"Cybersquatting" is the practice of registering well-known brand names of
existing businesses or organizations as Internet domain names with the
intent to profit by selling the domain names back to the rightful owners of
the trademarks when they seek to engage in e-commerce. The cybersquatter
has a strong upper hand in the negotiation process, since she can hold the
name indefinitely merely by paying a nominal annual fee to the domain name
registrar.
During the early and mid- 90s, those who foresaw the promise of the Internet
in its early stages beat many corporations and businesses that lacked such
vision to market by registering their trademarked names. Disgruntled that
their trademarks were being held for ransom, and unwilling to pay ludicrous
sums of money for the rights to domain names that they deemed were
rightfully theirs, several businesses sued under existing trademark laws.
The courts grappled with the issue of cybersquatting for a few years, and
then Congress attempted to deter it altogether through federal law. In
November 1999, President Clinton signed the Anticybersquatting Consumer
Protection Act (ACPA, codified at 15 U.S.C. ¤1125(d)). It imposes civil
liability of up to $100,000 in statutory damages for anyone who, with a
bad-faith intent to profit, "registers, traffics in or uses a domain name
that is identical to, confusingly similar or dilutive of" an existing
trademark or personal name. Although court decisions have provided some
guidance to the applicability and scope of the ACPA, some questions and
concerns still remain.
One main concern about the ACPA is that it may result in the infringement of
First Amendment rights of free speech, by prohibiting dissatisfied customers
from launching websites under parody domain names. Many companies actively
seek to prevent this by purchasing parody domain names at the time they
register their trademark domain names. Thus, company XYZ will register
XYZ.com, as well as dontsupportXYZ.com, XYZstinks.com, etc. At times,
however, a company attempting to buy its parody domain name learns, much to
its chagrin, that the name has already been registered by another party.
This often results in the party who owns the name receiving a nasty "cease
and desist" letter from the companyŐs legal counsel, threatening to sue
under the ACPA if the domain name is not relinquished immediately.
Effectively, the company is claiming that the ACPA prohibits a person from
voicing her criticism of the company at certain Internet addresses. Given
that the Internet is open to the public and opinions are generally welcomed
on message boards, chat rooms and personal websites, this seems somewhat
akin to telling a protestor that it is illegal to write "XYZ stinks" on a
placard and stand on a public street waving it around for anyone who is
interested to see.
How does the ACPA handle a situation like this? The language is a little
muddy. ¤1125(d)(1)(B)(VI) states that one factor in determining whether the
defendant had a bad-faith intent is "the personŐs intent to divert consumers
from the mark ownerŐs online location to a site accessible under the domain
name that could harm the goodwill represented by the mark, either for
commercial gain or with the intent to tarnish or disparage the mark, by
creating a likelihood of confusion as to the source, sponsorship,
affiliation, or endorsement of the site." The language seems to suggest
that the intent to tarnish the mark must be coupled with the likelihood of
confusion about who is providing the information. Thus, XYZ would likely
have to convince the court that a person surfing the web who directs her
browser to XYZstinks.com might be confused about whether the information to
be found at the site is provided or endorsed by XYZ, or by some other party.
At this juncture, it has been established that the registering of domain
names that are intentional misspellings of distinctive or famous names
constitutes unlawful conduct under the ACPA, since a surfer may not be aware
of the misspelling and hence believe that she is at the site operated by the
mark owner. However, no court has yet grappled directly with the parody
issue, probably because most parties registering a parody domain name have
limited resources to fund litigation, and hence have succumbed to cease and
desist demands. [Note, however, that a case involving a parody domain name
has survived summary judgment.] Nonetheless, the answer as to where the
line is to be drawn between freedom of speech and ACPA prohibitions may yet
be forthcoming. Since learning that 2600 Magazine registered the domain
name "verizonreallysucks.com," Verizon Communications has pressured the
magazine to relinquish ownership. To date, 2600 Magazine has not caved in
to VerizonŐs demands or threats of litigation, and continues to maintain a
website at the parody domain name. Should this conflict lead to
litigation, the First Amendment will likely be resorted to as a defense of
the right to own parody domain names. However, until such a case is
litigated to its end, a pressing question of free speech on the Internet
remains.
