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CYBER SQUATTING and 'BLUEBIRD' TRADEMARKS
HOMEPAGE PARRY THOMAS HENRY SEAGRAVE JOHN COBB M CAMPBELL D CAMPBELL C BREEDLOVE K WARBY R NOBLE D VESCO INDEX
US Anticybersquatting Act Strengthens Trademark Rights - June 2000.
In a somewhat belated attempt to slow the land grab for domain names, Congress last year enacted the Anticybersquatting Consumer Protection Act.1 This Act is intended to strengthen the rights of trademark owners as they expand their businesses onto the Internet. While it does not grant a trademark owner an absolute right to a related domain name (i.e., "trademark.com"), it definitely weights the balance in their favor.
A number of cases decided before the Anticybersquatting Act emphasized the uncertainty faced by trademark owners as they attempted to recover related domain names from so-called cybersquatters. In one early case, the well-known computer distributor, Gateway 2000, brought an action against a lesser-known computer consultant, Mr. Alan B. Clegg.2 Although Gateway 2000 owned a federal registration for their trademark, Mr. Clegg had obtained a domain-name registration for "gateway.com." Mr. Clegg used that domain name in conjunction with his computer consulting services. On the facts before the court, Gateway 2000 was unable to win a preliminary injunction for either trademark infringement or dilution. While Gateway 2000 ultimately obtained the domain name, they did so by way of an outside settlement and not by virtue of their trademark rights.
Under existing precedent, that result did not surprise legal commentators. The use of a domain name as an Internet address did not necessarily constitute a trademark use and so did not fall neatly within traditional doctrines of trademark infringement or dilution. As Professor J. Thomas McCarthy remarked, courts needed to "stretch[] the law to reach the reprehensible actions of a cybersquatter."3
Moreover, under traditional doctrines of trademark law, two companies may use an identical trademark without infringing each other’s rights provided their relevant markets do not overlap in a way that consumers will be confused as to the source of their respective goods or services. Thus, the trademark "Bluebird" has been registered by sixteen different companies who use that trademark on goods and services ranging from buttons4 to business consulting services.5 The different channels used to market their respective products help maintain a clear distinction as to their respective trademark rights.
The Internet, however, is quickly erasing the demarcations between such markets as companies of all stripes and colors establish an Internet presence. Although sixteen different companies may use the "Bluebird" trademark on their respective goods and services, only one may operate "bluebird.com." Here, the business consulting company appears to have won the race to register that domain name.
While disputes for domain names as between two trademark owners may continue to evade easy resolution, the Anticybersquatting Act will quickly settle similar disputes between a trademark owner and a so-called cybersquatter. It imposes civil liability of up to $100,000 in statutory damages against anyone who, with bad-faith intent, "registers, traffics in or uses a domain name that ... is identical or confusingly similar to" a registered trademark. In making this determination, the Anticybersquatting Act lists nine factors that a court may consider. These include the domain-name registrant’s bad-faith diversion of consumers from the trademark owner and the domain-name registrant’s bad-faith offer to sell the domain name to the trademark owner.
In one of the first cases that applied the Anticybersquatting Act, Volkswagen brought a cause of action against Virtual Works for "cyberpiracy."6 Volkswagen owned a federal trademark registration for "VW" and used the domain name "vw.com" for their homepage. Although Virtual Works did not have any trademark rights to "VW," they used the domain name "vw.net" to offer computer-related services. During litigation, Virtual Works admitted that they had received emails directed to Volkswagen and that they had offered to sell the domain name to Volkswagen. After applying factors set forth in the Anticybersquatting Act, the court granted Volkswagen’s motion for summary judgment and visitors to "vw.net" now find Volkswagen’s homepage.
The body that oversees the domain-name system, ICANN, is currently considering the addition of a number of new domain-name extensions such as dot-biz, dot-store, dot-firm, dot-union and a number of others.7 When these are added, we will likely witness another land grab in cyberspace. The message the Anticybersquatting Act and the Volkswagen case send is clear: a federal trademark registration now provides one of the best protections against cybersquatters.
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The Bluebird-Electric story 1991-2005 Copyright © 2005 Bluebird Electric Racing Limited and Electrick Publications.
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