Trademark rights and domain name ownership overlap in many ways, but they are not the same. Domain name ownership does not necessarily establish trademark rights, and trademark ownership does not necessarily give you the right to own the corresponding domain name.
I am often approached by clients who have received a cease and desist letter related to their website or domain name who were surprised to learn that someone can still accuse them of trademark infringement despite the fact that they own the domain name containing the trademark at issue. Similarly, I have also been approached by clients who have recently received a trademark registration who believe that the trademark registration allows them to seek turnover of the corresponding domain name. There is quite a bit of misunderstanding regarding the interplay between trademark rights and domain name ownership.
What is a trademark?
In order to fully understand how trademark rights and domain name ownership affect one another and differ, it helps to start with a basic understanding of both. In general terms, a trademark (also sometimes referred to as a “service mark”) is any name, logo/design, or slogan used to promote a business. A business does not need to register the trademark to have rights (but registration does offer more robust rights). Rather, trademark rights arise whenever a mark is “used in commerce” -whenever the name, logo, or slogan is used in connection with the products or services offered by the company in such a way as to create an association in the minds of consumers connecting the mark with the company. Every time a can of Coca-Cola® is placed on a grocer’s shelves, or every time a box of french fries displaying the McDonald’s® “golden arches” logo is handed to a hungry child, those famous trademarks are being “used in commerce.” Accordingly, a trademark is something that makes a connection in the minds of consumers between a particular product or service and the company that provides that product or service.
Once trademark rights are established, they are not absolute. For example, McDonald’s® would have difficulty using its trademark rights to prevent another company from using the same name for an information technology (IT) consulting business (although for very famous marks, the trademark dilution doctrine might be used to prevent such uses). This is because trademark rights are limited not only by the mark but also by the type of products or services that the mark is used in connection with. This is why there can be a prominent national airline and also an unrelated company selling plumbing fixtures that both do business under the name Delta.®
What is a domain name?
A domain name, by contrast, is a string of characters that serves as an identification string for internet addressing purposes. When a domain name is typed into a web browser, there are rules and procedures of the Domain Name System (DNS) that tell the browser the location of the server where the corresponding website files are hosted. Accordingly, a domain name is something that makes a connection for internet users between a specific string of characters and the location of the owner’s website content files.
When does a domain name affect trademark rights?
The short answer is “never”—a domain name, by itself, cannot confer any trademark rights on the domain name owner. This is because a domain name, by itself, does not create a consumer association between a company and its products. However, a business’s website that advertises or sells the company’s products or services can create this type of consumer association. In this sense, however, the content of the website itself creates trademark rights, not necessarily the domain name.
When does a trademark affect domain name rights?
In general, domain names are a “first come, first served” commodity. The first person to purchase a given domain name retains the rights to the name until it is sold or the registration term expires. This is generally the case even when the domain name is a trademark. If I happened to register starbucks.com before the coffee company, the coffee company may have to post its website at a different domain name address until my registration expires.
However, there are certain exceptions to this rule. “Cybersquatting” is when a person registers a domain name containing a trademark without a legitimate purpose and merely to prevent the trademark owner from having it (or re-sell it to the trademark owner at a steep profit).
In cases of cybersquatting, a trademark owner can seek the return of a domain name that contains a trademark. There are a couple of different procedures to accomplish this. Still, in general, a trademark owner must show that the domain name was registered in bad faith and with the intent to profit from the trademark at issue and that the domain name is confusingly similar to the trademark at issue.
In determining bad faith, a court or other tribunal will consider the strength of the trademark owner’s rights whether
- the domain name owner has any legitimate claim to the name,
- the domain name has been used for legitimate business purposes,
- the domain name owner has displayed an intent to divert customers away from the trademark owner’s site,
- the domain name owner has offered to sell the name for a profit, or
- the domain name owner has registered multiple domain names that are similar to registered trademarks, among other things
A trademark owner can recover an improperly registered domain name in these situations.
Although there are significant areas of overlap between trademark use and domain names, the two sets of rights differ both in how they are acquired and how they impact one another. A business with an online presence should pay careful attention to both sets of rights when building a brand and investing in online advertising.