2008.10.15

Trademark Owners Must Pursue Cybersquatters or Potentially Lose Their Trademark Rights

Before you sue someone for trademark infringement under the Lanham Act or Anticybersquatting Piracy Act, you better make sure you've been protecting your rights all along. 

In a case recently decided in the United States District Court for the Southern District of Florida, Miami Division, a court again lent credibility to the argument that a trademark owner’s failure to timely protect its trademark rights can result in a waiver of those rights altogether.  In Southern Grouts & Mortars, Inc. vs. 3M Company , Plaintiff Southern Grouts & Mortars sued Defendant 3M under the Lanham Act and the Anticybersquatting Consumer Protection Act over its “DIAMOND BRITE” registered trademark.  3M registered an allegedly infringing domain name www.diamondbrite.com which was the primary driver for the trademark infringement lawsuit.

The court found that the Plaintiff was barred from pursuing its trademark infringement and cybersquatting claims under the doctrine of laches, which is an equitable defense which penalizes Plaintiffs who fail to assert their rights in a timely fashion.  The Defendant 3M filed a motion to dismiss the case based on the defense of laches, which the court granted.  The court found that there was delay in asserting trademark rights, that the delay by Plaintiff was inexcusable and that 3M was prejudiced as a result of the failure of Plaintiff to assert its trademark rights in a timely fashion.   Specifically, the court found that the Plaintiff merely sent emails and letters over a course of five years despite its full knowledge of the alleged trademark infringement and domain name dispute with 3M.  The court concluded that the delay would prejudice 3M because of the fact that eight years worth of evidence would have to be accumulated. 

The lesson to be learned here is one that we have been telling our trademark clients for a long time.  You must proactively protect your trademarks in cyberspace.  That means you must monitor domain registrations and keyword advertising which might diminish your trademark, send trademark infringement notice letters and threat letter where appropriate and pursue these matters under the UDRP or the ACPA in a timely fashion.  Trademarks are worth a lot of money.  Companies must learn to protect their marks or risk losing their rights altogether.

COMMENTS

It's true that you can lose your trademarking rights if you don't do anything about other infringers. The Cornell Library has a good discussion of this here.

Justin, to answer your question, without a doubt a trademark owner should register the corresponding domain name for its trademark. However, defensive registration is usually not enough, especially with all of the typosquatting and other infringing uses today. Trademark monitoring is truly "the way" to minimize the threats to your trademark rights. A quality trademark monitoring system, like the one used by Traverse Legal, monitors domain name registrations, the USPTO for similar trademark applications, and online keyword advertisements. A notice letter can immediately be sent when a conflict arises, and the hope is that a UDRP or costly litigation to protect your trademark can be avoided.

While it is not clear the extent to which a trademark owner must "police" its trademark (i.e. whether a notice letter when you happen to discover an infringing use), trademark monitoring seems to be more reasonable than acting upon mere happenstance.

Hi Great resource I only wish I had been aware of you some time ago.
My warning is in regard to a dispute that happened in 2003 when the Trademark offices in the United Kingdom searched for evidence of use in all the traditional ways but did not use whois as part of the standard search.
I had received a telephone call and subsequent later from the legal representative of a large UK charity offering to purchase my .com registration. I refused to sell informing them that I intended to develop the domain in my dotage for charitable works. Some months later I found that the charity had formally changed its name its to the same as my registration registered the remaining codes and registered a host of categories with trademarks.
I was not aware of the TM applications until after the opposition period had timed out and I believe the dye was then cast ?
If like me you id not understand the TM process or regularly check the TM opposition journals how would one have any idea that this was happening.
Register the TM then you only require the one premium domain registration.

Justin

what is your opinion on this one:

http://www.thedomains.com/2008/10/18/now-that-the-rays-are-winning-pepsi-wants-tropicanafieldcom-why-doesnt-laches-apply-to-this-one/

Isn't one of the "proactive steps" a tradmark holder should take is registering its domain when it is available?

John: Yes, typosquatters are just as much a problem if it is clear they are playing off your trademark rights. You must take reasonable action to protect your trademark rights.

Justin: Great question. You need to be able to show that you are taking reasonable efforts to protect your domain. Every notice and threat letter is a step in the right direction. There are lots of results beyond money damages which can strengthen your mark and allow an infringer a tolerable exit.

Anything on what type of pursuit is required. Can trademark owner use demand letters or are they required to take the it to court?

Best,

Justin

Can a trademark owner lose their rights if it was typosquatting as opposed to cybersquatting if they are not pursued?

(I have a business name others are typosquatting on and I need to make a descision to protect my mark against those types of names as well)

Keep up all the good post!

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