Domain Names and Trademarks - Legal Issues

Nov 13, 2008 • 4:37 pm | comments (5) by twitter Google+ | Filed Under WebmasterWorld PubCon 2008 Las Vegas
 

Moderator: Melanie Mitchell Speakers: Deborah Wilcox, Partner, Baker & Hostetler LLP Clarke Walton, Founder, Walton Law Firm David Naffziger, President & CEO, BrandVerity, Inc.

Clarke Walton starts the session.

Started out as an SEO before became a lawyer. Paid for law school through affiliate marketing.

Two most popular ways domain name disputes are resolved are through the UDRP and ACPA. Both enacted in 1999 to deal with cybersquatting. UDRP is like biding arbitration. Less formal. No hearing. ACPA on the other hand is more involved, it's actual litigation. Each of the two options has pros and cons. UDRP is fast, and works well against international registrars. Costs are fixed and easy to estimate. Attorney fees generally $3-$5k. Down side is that it's hard to get domain transferred if you win, can't recover damages, can't recover attorney fees.

ACPA: Benefits - can get domain name transferred to you if you win. Can get damages recovered. Up to $100k per domain. Can get emergency relief, and attorney fees. Expensive, difficult to estimate costs.

Brett asked Clarke to use a case study to prop up the central theme. Shares a story that everyone should identify with. The domain name is Pubcon.com. Was registered 9/22/03/ The original registrant was Clarke. Bought the domain name, and offered it to Brett.

Trademark strength: Trademark = source identifier. Anything that functions to identify the origin. Not all trademarks are created equal. 5 levels of trademark strength.

Fanciful is the most powerful, Xerox is an example. a word that has been made up.

Arbitrary is a strong one as well. Take a word that means one thing, and use it to mean something else - Apple is a great example. Apple is also an example of a generic or weak trademark. Between these types, are descriptive and subjective. Lines are fuzzy. Descriptive is relatively weak, American Airlines is an example. It's descriptive of the product. But over time AA spent money and time building the brand. You think of the brand nowadays. Suggestive - Microsoft is an example. Requires a bit of thought to decipher meaning.

Examples:

Fanciful: Zillow, Expedia - totally made up words.

Arbitrary: Kayak, Amazon.

Suggestive: - Youtube, Moviebuff, Gamespot, SeatGuru.

Descriptive: - IMDB, HomeLoanCenter.

Generic: - Hotels.com, Lawyers.com. Court said these are generic trademarks, few rights.

Who has priority? If two people are using the same mark - who has greater rights? In the US - the key is whomever uses it commerce first. Less to do with registration date - but rather date of use in business. Back to Pubcon example. Brett filed the trademark in 3/2004, but first use was in 2001. First common law rights. Pubcon is probably suggestive since it has the word "con" or conference.

Bad faith? Clarke registered the domain before registration of trademark. did not exercise bad faith, because he gave it to Brett. But if he bought it and sent it to SES, and took Affiliate commission - that is bad faith. The content on the domain name matters! What you do with the domain affects the right. Venetian is arbitrary. It's a hotel hear in Vegas, but also describes location. If publish content on Vegas casinos - bad faith. If publish content about Venice Italy, no worries - solid defense.

Next up is Deborah Wilcox.

Deborah reviews an interesting case study for us. Punch Clock Inc. v Smart Software Development. Came up in Florida courts earlier this year.

Plaintiff was Punchclock.com. Sells a computer program to record employee hours and pay. Generic name. Plaintiff did register the trademark covering the product. Was a supplemental register. There are 2 types, supplemental and principal. Supplemental is an admission that you don't have rights yet, but are on the books with the government and can use the trademark symbol - but have no rights. There are some benefits and drawbacks. Later, they filed as principal. When a term starts out weak, but brand strengthens. Need evidence of distinctiveness. Owner filed an affidavit.

The plaintiff described PunchClock.com as exactly what the name implies. A full featured punch clock software package.

The defendant owned Punch-Clock.com and was located in Canada. Also sold products to the US - time keeping software program. Plaintiff sent a cease and desist letter. A way to talk before going to court, to see if you can work things out. Was some email exchange, and Punch-clock.com felt safe up in Canada, and felt that the punchclock.com didn't have much weight. Maybe had stronger rights in Canada - rights go country by country.

The dispute: 6 years later. Lawsuit in 2007 in Federal Court. Why was there a delay? Courts usually have an issue with that. The other side builds up the business - latches is the term used as the defense. Usually there would have been a fight if there is a real trademark. The battle was happening in the organic results in Google, and translated into Alexa rankings. No evidence that other party was buying search terms. Defendant didn't end up showing to court. Shows lack of care. Not a good thing. Judge basically takes as true the allegations of the complaint. Canadian defendant defaulted.

The judgement for the plaintiff: Trademark infringement, cybersquatting, bad faith use, unfair competition. Likelihood of confusion.

What happened to the winner? Won the domain name. Awarded $100k which is the max damages. Awarded $30k in attorney's fees and costs, finding exceptional case. Judge ordered over $1m in corrective advertising damages.

Defendant bought PPC keywords from Google @ $136 / day. Time 7 years - total = $347k. 3X for willful nature of infringement = $1,042,440. Judge felt the $1m was too low because of this.

Unlikely that the plaintiff collected. Need to take the case to Canada, and even if you win - need to find assets. Now punchclock.com ranks #1. The defendant changed the name of the company and ranks lower. The plaintiff gloated the winnings of the court case on the homepage of the site.

Take-aways - Look for legal issues with competitors sites if not ranking high organically. Be creative in asking for corrective advertising. Show up to court! Find substantive experts. Attack casual assumptions on harm and money damages. Law protects consumers against confusion. To recoup funds, need to prove harm, such as lower rankings. Was the loss to plaintiff really a million dollars?

David Naffzigger wraps up the session:

Domain monitoring: Think like an abuser. Which domains to monitor register if you operate a website? Brand extensions, typos, alternative extensions.

Why would someone register a misspelling or variant? To make money on type in traffic, or SEO purposes, or to sell it to you. Maybe it's to defame or embarrass the company.

Tools to find typos - domaintools.com is great. will give you common errors and misspellings, and creates good lists of typos.

Find brand extensions: People aren't just typing "Virgin Atlantic" - typing in "Virgin Atlantic Mobile" or "Virgin Atlantic Phone". Adwords tool and KeywordDiscovery is great for finding variants of queries. Domainsearch.com is great for International registrations. Can be scary if brand is trademarked in Russia or places where trademarks are not strongly enforced.

Multiplex the three forms - combine typos and countries, brand extensions - virginatlanticmobile.co.uk, etc. Not great tools to do this - Excel can be useful. Figure out which ones you care about. Can't go after all of them. Find the ones that have traffic. Domains that are used by competitors. Domains that are offensive.

Tools to estimate traffic: Adwords keyword tool - plug the domain name in and the keyword phrase. KeywordTracker. Look at the registration date. Older registrations are more likely to have traffic. Buy Adwords for every typo in question.

Compete and Alexa can be useful.

PPC Trademark Abuse: Higher bar for PPC Abuse since it requires more investment to operate. Domain name registration is much cheaper, PPC abuse is costlier to operate. Abuse is conducted by organizations that compete with you, affiliates, or strongly dislike you.

How they hide from you? Reverse geo-targeting. Hide ads from where company headquarters are. Buy ads in every state where business does not have offices. Day-parting - run the ads at night when workers are asleep. Copy your ad text - and redirect it to affiliate link.

How they dodge Google filters? TM in display URL. Variations on TM (typos, spaces, etc.). Macy's for example does not have a trademark on "MacysStore".

Get your trademark registered in Google, Yahoo, MSN. Try to register your typos and extensions with Google. Make sure you use an email address from the domain you are protecting.

If that fails, trademark your most trafficked typos and then go back to Google.

Monitoring: Manual - Use Google translate or other translation tools. Use other proxies - AOL, or anything that gets your IP from a different location. Do the testing at off hours. Look at the page source.

Live coverage provided by Avi A. Wilensky of Promediacorp, a Manhattan based online marketing agency.

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Comments:

Samm I Amm

11/14/2008 12:49 am

Yeah, I saw this posted on http://www.OceanfrontDomains.Com and wanted to add that the new vanity domains that ICANN is considering would make this situation exponentially worse. They really need to think things out before opening that huge Pandora's Box.

No Name

11/18/2008 09:11 pm

Great summary. I think one of the biggest misconceptions in trademark law is the ideas that by getting a federal trademark registration, you can stop all others from using that name or the domain name, even if they started using the name before you did. This is wrong. The first user has prior rights, regardless of registration!

No Name

03/28/2009 06:13 am

I think one of the biggest misconceptions in trademark law is the ideas that by getting a federal trademark registration, you can stop all others from using that name or the domain name, even if they started using the name before you did. This is wrong.

Petrogil1

04/10/2012 10:48 pm

I registered a dropped name. Partial name is matched with a trade mark. I did not check if TM. I did not use the domain than parking. Now the TM owner went to Arbitration, who sent me notice to engage lawyer or response. I cannot pay as I don't have my job. How to resolve it without  penalty. I replied to them that  I will not use or develop the domain. It will expire subscription. Please advise what to do.

JennyL

04/24/2014 08:11 am

Could anyone help me or point to someone who can? I registered on Friday (April 18th) for a domain name that I thought of... which was available and was billed. However, I needed to activate the domain with the hosting company and that didn't happen immediately. On April 20th, my name was no longer mine, someone had bought it. On April 21st, the name was on GoDaddy.com for $69.99. GoDaddy probably has a spyware on search engines and so on for domain name searches. What I don't understand is that how could they snatch my name if I am still pending activation with my hosting company? Just felt quite disgusted by the dirty work that goes on online.

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