Trademarks consist of words, logos, symbols, slogans, and other devices that are used to signify the origin and authenticity of a good or service to the public. Established trademarks symbolize the quality of the goods or services they are associated with, and enable consumers to make effective and reliable buying decisions. For example, the circular black, blue, and white emblems attached to both ends of motor vehicles manufactured by Bavarian Motor Works (BMW) represent a familiar trademark that has come to signify meticulous craftsmanship to many consumers. However, the federal Trademark Act only protects marks that are distinctive and not merely generic. 15 U.S.C.A. sections 1051 et seq. Once a mark is sufficiently distinctive, competitors are prohibited from luring customers away from each other by using confusingly similar marks in commerce. Competitors are also prohibited from using marks that dilute or tarnish the value of another’s mark in commerce.
Most Internet trademark litigation has revolved around domain name disputes. A domain name is the portion of a URL that follows the “http://www” prefix. A domain name can be reserved for use on the Internet by registering it with any one of several registrars that are accredited by the Internet Corporation for Assigned Names and Numbers (ICANN). Domain-name litigation typically arises when a business that has invested heavily in developing good will for a famous trademark is thwarted from using that mark for its Web site by a so-called “cybersquatter.” Cybersquatters are individuals who intentionally reserve a third-party’s trademark as a domain name for the purpose of selling it back to the owner for a profit.
A leading case on this issue is Panavision Intern., L.P. v. Toeppen, 141 F.3d 1316 (9th Cir. 1998), in which the defendant was sued after reserving approximately 240 domain names that were extremely similar to the trademarks of famous commercial entities, including “deltaairlines.com,” “britishairways.com,” “crateandbarrel.com,” and “ussteel.com.” One of the commercial entities sued the defendant. The defendant admitted he had no intention of ever using the marks to sell goods or services, and thus the plaintiff could not claim that consumers were likely to be confused by the similar names. Instead, the court found that the defendant diluted the plaintiff’s trademark by curtailing the exploitation of its value on the Internet.
A year later Congress codified the rights of Trademark owners against cybersquatters, passing the Anti-Cybersquatting Act of 1999 (ACPA). The Intellectual Property and Communications Omnibus Reform Act of 1999, PL 106-113, 113 Stat 1501 (November 29, 1999). ACPA imposes civil liability upon defendants who have registered, trafficked in, or used a domain name that is identical to or confusingly similar to a trademark owned by the plaintiff, so long as the mark is distinctive and the defendant acted with a bad faith intent to profit from the plaintiff’s mark. Bad faith can be shown in a number of ways, including a pattern of registering widely known trademarks as domain names to divert Internet users from the trademark owner’s Web site. 15 U.S.C.A. section 1125(d). The law empowers courts to dispose of a domain name when the owner cannot be found or served with a summons and complaint in the United States.