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Domain Name Dispute

If you register a domain name that matches another company's trademark, is it infringement or just opportunism?

[December 6, 1999]

On the ISP-Webhosting list in November 1999, JM posted this provocative question concerning domain name registration:

"We have registered and paid for a domain name, which is the same as the name of a product that is being sold through a company my client works for. The company is trying to intimidate my client into releasing the domain name back to them, because the name is trademarked—or something along these lines. Should we give the domain name back, use the name, or offer to sell it to the company?"

 

A number of respondents were quick to point out the dangers of infringing on a trademark.

[CL, for one, advised returning the domain name] "I am not a lawyer, but I am aware that if you register a domain name that contains a trademarked name, you are liable for trademark infringement. You have to give the domain name to the trademark holder."

[S raised the issue of intent] "If you registered the name for the sake of selling it, then you will have a problem."

[JS echoed this] "I think that this would depend on how the domain is used. If you registered Microsoft.net and tried to act like Microsoft.com, I believe then a trademark rule would apply."

Other list members believed that the client might have a legitimate claim to the domain name:

[CF observed] "If the trademark was 'Ford' and your client was owner of the Ford Cleaning Service, then Ford Motor Co. wouldn't have any particular claim on his domain name. A trademark is valid only in the business area that it relates to; it doesn't give the owner absolute rights to a common word."

[M seconded this point of view] "Domains are global—there can be 20 trademarks on the same name across the globe. Sell it to them for a fair but profitable rate that is cheaper than potential legal fees."

[C offered some tactical suggestions] "Rule number one: Never offer the name for sale to the other party. You can, however, offer to be reimbursed, since you're currently using the name, receiving email through it, etc. Write to the other party directly—bypassing their lawyers—and tell them you're willing to come to some agreeable arrangement.

"Meanwhile, talk to someone about the cost of trademark cases and what they can be awarded. That will give you a feel for what the company can afford to pay for a settlement."

[WW put all the pieces together] "If your client was operating a legitimate business under that domain, registered the name in good faith without knowing of the trademark, and his business is in an area that is not likely to cause confusion or otherwise dilute the rights of the trademark holder, then he might have a chance. If he registered it hoping the company would pay him for it, the courts have taken a very dim view of this practice and have awarded monetary damages (which can be quite high). Domains have been ordered turned over to the trademark holder in numerous clear cases of infringement."

[Later in the thread WW offered the definitive advice] "Bottom line . . . TALK TO AN ATTORNEY."

—End

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