New Domain Name Dispute Policy a Boon to Trademark Owners

By Mark A. Wright
March 6, 2001

Those who use Internet domain names in bad faith beware. On January 1, 2000, the Internet Corporation for Assigned Names and Numbers' ("ICANN")Uniform Domain Name Dispute Resolution Policy (the "Policy") took effect. Under the new policy, if you hold and use a domain name that is identical or confusingly similar to an existing trademark, and do so in bad faith, you may lose all rights in the domain name.

The purpose of the Policy is to provide an administrative process to resolve disputes between legitimate trademark owners and those who adopt domain names that are identical or confusingly similar to another's trademark. The Policy applies to all registered domain names, and establishes a mandatory administrative process for resolution of such complaints. Unlike the prior policy, both owners of common law and registered trademarks can now block the use of infringing domain names.

Trademark owners bringing a complaint under the Policy must demonstrate the following: (1) the domain name is identical or confusingly similar to the owner's common law or registered trademark or service mark; (2) the holder of the domain name has no rights or legitimate interests in the domain name; and, (3) the domain name was registered and is being used in bad faith. If the trademark owner is successful in proving all three elements under the Policy, the trademark owner can require that the domain name be transferred to it, or that the domain name be cancelled.

Since the Policy has been in effect, approximately 1,000 decisions have been issued, seventy-seven percent of which were in favor of the trademark owner. For example, the following domain names have been found to be confusingly similar with the complainant's trademarks: "americanonline.com" confusingly similar to AMERICAONLINE, "homail.com," "hotmai.com" and "otmail.com" confusingly similar to the trademark HOTMAIL, and "jahu.com," "youhoo.com," "bostonyahoo.com" and 34 other variations of the trademark YAHOO! found to be confusingly similar with YAHOO!

While the similarity of the domain name to the trademark is an important element of proof, most of the cases turn on whether the domain name holder acted in bad faith by registering and using the domain name in question. Bad faith registration and use of a domain name may consist of evidence that domain name:

  • was registered or acquired primarily for the purpose of selling, renting or otherwise transferring the domain name registration to the person initiating the complaint who is the owner of the trademark/service mark or to their competitor for more than the out of pocket costs associated with the domain name;
  • was registered to prevent the owner of the trademark/service mark from using the mark in another domain name;
  • was registered primarily for the purpose of disrupting the business of a competitor; or
  • was used intentionally to attempt to attract for commercial gain, Internet users to the web site or other on-line location, by creating a likelihood of confusion with the trademark owner's mark as to the source, sponsorship, affiliation or endorsement of the web site or location or of a production or service on the web site or location.

Thus, this bad faith requirement is intended to address the all too common occurrence where the domain name holder has engaged in cybersquatting or has tried to capitalize on the good will associated with a trademark by creating a domain name based on a likely misspelling of the trademark in order to divert consumers to the illegitimate website.

Perhaps the most compelling aspect of the Policy is that it has established a relatively inexpensive and quick mechanism for resolution of domain name disputes compared to litigation: complaints costs approximately $1,000 to $2,500, and are designed to be resolved in less than 57 days. Disputes are heard by providers approved by ICANN, such as the World Intellectual Property Organization. While the Policy does not create an appeal process, either party may file a civil action against the other party which will stop implementation of the provider's decision.

In sum, the Policy provides an effective tool for resolution of domain name disputes for trademark owners. However, beware if you are caught on the other side!