Domain Name Issues That Could Land You in Federal Court

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If your domain name infringes on another company’s trademark, you may be sailing into dangerous legal waters. Under the Anticybersquatting Consumer Protection Act, or ACPA, registering or using in bad faith a domain name that contains someone else’s trademark is illegal, and you could face a fine of up to $100,000. This guide will help you understand the difference between trademarks and domain names, what exactly would constitute bad faith, and how disputes between competing trademark and domain name owners are commonly handled.

What is a Trademark?

A trademark is a right that allows businesses and individuals to exclusively own and promote a name. Basic trademark law was written to protect the consumer, not the trademark owner. Lawmakers were concerned about the possibility of confusion in the marketplace that might occur if two companies in similar industries attempted to use the same or similar trademark. For example, Delta Airlines and Delta Airways would present a problem, while Delta Airlines and Delta Plumbing would not.

What is a Domain Name?

A domain name is used to direct consumers to a particular website, and is not required to be a registered trademark. Two companies that own trademarks within their respective industries each might legitimately claim the right to the same domain name, and in many but not all cases, the domain name would go to the first one registering it.
The organization that oversees domain name registration, the Internet Corporation for Assigned Names and Numbers, or ICANN, established the Uniform Domain Name Resolution Policy, or UDRP, to help resolve disputes over domain name issues.

The Federal Courts and the UDRP Both Hear Domain Name Disputes

Disputes over domain name issues may be heard either by the court system, or submitted for resolution to the UDRP. Court filings are much more costly than the UDPR, and there is no universal definition of the proper jurisdiction where the case may be heard. On the other hand, UDRP findings may be appealed to and overturned in court.
The issue of bad faith is an important consideration no matter who hears the dispute. In essence, registering a domain name with the intention of either confusing the consumer who may be searching for the website of the actual trademark owner, or attempting to profit from that domain name by offering to sell it to the trademark owner is considered bad faith.

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