Monday, December 13, 2010

AntiCybersquatting Consumer Protection Act: The Elements of the Cause of Action

Last time we visited the legislative history behind the AntiCybersquatting Consumer Protection Act. Today, we will explore the elements of an ACPA Cause of Action. An ACPA claim is, on its surface, straightforward. As the ACPA was designed to deal with those malcontents who seek to make land-grabs in the domain name wild west, the legal analysis generally turns on "bad faith."

In order for a trademark owner to bring a claim under the ACPA, the trademark owner must establish:

[15 USC § 1125(d)(I)(A)] [Bavaro Palace 256 11Cir 2006] [Bosley 680 9th Cir 2005] [DaimlerChrysler 204 6th Cir 2004] [Shields 482-84 3d Cir 2001] [Career Agents Network Slip p. 7 EDMI 2010] [Rearden NDCA 2010] [Anlin slip 9 DCCA 07]

15 USC § 1125(d) (2009) Cyberpiracy prevention

(1) (A) A person shall be liable in a civil action by the owner of a mark, including a personal name which is protected as a mark under this section, if, without regard to the goods or services of the parties, that person-

(i) has a bad faith intent to profit from that mark, including a personal name which is protected as a mark under this section; and

(ii) registers, traffics in, or uses a domain name that-

(I) in the case of a mark that is distinctive at the time of registration of the domain name, is identical or confusingly similar to that mark;

(II) in the case of a famous mark that is famous at the time of registration of the domain name, is identical or confusingly similar to or dilutive of that mark; or

(III) is a trademark, word, or name protected by reason of section 706 of title 18 or section 220506 of title 36 .

Unpacking the individual elements of the cause of action

Distinctive Or Famous Trademarks

The ACPA is not available for everyone – it is only available to owners of famous or distinctive trademarks. [Shields 482 3rd Cir 2001] Factors that a Court will look at to determine whether a mark is famous include whether the mark is sufficiently distinctive as opposed to being generic, whether it has been in use for an extended period of time, the amount of the investment made in promoting the mark, the geographic region where the mark is used, and whether there are similar marks in use. In addition, courts will look to see whether the mark has been registered with the Patent and Trademark Office. The Court can recognize that a mark is distinctive without it being famous. Examples of marks that have been found to be famous or distinctive include Sporty’s Farm, Joe Cartoon, Porsche, and VW. However, CLUE, as in Hasbro’s detective board game, has been found to be neither famous or distinctive.

Identical, Confusingly Similar, or Dilutive

The ACPA examines the potential impact of a domain name on the trademark:

The guidelines for consideration (these are court created guidelines not listed in the statute) "are

  • a) strength of mark;
  • b) degree of similarity between the marks;
  • c) the proximity of the products;
  • d) the likelihood that the senior user of mark will bridge the gap;
  • e) evidence of actual confusion;
  • f) the junior user's bad faith in adopting the mark;
  • g) the quality of the junior user's product; and
  • h) the sophistication of the relevant consumer group.”

[Greenpoint] There is some overlap between these factors and the ACPA bad faith factors.

In Greenpoint Financial Corp. v. S & H, a Brooklyn bank sought to challenge the use of the domain name by the defendant. Defendant was known for its green stamps marketing program back in the 60s and 70s. Both companies had established intellectual property in the term “greenpoints” although defendant’s use came after plaintiff’s. So this was not exactly a great challenge for plaintiff. Both parties had interests in the term and the term itself was somewhat generic. For plaintiff, Greenpoint is simply the neighborhood in Brooklyn where the bank was located. Furthermore the Brooklyn phone book showed that 50 other companies had Greenpoint somewhere in their name. But looking specifically at the issue of the likeliness of confusion, the court concluded that the name was geographically descriptive and therefore not strong, the services provided by the companies is distinct, it is unlikely that the two companies will directly compete, and there was insufficient evidence of actual confusion. For these and other reasons, the Court denied Greenpoint Financial Corp. attempt to challenge S&H use of the domain name. [Greenpoint]


Derived From: The AntiCybersquatting Consumer Protection Act, Report 106-140, 106 th Cong., 1 st Sess. Page 8 (Aug. 5, 1999) (Legislative History)

"The Committee intends the prohibited ''use'' of a domain name to describe the use of a domain name by the domain name registrant, with the bad-faith intent to profit from the goodwill of the mark of another. The concept of ''use'' does not extend to uses of the domain name made by those other than the domain name registrant, such as the person who includes the domain name as a hypertext link on a web page or as part of a directory of Internet addresses."

Bad Faith Intent to Profit

"Bad faith" is the $10,000 question in this analysis. It consists of 9 elements, each of which can be its own landmine. In the next post, we will explore how one may or may not but the "bad" in "faith."


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