The Domain Name Game:
How to Protect Your Trademark on the Internet

by Neal H. Klausner and Andrew D. Herz

If your company has a site on the World Wide Web, you want to make it easy for consumers to find you. The most efficient way to ensure that consumers find your site is to have an easily recognizable Internet address, also known as a domain name. Accordingly, companies often adopt domain names which incorporate a trademark that consumers associate with that company. Some examples of effective domain names are Ford Motor Company’s ford.com, the Xerox Corporation’s xerox.com, and Coca-Cola’s cocacola.com.

Because every domain name is one-of-a-kind, choice domain names are hard to come by. Domain names are registered in the U.S. by Network Solutions, Inc. (NSI), located at 505 Huntmar Park Drive, Herndon, VA 20170. NSI has an exclusive contract through mid-1998 with the InterNetwork Information Center (InterNIC) to process registrations for certain top-level domain names, such as .com, .net and .org. Applicants must pay a $100 registration fee, as well as a $50 annual maintenance fee which is billed beginning after the first two years of registration. With some limitations, NSI will register—on a first-come, first-served basis—any combination of up to 24 alphanumeric characters to any applicant who has access to at least two "domain name servers." A domain name server is a "host" computer that is accessible on a full-time basis to other computers on the Internet and is loaded with software capable of responding to domain name inquiries. Registering a domain name with NSI is the critical step that tells other computers on the Internet which host computers are associated with each domain name. Applicants must certify to NSI:

a. that all statements in their application are true;

b. that their chosen domain name does not infringe upon the rights of any other party; and

c. that the applicant is not seeking to use the domain name for any unlawful purpose, including injuring the reputation of another person or entity or any form of interference with another entity’s business operations.

However, NSI does not prescreen domain name applications against the more than two million trademarks on file at the United States Patent and Trademark Office. There are already hundreds of thousands of domain name registrations containing the .com suffix (meaning "commercial"), with thousands more pouring into NSI every week. NSI has said that prescreening domain names for trademark conflicts would impose a nine-month delay in issuing domain names.

So what does your company do if it is getting ready to set up electronic shop only to discover that some "cybersquatter" has already registered a domain name using your well-known mark?

Two types of statutes can help companies trying to oust a cybersquatter. Trademark infringement statutes, such as the federal Lanham Act, are likely to prevent a hypothetical company, Ford Classic Cars, from registering the "Ford" trademark with the U.S. Trademark Office, because Ford Classic Cars offers goods and services—rebuilt classic automobiles—sufficiently similar to Ford Motor Company so that consumers will probably be confused by the second "Ford" trademark regarding the source of the goods and services offered by Ford Classic Cars. On the other hand, a company called Ford River Rafting may be able to register "Ford" as part of its trademark, because it offers services—river rafting trips—that are entirely unlike the goods sold by Ford Motor Company. As long as there is no likelihood of confusion between two companies and their dissimilar products, trademark law permits multiple registration of the same or similar name. York Peppermint Patties, York Barbells, and York Air Conditioning are all well-known marks registered by different companies offering very different products. However, unlike trademarks, a domain name such as ford.com can be registered only by one entity because it serves as a singular Internet address.

Dilution statutes, such as the 1996 Federal Trademark Dilution Act ("Dilution Act") and similar statutes in 25 states offer somewhat broader protections than trademark infringement statutes. Dilution statutes protect distinctive or famous trademarks from being "tarnished" by association with inferior or unwholesome products or goods, and from being "blurred" (losing their distinctive quality) by association with the defendant’s goods or services, rather than the trademark holder’s own products and services. Infringement and dilution statutes serve slightly different purposes and can be pursued in different contexts depending on the nature of the Web site associated with the infringing domain name. The "Coca-Cola" case, in which a defendant was enjoined from selling posters reading "enjoy cocaine" in a script and color identical to that used by the Coca-Cola trademark, is a well-known example of the use of another’s mark that is barred by the dilution laws.

There are two primary situations which may force a company to protect its mark from unauthorized use within a domain name. First, Company A may have to take action if Company B, with a similar name, registers a domain name that contains a protected mark of Company A. Second, you may run into cyber-pirates who intentionally register famous marks as domain names in order to pressure the registered holder to pay ransom for the release of the hostage domain name.

The first situation was at issue in the "Candyland" case. Hasbro, Inc., maker of the perennially popular children’s board game "Candyland," was surprised to discover that entering a request to visit candyland.com brought users not to visit with King Candy at Licorice Castle, but to a site operated by Internet Entertainment Group, Ltd., that depicted sexually explicit materials. Hasbro could not seek relief under a trademark infringement theory because there was no likelihood that consumers would believe that Hasbro sponsored or sold the adult materials. But Hasbro successfully obtained an injunction against the initial registrants—who have since moved to the more accurately described adultplayground.com—under the Dilution Act, based on the "tarnishment" theory discussed above.

The second domain name situation which implicates trademark rights is the problem of the cyber-pirate who takes advantage of NSI’s first-come, first-served policy by registering an Internet address under a mark owned by someone else. For instance, three New York City residents recently registered avon.com in an unsuccessful attempt to force Avon to pay for the name. Corporate archrivals have gotten into the act as well, registering domain names for themselves which incorporate the trademark of a competitor.

In one recent case decided by a California federal court, a cyber-pirate named Dennis Toeppen was enjoined from using the domain name panavision.com. Toeppen had registered a number of well-known trademarks and service marks as domain names, including baseball stadiums such as camdenyards.com and yankeestadium.com, airlines such as aircanada.com and deltaairlines.com, and retailers eddiebauer.com and neimanmarcus.com. In the Panavision case, Toeppen had established a Web site bearing the panavision.com domain name, but the site offered no goods or services for sale, and displayed only aerial views of the town of Pana, Illinois. Relying on the Dilution Act, the court found that Toeppen’s "conduct injured Panavision by preventing Panavision from exploiting its marks and it injured consumers because it would have been difficult to locate Panavision’s Web site if Panavision had established a Web site under a name other than its own."

In a second case, an Illinois federal court enjoined Toeppen from using the domain name intermatic.com, where Intermatic, Inc., a computer and electronics manufacturer, had exclusively used the "Intermatic" trademark for more than 50 years. Toeppen briefly used the intermatic.com site to offer computer-related goods for sale, but after receiving a cease-and-desist letter from Intermatic, he revised the site to display only a map of Urbana, Illinois. No longer able to rely on a trademark infringement theory, Intermatic instead argued that the Dilution Act still applied to the map-displaying Web site because it bore the intermatic.com domain name.

The Dilution Act applies only to commercial uses of a famous or distinctive mark. Thus, there was a major question in both Toeppen cases whether the Act applies to such cyber-pirates where the hostage domain name is being used to identify a Web site which does not actually offer any goods or services. In both the "Panavision" and the "Intermatic" cases though, the court found that Toeppen’s plan to resell the domain name back to the trademark holder constituted a sufficiently "commercial" use to come within the prohibitions of the Dilution Act.

There are at least three ways that you can protect your mark on the Internet and avoid or oust cybersquatters:

1. The first and most important thing to do is to contact NSI to register the domain name for any and all trademarks and service marks that your company holds and/or applies for registration of, and for which you might ever want to establish a separate Web site, or a subsection within your company’s larger Web site. Some companies have registered domain names not only for their corporate names, but for all of their individual product lines. Kraft Foods Inc., for example, has registered velveeta.com and parkay.com. If you want to determine the possibility of a conflict over your chosen domain name, there are a number of firms which, for a fee, will search the Web for any unauthorized uses of your trademark.
1. If NSI determines that someone else has already registered a domain name that contains your protected mark, you will need to follow the NSI’s Domain Name Dispute Policy. Pursuant to that policy, you may ask NSI to have your requested domain name placed on "hold" pending a resolution of the dispute between you and the cybersquatter—the unauthorized prior registrant. You will first have to send the prior registrant a letter identifying your claim to the protected mark and informing it that its registration of that domain name is in violation of your trademark rights. Then, assuming that does not achieve the desired effect, you must notify NSI and send it a certified copy of your federal or foreign trademark registration. NSI will then ask that the prior registrant prove that it has a right to use the mark. The cybersquatter then has three options: submit proof of its own registration for the challenged mark, agree to obtain a new domain name, or file a lawsuit to maintain the domain name. However, some cybersquatters simply refuse to respond to the NSI at all. If the cybersquatter does anything than peacefully vacate and voluntarily obtain a new domain name, the NSI will simply place a pox on both houses, placing the challenged domain name on "hold" and temporarily preventing its use by either the holder of the mark or the prior registrant (or anyone else). Once placed on hold, NSI will not permit use of the domain name until NSI receives a formal state or federal court order ruling that one of the parties is entitled to the domain name, or some other indication that the parties have resolved their dispute.
1. If Steps 1 or 2 are not sufficient to protect your mark, litigation of the type described above may be necessary. At least with cases like Panavision, Intermatic, and Candyland on the books, trademark and service mark holders can now demonstrate to pirates and other cybersquatters that the courts will protect trademark rights on the Internet.

Neal H. Klausner is a partner at Davis & Gilbert, where he specializes in intellectual property and general commercial litigation. Andrew D. Herz is an associate at Davis & Gilbert, where he specializes in new media matters and general commercial litigation.

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