Available vs. Allowed: The Pitfalls in Grabbing Domain Names That Incorporate Well-Known Brands

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“Available” is not the same as “lawful to own” when registering a domain name. Domain registrars – such as GoDaddy, Bluehost and Domain.com – are just marketplaces for available domain names. A registrar’s willingness to allow someone to purchase a domain name does not necessarily come with any assurances that the purchaser has the right to use that domain name. In fact, reputable registrars – and all of those that are accredited by the Internet Corporation for Assigned Names and Numbers (ICANN) – generally require the purchaser to represent that its purchase of the domain name does not infringe on others’ intellectual property rights.

If a trademark owner believes a domain owner has acquired a domain name that incorporates its trademark – or something confusingly similar to its trademark – without permission, it may be able to grab the domain name from the original purchaser by instituting a “UDRP” proceeding. Under the Uniform Domain Name Dispute Resolution Policy (UDRP), a trademark owner can initiate an arbitration-like proceeding against a domain owner which will determine whether the domain owner can keep its domain or if it will be transferred to the trademark owner. Typical providers of UDRP arbitration services are the World Intellectual Property Organization (WIPO) and the National Arbitration Forum (NAF).

In deciding who gets to own the domain name, the UDRP arbitration provider will look to see whether the trademark owner can establish three elements:

  1. Is the domain name identical or confusingly similar to the trademark owner’s trademark? Simply adding descriptive words or a generic term like “services” or a city name will typically not be enough for the provider to find the domain name dissimilar to the trademark.
  2. Does the domain owner lack any right or legitimate interest in the domain name? It is usually sufficient to find the domain owner lacks any right or legitimate interest if the registrant has not been authorized to use the trademark by the trademark owner and if the website is used to offer any goods other than authentic goods sold under the trademark owner’s trademark. There may, however, be limited circumstances where the domain owner has a right or legitimate interest in the domain name even without the trademark owner’s authorization. For example, if the domain registrant is acting as a reseller of the trademark owner’s authentic goods, the website is used to sell only those trademarked goods, and the site includes a prominent and accurate disclosure regarding the domain owner’s relationship with the trademark owner, then the domain owner may be found to have a legitimate interest in the domain name.
  3. Has the domain owner used and registered the domain name in bad faith? Evidence of bad faith includes attempts by the domain owner to try to sell the domain name for profit, a pattern of registering domain names incorporating the trademarks of others, registering a domain name primarily to disrupt the business of a competitor, or being aware of the trademark owner’s reputation and using the fame of the trademark to try to drive traffic to your website for commercial gain.

While there are some limited circumstances where a domain owner may incorporate a trademark into a domain name without the trademark owner’s permission, trademark owners have largely succeeded in getting favorable UDRP decisions resulting in the domain names being transferred to them with no compensation to the original domain purchaser.

Best Practices

When selecting domain names, the safest bet is to choose ones that do not incorporate any trademarks or confusingly similar terms – such as typos of trademarks – owned by others unless you have clear permission to do so. Instead, try to register domain names made up entirely of your unique business name, descriptive or generic terms, or some combination of the two.

If, on the other hand, you become aware that a third party has registered and is using a domain name that incorporates your trademark, work with your intellectual property attorney to consider whether initiating a UDRP proceeding may be appropriate.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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