You have been accused by threat letter, lawsuit or UDRP complaint of engaging in trademark cybersquatting. The penalties for cybersquatting can be serious. Statutory damages can be awarded under the Anti Cybersquatting Piracy Act (ACPA). A Uniform Domain Name Dispute Resolution Arbitration could result in forcible transfer of your otherwise valuable domain name to the complainant.
An internet law attorney has sent you a trademark infringement and cybersquatting threat letter demanding that you immediately transfer the domain, identify other domains in your domain portfolio that may infringe the alleged trademark and potentially pay money damages in exchange for a release of liability. You need to know how to defend yourself against claims of cybersquatting and domain name trademark infringement.
If you have been accused of trademark infringement as the result of a registration of a domain name, or accused specifically of cybersquatting a trademark in the registration, use or trafficking of a domain name, you need to understand these are serious matters. Sometimes the complainant, the attorney sending the threat letter, will simply request that you turn over the domain name. That can be the end of it in certain instances. But in other instances, the attorney wants a lot more than just the domain name. They want blood. They want you to pay for your sins of cybersquatting. You need to know how to defend yourself.
The first thing that you should understand is that things that you say, emails that send, any communication that you have with the other side could potentially be important evidence against you. So, it is critical that you do not say the wrong thing when you’ve been accused of cybersquatting.
One of the common mistakes that our internet law attorneys see after the case comes through the door is that the person accused of cybersquatting has sent an email to the complainant or to the attorney for the complainant saying I’ll sell you the domain for $1,000 or some amount. Well, one of the bad faith factors under both the UDRP and ACPA is, of course, whether or not you try and “traffic in the domain.” That means that you tried to sell the domain to the trademark holder at an inflated price. You are, in many instances, now dead in the water if, in fact, you try and sell that domain name to a valid trademark holder, even if that wasn’t your intent at the beginning of the matter, even if that wasn’t your intent when you registered the domain name, even if you weren’t aware of the trademark when you first registered the domain name, you have now put yourself in completely different position in terms of defending against a claim of bad faith cybersquatting. You have now set up this perfect argument that, in fact, you were always trying to monetize the trademark in the registration of the domain name. What you’re trying to avoid here is the he said/she said type arguments. You want things to be clear.
So, the first thing you need to know in defending yourself against a claim of cybersquatting or trademark infringement is don’t screw up, don’t make it worse or don’t take a very defensible domain name and provide ammunition to the other side.
The other thing that you really need to know here is that there are a lot of different ways that these matters are handled, especially at the UDRP level or even in federal court under the ACPA, when a cybersquatting claim ripens into litigation, when someone sues for cybersquatting, when you get sued for cybersquatting.
So, the first thing you need to know here is that, if these types of things, you know, come down the pipe unfortunately, if you get a threat letter, if you’re charged with cybersquatting in some form, is that while the matter can be serious in terms of statutory damages and damages and otherwise and the cost of attorney’s fees, the cost to defend yourself against a claim, you got to be very smart here because judges and UDRP arbitrators go in different directions on these things on the same facts, so don’t get cocky. Because just as the trademark holder, the trademark owner should get cocky, neither should the respondent, even when they “did nothing wrong,” Okay? Because, you just don’t know how UDRP arbitrators are going to handle this. You just don’t know how our courts are going to handle this if it ends up being a cybersquatting in litigation. Be very careful.
You’re, typically, going to try and negotiate a resolution to this matter, and that resolution could be: “hey, this domain is not worth it. I am going to give this domain name in exchange for a release.” Or it could be: “hey, I need to educate the other side that I am not a cybersquatter. I need to do what I need to do in order to convince them to go away, just go away.” And in many cases, trademark owners do, once they get more information because, especially with proxy services or privacy services on the domain registration side, a trademark owner doesn’t know who they’re dealing with. So, you have to have some sophistication about how you go about dealing with the person who’s threatening you.
Now, there are lots of specific defenses to cybersquatting and I won’t get into all of them here, but there is this legitimate use, it’s the legitimate business purpose that you need to be able to show when you register the domain name. Parking pages with purely ads on them can be very difficult to defend because courts and UDRP arbitrators, in certain instances, look at those parking pages, those ad pages, too see whether they pass the, kind of, smell test. That is, they didn’t really have a legitimate purpose in registering the domain name because all you do is put up an ad page. You had no use for the domain name itself, you’re just trying to monetize other people’s ads.
The other challenge there is that those ad pages, the software that drives the ad, tend to gravitate toward trademark uses. So, even if you’ve got a very generic domain name like coffeecup.com, there could be a trademark out there called coffee cup, and that trademark could be used in relation to a company that’s selling snow shoes. Well, it’s not descriptive of snow shoes and if your ad starts showing links and ads for competing snow shoe companies, that’s going to be a screenshot that’s going to be Exhibit A to the complaint, and you may or not win the argument that you didn’t pick the ad, the add is there. It’s clearly infringing on the trademark of the owner of the trademark and the fact that you simply turn on an automated process and walked away, oftentimes, doesn’t get you very far.
The other key defense is this concept of bad faith. I’m not a bad faith cybersquatter. I didn’t register the domain in bad faith. Now, this element tends to come down as circumstantial evidence that typically is a he said/she said situation. In order to defend against bad faith cybersquatting, you should be prepared the arbitrator or the court or the judge in litigation, who you are. In many instances, it makes sense to turn over your portfolio, in whole or in part, if it helps you show that you don’t have trademark domain names in the portfolio, that you’re a white hat and not a black hat domainer.
So those are the things you need to really be aware of if you have to defend yourself against a claim of cybersquatting or trademark infringement. If you end up in arbitration or in a litigation case, if someone files a lawsuit against you, you need to take it seriously, you need to be smart. Educate yourself before you have any contact with the other side. Buy yourself some time by saying, can you give me ten days to respond, if they’ve only given you three days to respond. Do research on the internet. Get yourself up to speed. Hire a cybersquatting lawyer. Get free advice from a cybersquatting attorney and make sure you do not take a challenging situation and make it into a more difficult situation.
That’s all for Cybersquatting Law Radio for today. We will see you next time.
Too many people responding to claims of cybersquatting make the matter worse before contacting an internet lawyer to respond. Educate yourself about cybersquatting before you respond.
Posted by: Enrico Schaefer | 2011.10.24 at 10:11 AM