Scott Lesowitz, an attorney at Lesowitz Gebelin, explores how owners of trademarks, service marks, collective marks and certification marks the world over can use the US Anti-cybersquatting Consumer Protection Act (ACPA) to seek cancellation or transfer of infringing domain names.
The ACPA, which contains a provision that allows trademark owners to sue a domain name if the court cannot obtain personal jurisdiction over the cybersquatter directly, should be of special interest to businesses located outside the United States. The plaintiff need not be in the United States to file suit, and need only have accrued rights to use the mark in the United States (typically by using the mark in commerce in the United States). Furthermore, if the domain name is registered in the United States, the defendant need not have any connection to the United States. Notably, ‘.com’, ‘.net’, ‘.name’, ‘.cc’ and ‘.tv’ domain names are registered in the United States.
Furthermore, the ACPA allows for cancellation in a broader range of scenarios than in ICANN UDRP proceedings, and a court order or judgment under the ACPA takes precedence over a contrary finding in UDRP proceedings.
Inside the ACPA
In the classic cybersquatting scenario, someone registers a domain name that contains a well-known trademark or service mark or that is confusingly similar to a well-known mark. Then, the cybersquatter either demands payment from the trademark owner for the domain name or uses the domain name to run a low-quality website that capitalises on the traffic from people who meant to visit the trademark owner’s website.
Against this backdrop, Congress passed the ACPA in 1999, allowing a plaintiff to pursue the cancellation or transfer of domain names. Under the ACPA, the plaintiff may seek cancellation or transfer by proving that the defendant, with the intent to profit, registered, trafficked in or used a domain name that is identical or confusingly similar to the plaintiff’s distinctive or famous trademark (15 USC §1125(d)). The plaintiff may also pursue cancellation on the grounds of traditional trademark infringement based on a likelihood of consumer confusion or, in the case of famous marks, on the grounds of dilution. (If an action is brought against a cybersquatter, rather than a domain name, the plaintiff may also seek the monetary damages that would otherwise be available under trademark and unfair competition law.)
In a bad-faith case, as the plaintiff need only prove an ‘intent’ to profit from its trademark, it may initiate a lawsuit even if the defendant has yet to either use the domain name or offer it for sale to the plaintiff (E&J Gallo Winery v Spider Webs, 286 F3d 270, 275-276 (5th Cir 2002)).
The plaintiff in an ACPA case must have enforceable rights to the mark in the United States. Such rights accrue through use of the trademark in commerce in the United States or by filing an intent-to-use trademark application. However, the plaintiff need not be located or incorporated in the United States to file suit.
Oftentimes multiple businesses will have concurrent rights to use the same mark. These rights may be limited to use of the mark in certain locations or for certain types of business. The ACPA is not meant to apply in cases where the defendant has concurrent rights to use the plaintiff’s trademark unless the defendant has attempted to profit from a market outside the scope of its concurrent rights (Hartog & Co v SWIX.com, 136 F Supp 2d 531 (ED Va 2001)).
Availability of in rem jurisdiction against a domain name
In passing the ACPA, Congress recognised that it is often difficult to sue a cybersquatter directly. Many cybersquatters are located outside the United States. Additionally, many disguise their identity by using aliases or false contact information. Therefore, for domain names registered in the United States, the ACPA allows for in rem proceedings against the domain name when the plaintiff cannot sue the cybersquatter directly (whether because the squatter cannot be located through reasonable efforts or because the court does not have personal jurisdiction over the cybersquatter directly through the traditional minimum contacts test).
An in rem action must generally be brought in the judicial district in which the domain name registrar or registry is located (15 USC §1125(d)(2)(C)). Verisign, located in Reston, Virginia, is the registry for the ‘.com’, ‘.net’, ‘.name’, ‘.cc’, and ‘.tv’ TLDs. Therefore, in rem actions under the ACPA are typically brought in the US District Court for the Eastern District of Virginia, which is in the Fourth Circuit Court of Appeals.
The Fourth Circuit takes a broad view of the scope of the ACPA and the in rem jurisdiction provisions. The seminal court case is Harrods v Sixty Internet Domain Names (302 F3d 214 (4th Cir 2002)). In that case, Harrods, the well-known UK company, sued an Argentinian company that was once affiliated with Harrods and had certain rights to use the Harrods name in South America. The Argentinian company had registered 60 domain names that included variations of ‘Harrods’ with Verisign’s predecessor. The court held that the exercise of in rem jurisdiction was proper. Harrods sold merchandise in the United States. The Argentinian company’s contacts with the United States were insufficient to allow for the exercise of personal jurisdiction over it, but the fact that the domain names were registered in the United States was sufficient for the exercise of in rem jurisdiction under the Fifth Amendment (Id at 224-25).
In the Harrods case, for most the domain names, the court found that there was sufficient evidence of a bad-faith intent on the part of the Argentinian company to use the domain names to target customers outside South America (Id at 232-41). However, for the remaining domain names where bad faith was unclear, Harrods could still pursue cancellation of the registrations on the grounds that the domain names were likely to cause consumer confusion or on the grounds of dilution. Bad-faith intent is not required for a finding of liability based on such grounds (Id at 230-32).
It is worth noting that, while the plaintiff may not seek monetary damages in an in rem ACPA action, it may seek attorneys’ fees on the grounds that the defendant’s conduct was “willful, deliberate, and in bad faith” (Agri-Supply Company v Agrisupply.com, 457 F Supp 2d 660 (ED Va 2006)).
Of course, ICANN has its own system for cancellation or transfer of a domain name under its UDRP that generally will be cheaper and quicker than court proceedings under the ACPA. However, ACPA actions can have several advantages. The Fourth Circuit under Harrods allows for cancellation and transfer in the case of infringement or dilution even if the plaintiff cannot prove bad faith on the part of the defendant. By contrast, bad faith must be found in UDRP proceedings. Furthermore, court orders and judgments take precedence over rulings in UDRP proceedings. The Fourth Circuit has gone as far as holding that it will not even give deference to the ruling in a UDRP proceeding (Barcelona.com v Excelentisimo Ayuntamiento De Barcelona, 330 F3d 617 (4th Cir 2003)).