dispute.

When, however, the issue is one of cybersquatting (where a domain name has been registered specifically for the purpose of trying to profit from another's trademark or service mark), the complaining party can use ICANN's special administrative procedure, rather than going to court. There are four ICANN-accredited domain name dispute resolution providers, each of whom agrees to follow the ICANN Uniform Policy on Dispute Resolution. They are CPR Institute for Dispute Resolution, eResolution, the National Arbitration Forum, and the World Intellectual Property Organization (WIPO). WIPO is a UN affiliated agency, and was the first and most high profile ICANN-approved domain name dispute resolution provider. You can check out each of these dispute resolutions providers at their sites: www.cpradr.org, www.eresolution.ca, www.arbforum.com, www.wipo.int.

What's the process?

The "anti-cyber-squatter" process is handled mostly online, and is designed to be faster and cheaper than going to court. It will cost you between $1,250 and $2,900 (U.S.) in fees for one or two complaints and it should take less than 45 days to get a decision. At the end of the day, if you're not happy with the decision reached by the dispute resolution providers, you can still go to court. But you can rest assured that going to court will cost you a lot more.

Before your complaint can be heard via this special process, you have to show that you have trademark or service mark rights to the name that is the basis of the complaint. Then, you will be required to prove three things before the domain name you're complaining about will either be transferred to you, cancelled or suspended.

Three steps so success.

First, you have to show that the respondent's domain name is the same or "confusingly similar" to the name for which you have a trademark or service mark. This was the reason why Chanel won its case against a U.S. company that registered chanelstore.com and chanelfashion.com. A panel of three WIPO arbitrators found that the domain names were "confusingly similar" to the famous Chanel trademark.

Secondly, you have to show that the holder of the domain name in question has no rights to the name, such as a trademark or it being their personal name, or that they have not made bona fide use of the name. Hence, the guy who registered more than a hundred Harry Potter domain names was forced to relinquish his domains. Having registered them only the morning after the news broke about Time-Warner's decision to make the blockbuster books into a blockbuster movie, and not being able to claim that his name was actually "Harry Potter", he was out of luck.

Last, but certainly not least, you have to prove that the other guy is using the domain name in "bad faith". More often than not, "bad faith" is evidenced by the intention to sell the domain name for profit, usually to the complainant. So registering a well-known brand or trademark is not, in and of itself, considered cybersquatting. Registering it and immediately contacting the owner of the well-known brand or trademark and offering to sell it to them for a heavily inflated price (or is that fair market value?), may be considered evidence of cybersquatting.

Pros and cons.

Although ICANN's Uniform Dispute Resolution process offers a faster, cheaper alternative to going to court, some disputants - like Mattel - may choose to go the old-fashioned legal route. Their appearance before a U.S. district court judge ended with the porno site "BarbiesPlaypen.com" being closed down and its operators being prohibited from future use of any Mattel Barbie trademark.

Loblaws, on the other hand, is still duking it out with domain name holders with names similar to there "President's Choice" trademark. They've lost several cases before the ICANN domain name dispute resolution providers because there has been no finding that the operators in question acted in bad faith by choosing or using variations of the "President's Choice" domain names.

Some domain name disputants have no alternative to going to court. Not everyone can use the ICANN-endorsed dispute resolution services. The domain name in question has to be a .com, .net, or .org top-level domain, or one of a handful of country code top-level domains. Other registrars may have their own dispute resolution system, which may or may not closely resemble ICANN's. For example, if you've got a .ca domain name complaint you'd like handled on Canadian turf under a similar dispute resolution process, you'll have to a wait a while longer.

The Canadian Internet Registration Authority (CIRA) dispute resolution mechanism will soon be available to individuals and companies who have a "Canadian presence" and a .ca domain name. For the time being they're still trying to hammer out what parts of the ICANN dispute resolution process CIRA will adopt and what it will change, so .ca battles have to be waged in court.

If you're a domain-name investor, you shouldn't despair quite yet. There are still lots of great stories out there about people making their fortunes selling their domains. Orange.com was recently sold by Maryland-based software company Orange Technologies Inc. for somewhere between an estimated $300,000 and $5 million. Likewise, last year the BBC paid $200,000 to Boston Business Consulting Inc. for the bbc.org domain name.

"Protecting Domain Names - Kicking Cyber-Squatter Butt Without Going To Court" by Chantalle MacDonald of DomainNotes.com