Adam Feinsilver's Cyberlaw Tips - January 26, 2001
Pirates Set 'Sites' on Domain Names

	Pirates are alive and well in today's society.  Of course, you won't find them looting the town or raising a raucous fiesta in the local tavern.  In our age, pirates are much more "civilized".  Pirates today don a colloquial guise.  They are businessmen, college students, and teenagers.  They travel among us, in cyberspace.

Today, pirates go after property such as music, software, and, as we focus on in this article, domain names.   Today, we label the action, not the person.  Nobody wants to call their kid in college a "pirate" because he downloads music from Napster servers or trades games with other dorm residents.  Instead, we have the terms "software piracy" and "pirated music" (modern for "bootlegs").  When someone registers a domain name that purposely uses your trademark or business name for commercial gain, the applicable term is "domain name piracy."  A similar, techno-word for domain name piracy is "cybersquatting", a term adopted from "squatters" (people who would sit on your land in an attempt to gain ownership).

The Register and Sell Routine

Until recently, there was a "great" way to make a quick buck on the Net.  Someone would take a well known corporate name, slap on ".com" and register it as domain name.  Sooner or later,  the corporation would learn of the new domain (often when the corporation tried to establish its own web site).  The corporation would then contact the domain owner and the "name-a-price" game would begin.

The "cybersquatters" soon began registering domains similar to the corporate names as well.  In 1998, Toys "R" Us filed a lawsuit against someone who had registered "toysareus.com"  The defendant in that case even faxed Toys "R" Us a letter belittling the company for failing to register the name itself.  In addition, the defendant threatened to create its own toy catalog or sell the name to a Chinese toy company.  In the end, ownership of toysareus.com and kidsareus.com (also registered by the defendant) were transferred to Toys "R" Us (along with over $55K in attorneys fees).  The Toys "R" Us case, along with a bunch of similar cases, led the way to the Anticybersquatting Consumer Protection Act.  

The Act offers legal protection and remedies to consumers and trademark owners who's trademarks and tradenames have been pirated in cyberspace.  It is a powerful alternative to the ICANN (Internet Corporation for Assigned Names and Numbers) Uniform Domain Name Dispute Resolution Policy.  Whether you own or ever plan to own a domain name, as an individual or a business, you should be aware of your remedies or repercussions under both the Act and ICANN's Policy.

Anticybersquatting Consumer Protection Act

	In almost-plain English, the Anticybersquatting Consumer Protection Act prohibits a person from registering, trafficking, or using a domain name with the "bad faith intent" to make a profit off of another's personal name or trademark.  Additionally, under the Act, nobody can register, traffic, or use a domain name that is the same or confusing to a famous or distinctive mark.  
Let's say you just opened Paulie's Pizza(tm).  Before the cheese on your first pizza melts, Jerry the Cybersquatter calls you up and says that he just registered pauliespizza.com.  Today, he's willing to let the name go for $5,000.  It occurs to you that it would help business if Paulie's had a web site.  Maybe the business could take orders on-line.  The Act protects you from Jerry's scheme.  The court can order Jerry to transfer, forfeit, or cancel the domain name.  You may also be awarded profits, damages, and costs (including attorney's fees).  In this case, Jerry probably hasn't earned any profits and you haven't yet suffered any actual damages.  There is road to  recovery under the Act.  It allows you to  recover statutory damages in lieu of actual damages and the infringing party's profits.  This can range from $1,000 to $100,000 per domain name.  
As a new business owner, this all sounds comforting, but the prospect of litigation is quite the opposite.  The egregious expense of litigation is more than prohibitive, it's scary; perhaps even as scary as the amount of time that this matter will be tied up in the courts.

The ICANN Uniform Domain Name Dispute Resolution Policy

	ICANN's Policy circumvents pricey litigation and lengthy disputes.  The cost generally ranges between $750 and $1,000, and the decision is reached within 56 days.  The Policy has been adopted by all accredited domain name registrars for .com, .net, and .org domains as well as some managers of top level domain country codes.  Perhaps the best part is that the Policy doesn't involve the head-to-head battle that ensues litigation.  Instead, the dispute is handled between the registrar and the domain name holder.
	The Policy kicks in when a "complainant" (the party alleging that its rights have been infringed) files a complaint with ICANN asserting three elements: (1) that the defending owner has an identical or confusingly similar domain name to the complainant's trademark or service marks; (2) that the defendant has no "rights or legitimate interests" in the domain name; and (3) the defendant' registration and use of the domain name is in bad faith.
	The only remedies available under the Policy are cancellation or transfer of the domain name registration.  Damages cannot be recovered from the losing party.

Solutions and Warnings

	The Anticybersquatting Consumer Protection Act and ICANN's Uniform Domain Name Dispute Resolution Policy provide trademark owners with tools to help protect their property rights in cyberspace.  Where taking advantage of ICANN's Policy may be cheaper and faster, it offers no definitive outcome, and limited remedies.  The Anticybersquatting Consumer Protection Act provides strong legal protection and provides for damages and attorneys fees, but will likely come with a much greater expense and a much slower time frame.  Your attorney should be consulted to help you decide which of the two would be more effective and practical should the need arise.  Meanwhile, you may also want consider registering any trademarks that could need the protection of the Act or ICANN's Policy.  This might help you avoid paying a premium for your domain name later.
	If you are sitting on a domain name that the Act or ICANN's Policy could target, be aware of your rights and your legal exposure. Domain names today are not entirely available on a first-come, first-serve basis like they were a few years ago.  I have seen the frustration that follows a "cease and desist" form letter from the "other guy's" attorney.  Be careful where you tread.
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Disclaimer:  Adam Feinsilver's Cyberlaw Tips are not to be considered legal advice.  The information is provided for general educational purposes only.  Do not rely on the general advice given here, as it may not fit your particular situation.  You must contact your attorney to address your specific situation.

Adam Feinsilver is a Cyberlaw and Entertainment attorney.  He is available to firms as a legal consultant on Computer and Internet legal matters.  Mr. Feinsilver can be contacted via e-mail at adam@feinsilver.com or by calling the Firm, Adam S. Feinsilver, Attorney at Law,  at (561) 790-3857.

Adam Feinsilver's Cyberlaw Tips may be duplicated and distributed in its entirety so long as no changes are made to the article, its headers or footers.  However, Publication or posting to a Web Site requires permission.

Copyright 2007 Adam S. Feinsilver