Are you using a domain name with someone else's trademark in it?

Cybersquatting is the act of registering, trafficking in, or using a domain name of a trademark or business name with the bad faith intent to profit from that activity. Some cybersquatters use close variants of a trademark, which is commonly called "typosquatting." In the late 1990s and early 2000s, cybersquatting was more common than today, because the Internet and company websites were still relatively new. But today, you do still occasionally hear about incidents of cybersquatting. With the expansion of generic top-level domains (gTLDs), the FTC and trademark owners are concerned about a re-emergence of cybersquatting and fraudulent schemes.

I occasionally hear of someone registering a domain name with someone else's trademark in the hope of making money down the road. This is the essence of bad faith intent to profit, which is prohibited by the Anticybersquatting Consumer Protection Act. If you are using a domain name or close variant to complain about a company, consisently with the First Amendment, you may be able to get away with it. But if you are using a domain name with someone else's trademark in order to make money, you likely will not get very far.

Why is ICANN creating new generic top-level domains?

Later this month, the Internet Corporation for Assigned Names and Numbers (ICANN) is beginning a Trademark Clearinghouse to prepare for the implementation of new generic top-level domains (gTLDs) later this year. ICANN is the organization that manages domain names. The Trademark Clearinghouse will allow owners of registered trademarks to purchase the new gTLDs before the general public.

If the mark owners do not purchase the domain name with the new gTLDs and someone else does, the only recourse is to sue under the Anticybersquatting Consumer Protection Act, or to give the domain registrant whatever they want. The Clearinghouse will notify the mark owner if someone else registers a domain with their trademark, but it will not prevent anyone from registering the domain. Paying a domain registrant after they registered a domain would likely cost more than buying the domain in the first place. So, it essentially forces companies with famous and distinctive trademarks to purchase domains they do no want or need, just to prevent cybersquatters.

The new gTLDs do not add anything. Is it easier to visit "google.business" instead of "google.com"? By now, ".com," and ".org" are well-understood. Available domains are not the issue either. If you have a famous mark, for instance Pepsi, you will need to buy domains in all of the new gTLDs when they become available to prevent cybersquatting. Effectively, this does not add any new domains, because Pepsi will ostensibly purchase all of the available gTLDs. It just creates consumer confusion by having a higher number of similar domains when there is not a registered trademark using the domain.

The FTC is concerned about the extra domains too, because it makes it easier to perpetrate fraud. For instance, if Wells Fargo does not pay ICANN for the new gTLDs, then someone else can register domains under Wells Fargo's mark and better deceive consumers with whatever scheme they have hatched.

When there is no plausible non-monetary justification for an action and the actor financially benefits from the action, the reasonable conclusion is that the action is a cash grab. That is the situation with ICANN's implementation of new gTLDs. There are no benefits and the new gTLDs are almost certain to cause problems.

Cybersquatting on the Sooners.

The University of Oklahoma is suing a man in district court for cybersquatting. The story is replete with almost unparalleled levels of irony, because the school's nickname -- Sooners -- refers to settlers who squatted on land in what is now Oklahoma before Grover Cleveland proclaimed the territory open to settlement in 1889.

The University is undoubtedly suing under the Anticybersquatting Consumer Protection Act (ACPA), found in Title 15 of the U.S. Code. "Cybersquatting" occurs when one registers, traffics in, or uses a domain name that is identical or confusingly similar to a famous or distinctive trademark at the time of the domain name's registration, and the individual has a bad faith intent to profit. 15 U.S.C. § 1125(d)(1)(A). "Bad faith intent to profit" (BFIP) is a legal term of art. In determining whether a putative cybersquatter has BFIP, a court considers a variety of statutory factors. Here, the relevant statutory factors will be:

- the defendant's prior use, if any, of the domain name in connection with the bona fide offering of any goods or services;
- the defendant's bona fide noncommercial or fair use of the mark;
- the defendant's intent to divert consumers from the University's online location to the defendant's site that could harm the goodwill represented by the mark;
- the defendant's offer to sell the domain name or otherwise obtain financial gain;
- the defendant's provision of false or misleading information in registering the domain name; and
- the defendant's acquisition of any other domain names including famous or distinctive marks.

There are a lot of facts that remain in this case, and the above list will likely dictate the case's outcome. Most of the landmark cybersquatting cases occurred in the 1990s and early 2000s, when people still thought they could get away with taking domain names and selling them to other companies. Unless the site is a parody and it is clear from the outset, in which case there will be no BFIP, these cases do not end well for the defendant.

The University of Oklahoma does own the rights to the mark "Sooner," for clothing, sports apparel, t-shirts, hats, sweatshirts and the like. It also owns a number of other registrations where "Sooner" is juxtaposed with another word. I suspect that this individual registered the second-level domain name "SoonerNetwork" in order to profit off of the school's third-tier media rights, which are reserved to Big 12 member schools. However, if the individual is actually using the site for a bona fide purpose and has no BFIP, he may be able to keep it. I doubt this is the case, because the purported legitimate purpose, a site directing people to elderly care providers in the area, has no connection to the term "Sooner Network." Also, he apparently included information on the site at an earlier date that betrayed his fanaticism for the Texas Longhorns.

I suspect that, in addition to his motive for registering the site, he talked to someone with a rudimentary knowledge of the law, or an attorney, who advised him on the BFIP considerations. I doubt an attorney would have advised him that he should change the website's content, but an attorney might have let him know how a court would look at it (which led the individual to change the content on his own).