Trademarks and Domain Names - Basic Information

Definition of a Trademark
Trademarks and Domain Names: What is the difference?
Trademarks must be Distinctive
Selecting a Trademark
Protecting a Trademark
Improper Use of Trademarks in Domain Names and Cybersquatting
Federal Anticybersquatting Consumer Protection Act
Uniform Domain Name Dispute Policy

Definition of a Trademark

A trademark can be a word, a logo, a number, a letter, a slogan, a sound, a color, or sometimes even a smell which is identifies the source of goods and/or services with which the trademark is used. Trademarks can be owned by individuals or companies and should be registered at a governmental agency which is usually referred to as the Trademarks Office. When a trademark is used in connection with services, it is sometimes referred to as a "service mark". The trademark registration symbol - the letter R in a circle (®) - may not be used unless the trademark with which it is associated has been actually registered with the governmental agency alluded to above.

Trademarks and Domain Names

Trademarks not infrequently are used in domain names by taking the trademark and adding a Top Level Domain (TLD) designator (such as .com, .net or the like) to it. Thus it is not at all surprising to see domain names such as kodak.com, ibm.com and hewlettpackard.com registered. However, there is no requirement for a domain name to be a trademark. As such, generic terms also function as domain names.

Domain names are registered through various governmental, quasi-governmental and private groups. Most of the non-country specific domains (.com, .net) were, until recently, registered by Internic. Now they are registered by registers appointed by the Internet Corporation for Assigned Names and Numbers (ICANN). Since a Domain Name Server (DNS) connected to the Internet is required to associate domain names with static IP addresses, you may wish to register a domain name via your Internet Service Provider (ISP) since your ISP can easily provide the needed DNS. Otherwise the register you select to register a domain name may provide requisite DNS for you. You can find a list of registers appointed by ICANN at http://www.icann.org.

Country specific domain names are registered by other agencies. Country specific domain names have a two letter International Standards Organization (ISO) code as the TLD. For example, ibm.co.kr would be a possible domain name in South Korea. KR is the two letter ISO code for South Korea. CO is a designation in Korea (and in many other countries) for a company or other business enterprise. And IBM is a registered trademark of International Business Machines.

Designators (such as 'www') which precede a domain name are used to identify a particular computer or a group of computers at the domain in question. For example, our firm has several domain names, two of which are ladas.com and ladasparry.com. When the designator www is combined with a domain name such as ladas.com to form www.ladas.com, that is a reference to a specific computer (or a group of computers) in the ladas.com domain. These references are called Uniform Resource Locators (URLs).

Trademarks Must be Distinctive

Generally speaking, trademarks should be distinctive and may not be either generic or merely descriptive of the goods or services to which they pertain. As such, the word "vegetable" cannot be registered as a service mark of a supermarket, since it is certainly descriptive of items which a supermarket sells. In the same vein, it cannot be registered as a trademark for carrots, since it is a generic term for carrots. On the other hand, the word "vegetable" might well serve as a trademark for bicycles since it has little or nothing to do with bicycles. Additionally, trademarks should preferably not be geographical or primarily a surname. Thus, "Paris" cannot serve as a trademark for perfume in many countries. In many countries, trademarks which comprise mere letters and/or numbers (i.e. the proposed trademark cannot be pronounced as a word or words or just has too few letters) or are surnames are considered to be indistinct. Nevertheless, these legal flaws in trademarks are not always fatal and, in a number of instances, a trademark registration can still be obtained for trademarks that are arguably merely (i) descriptive, (ii) a surname, (iii) geographic or (iv) indistinct.

Selecting a Trademark

One of the first steps in selecting a new trademark is conducting a trademark availability search in the countries where the proposed mark will likely be used. Obviously, if the exact trademark you have chosen or if a confusingly similar trademark has already been used or registered by a third party for similar goods or services, a new trademark should be selected. The legal analysis as to whether two trademarks are confusingly similar is based upon a combination of factors: the similarity in the trademarks, the similarity in the goods and services, the channels of trade in which the goods or services are marketed, and the distinctiveness of the trademarks. It is our experience that persons and companies which are new to selecting trademarks often get "emotionally involved" with a proposed trademark before they have the proposed trademark searched. A trademark attorney may well end up being the bearer of bad news if the proposed trademark is not available or is indistinct. Thus, just because you call something the "alpha project" or the "omega concept" in house while you are readying a product for the marketplace, do not become too enamored with the words "alpha" or "omega" as those project names may end up being unavailable to you as trademarks. When you start thinking about selecting a trademark, do not limit yourself to a single selection. Rather, have several possible selections in mind. If your first selection proves to be unavailable, perhaps you will have better luck with your second or third choices.

In the United States, such a trademark availability search can cover trademarks registered at the United States Patent and Trademarks Office (USPTO), the registers of the individual states of the United States, as well as certain digests reflecting trademark uses. Generally, in foreign countries, comparable searches are conducted at that country's trademarks office - countries other than the United States usually do not have registrations at the state level.

Protecting a Trademark

If the trademark availability search indicates that the trademark you selected is available, you should seek to Register the Trademark in the countries of interest. Trademarks can be registered in virtually every country in the world. In some countries, having a Trademark Registration is a necessary prerequisite to enforcing trademark rights against an infringer. In other countries (such as the United States), having a Trademark Registration can certainly reduce the cost of enforcing your trademark rights against an infringer since it simplifies the showing which need be made in a court of law.

Outside the United States, a company or individual usually need not use a trademark prior to obtaining a trademark registration. In the United States it is possible to apply for a trademark registration before making use of the trademark, but use of the trademark must commence in the United States before a registration will issue. Therefore, even in potential markets, you can often prevent a third party from registering or using a trademark if you are the first to apply for a registration. By applying for a registration in advance of your use (and actually obtaining it in advance of your use, where it is possible to do so), you help assure unfettered use of your trademark in the future. However, in countries where you can obtain a registration in advance of your use of the trademark, you must begin use of the trademark within some time period, typically two to five years after registration, otherwise your registration may lapse or be subject to attack for non-use.

Additionally, the fact that trademarks can be registered before they are used also presents you with certain risks. The biggest risk is that another party will register that which you regard as your trademark. And since they often do not need to make use of the trademark for a two to five year period after registration, you may find yourself in a position where it is either very difficult or even impossible to take legal action against them. Thus, they are certainly in a position to cause you considerable difficulties once you decide to start exploiting the trademark in the country concerned. While using a Trademark Watch service can help alert you to these matters when they arise, you need to register your trademark(s) where you plan (or hope) to do business, either directly or via distributors or agents. If you do not take action to protect your trademarks by registering them, someone else is rather likely to do so.

Improper Use of Trademarks in Domain Names and Cybersquatting

Since trademarks can be used as the distinctive portions of domain names, certain enterprising individuals have made a 'business' of registering other parties' trademarks as their own domain names. Not surprisingly, this practice (which is called cybersquatting when the domain name is just registered but not used) has given rise to a flood of litigation as the trademark owners have become aware that their valuable trademarks have been misappropriated by these parties.

In addition to normal trademark litigation, two additional techniques for dealing those who have made a 'business' of registering other parties' trademarks as their own domain names came available in late 1999. The Federal Anticybersquatting Consumer Protection Act (15 USC § 1125(d)) and the Uniform Domain Name Dispute Policy administered by ICANN give the trademark owner additional weapons to protect their trademarks in the context of a domain name. The Uniform Domain Name Dispute Policy is fast and inexpensive compared to litigation in the Federal Courts, but you cannot get money damages there and you will do no discovery on the other side. The Federal Anticybersquatting Consumer Protection Act provides all of the discovery and protection of party's rights which you would expect from Federal Court litigation, but also at a much higher cost and in not so nearly an expeditious proceeding.

Federal Anticybersquatting Consumer Protection Act

Under is act, the owners of federally registered trademarks can seek statutory damages of up to $100,000.00 per domain (for domain registered after November 29, 1999) and can also seek a temporary restraining order to prevent use of the domain name in question while a lawsuit is pending before the court. A lawsuit can be brought even against parties who are not located in the United States under the theory of "In Rem" jurisdiction.

This act prohibits the registration or use of a domain name with bad faith intent if the domain name (1) is identical or confusingly similar to a mark or name that was distinctive when the domain name was registered, (2) is identical or confusingly similar to or dilutive of a mark or name that was famous when the domain name was registered, or (3) consists of a mark such as RED CROSS or OLYMPIC. The criteria in assessing whether there has been "bad faith intent" include whether the registrant (1) has intellectual property rights in the domain name, (2) has used the domain name in connection with a bona fide offering of goods or services, (3) has offered to sell the domain name registration for financial gain without having used the domain name in a bona fide offering of goods or services, (4) has made false or misleading information in registering the domain name, or (5) has warehoused many famous marks.

Uniform Domain Name Dispute Policy

ICANN's Uniform Domain Name Dispute Policy or "UDRP" came into being in the fall of 1999. This policy is to be followed by all registers in the .com, .net and .org top level domains. A dispute is raised in an administrative proceeding initiated by a trademark owner who files a complaint with an ICANN-approved dispute resolution provider. The party who obtained the domain name in question agreed to submit to this administrative proceeding by signing up for the domain name in question in the .com, .net or .org domains.

The have been a number of decisions rendered by the ICANN-approved dispute resolution providers, most of which have favored the trademark owner over the domain name registrant. A current statistical summary of the decisions rendered to date as well as links to all decided and pending cases and the full text of the URDP can be found at http://www.icann.org.

Under the UDRP, the party filing the complaint must allege and prove that:

(1) The domain name in question is Identical or confusingly similar to a trademark owned by the party filing the complaint;

(2) The domain name registrant has no rights or legitimate interests in respect of the domain name in question; and

(3) The domain name has been registered in bad faith.

The issues which tend to be important in these decisions are (1) whether the domain name registrant has any "legitimate interests" in respect of the domain name and (2) whether domain name was registered in "bad faith." The evidence filed by the parties to the arbitration can probably take any form - there are no rules of evidence such as those found in a court of law - but most evidence tends to be documentary. No discovery can be made on the other party or on a third party.

A decision is usually rendered by a single arbitrator (it is possible to have a three arbitrator panel but that causes the arbitration fees to increase from $750.00 to $2500.00). The arbitration process proceeds quickly. The domain name registrant has twenty days to reply to a complaint and, if no response is filed, the arbitrator(s) will decide the case based upon the complaint alone. After the time period for the registrant to respond ends, an arbitrator or a panel of three arbitrators is appointed to hear the case and they are expected to render a decision in two to three weeks. As such, a decision is usually rendered very quickly, and the decision will be either to maintain, cancel or transfer the domain name. If the decision is to transfer the domain name, the transfer occurs ten days later unless ICANN receives notice that a lawsuit has been filed concerning the proper ownership of the domain name.