Anti Cybersquatting Consumer Protection Act

Introduction

On November 2, 1999, President Clinton signed into law the Anti Cybersquatting Consumer Protection Act ("Act"). This Act is aimed at so called "cybersquatters" who register well-known marks and names of others as Internet domain names for the sole purpose of negotiating payments from the trademark or other rightful owner of the name or mark. There have been cases where individuals or organizations have registered multiple domain names with the idea of selling them to the highest bidder. This practice has led to much criticism and the resulting federal legislation.

New Cause of Action Against Cybersquatters

The Act creates a new cause of action under section 43(d) of the Lanham Act, 15 U.S.C. § 1125(d) for owners of trademarks including protected personal names. Rightful owners of trademarks or personal names may now bring an action against anyone who, with a bad faith intent to profit, registers, traffics in, or uses a domain name that: (1) is identical or confusingly similar to a mark that was distinctive when the domain name was registered; or (2) is identical or confusingly similar to or dilutive of a mark that was famous when the domain name was registered.

The Act provides for civil remedies without the need to demonstrate a similarity or likelihood of confusion between the goods or services of the parties.

Factors Used to Determine "Bad Faith"

There are a number of factors that will be used to determine "bad faith" under the Act including whether the name is the registrant's legal name, whether the registrant intended to divert consumers, and whether the registrant had offered to sell the domain name to the mark owner and was "warehousing" multiple names that were identical to the trademarks of others. Nonexclusive factors for determining bad faith include:

• Intellectual property rights of the person in the domain name;
• Whether the domain name is the name of the person;
• Prior, bona fide use by the person;
• Noncommercial and fair use of a mark in the site by the person;
• The person's intent to divert consumers from the mark owner's online location to another site;
• The person's offer to sell the domain name to the mark owner, without having used or an intent to use it in a bona fide manner;
• The persons provision of material and misleading contact information or the intentional failure to maintain accurate contact information in the registry;
• The person's registration or acquisition of multiple domain names that are identical or similar to the trademark;
• The extent of the mark's fame or distinctiveness.

Damages

Damages under the Act include injunctive relief, the defendant's profits, actual damages and costs, or statutory damages ranging from $1,000 to $100,000 per domain name. The Act specifically allows a court to order the forfeiture, cancellation, or transfer of the domain name. Domain name registries such as Network Solutions and the Internet Corporation for Assigned Names and Numbers (ICANN) are specifically protected from liability when they cancel or transfer a domain name pursuant to a court order.

Jurisdiction

An action can be brought against the domain name itself rather than just the offending cybersquatter. The Act applies to all domain names, no matter when it was registered, but one can seek damages for domain names registered after November 2, 1999.

Further Study

The Act specifically directs the Secretary of Commerce, in consultation with the Patent and Trademark Office and the Federal Election Commission, to conduct a study, and in collaboration with ICANN to develop guidelines and procedures for resolving disputes involving the registration or use by a person of a domain name that includes the personal name of another person, in whole or in part, or a name confusingly similar to such personal name.