The Urban Layers Project

Have you ever had a third party register a domain name that is either exactly the same or very similar to your trademark? If so, it may be a Cybersquatting issue. Cybersquatting is registering, trafficking in, or using a domain name with a bad-faith intent to profit from the goodwill of a trademark belonging to someone else. To address this issue, Congress enacted what is known as the Anticybersquatting Consumer Protection Act ("ACPA"). The ACPA amended the Lanham Act by providing trademark owners with a civil remedy against cybersquatting.

If you're not sure how this may affect your business, let's run through some examples. The typical scenario is that the name of your product, or your company name is a registered trademark (or a strong common law trademark). However, you failed to register the domain name for whatever reason. Joe Schmo cybersquatter decides to beat you to the punch and registers the domain name of your trademark. He may have even registered plural versions or misspellings of your trademark as well (this is known as typosquatting). Joe Schmo cybersquatter is simply holding the domain name for ransom hoping to sell it back to you for a nice profit, or he may decide to keep domain name knowing that he will get a lot of traffic to his websites. The cybersquatter may sell products similar to yours or is simply engaged in affiliate marketing and makes money off of the clicks on his website. These situations can obviously cause consumer confusion and can easily cause lost profits to your company and dilution of your trademark(s) as well.

One avenue of recourse is filing an ACPA claim in federal court. The Plaintiff in an Anti-Cybersquatting suit must establish:

1. The Defendant has a bad faith intent to profit from the mark, including a defendant name which is protected as a mark;
2. 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 18 U.S.C. § 706 (the Red Cross, the American National Red Cross or the Geneva cross) or 36 U.S.C. § 220506

It's important to distinguish cases in which the cybersquatter is obviously acting in bad faith, from situations in which the individual simply registered the domain name with the intent of doing something else with it that is unrelated to trademark owner's goods and/or services.

The ACPA excludes a finding of bad faith where the domain name holder reasonably believed that the use was "fair use" or otherwise lawful. Accordingly, bad faith is the biggest component in an ACPA claim. So what is bad faith? There are several elements the federal courts will consider such as:

The trademark ownership rights held by the mark owner;
The closeness of the domain name and the cybersquatter's name;
The cybersquatter's commercial use of the domain name for access to a web site;
The cybersquatter's intent to divert web traffic from the mark owner;
The cybersquatter's offer to sell the domain name to the mark owner;
Whether the cybersquatter gave misleading information in registering the domain name; and
Similar or repeated cybersquatting on other marks.

For example, in Hasbro Inc. v. Clue Computing Inc. [66 F. Supp.2d 177 (D. Mass 2000)], the district court held that Clue Computing's use of its registered domain name clue.com, was in fair use, despite Hasbro's existing registration of the trademark "Clue" for its famous board game. The two company's fields in which the names were used were not related; Clue Computing had registered the disputed domain name first, used it in legitimate commerce, and not attempted to sell the domain name to Hasbro.

UDRP or ACPA?

So if you've concluded that someone has cybersquatted one of your trademarks, should you file a ACPA lawsuit? Before doing so, you should consult with your intellectual property attorney about other avenues such as the Uniform Domain Name Dispute Resolution Policy ("UDRP"). UDPR is an ICANN-approved arbitration that resolves domain name disputes submitted to ICANN for resolution. Very often (nearly 75% of UDRP cases) results in the cancellation of the cybersquatter's domain name registration. The standards to establish cybersquatting in UDRP cases for wrongful registration is very similar to ACPA's standards. Furthermore, UDRP proceedings are typically much less expensive and quicker (about 2-3 months total compared to ACPA which is federal litigation and may take years if not settled before trial). Another advantage with the UDRP is that it's well suited for international domain name disputes because the hearings are ex parte (based only on filed documents; no witnesses or parties are present). UDRP can be used in addition to an ACPA litigation or possibly done before or after an ACPA ruling because UDRP rulings are not binding upon the courts. Also, UDRP findings may be appealed. This is a departure from most arbitration practice (www.icann.org/udrp).

However, the remedies in UDRP proceedings are limited to only transfers of the domain name. Compared to an ACPA litigation, the Plaintiff may obtain monetary damages, attorney's fees and costs (in exceptional cases), and/or an injunction, in addition to the cancellation or transfer of the improper web domain name to the original owner. Furthermore, under ACPA the Plaintiff has the option of suing for statutory damages for $1,000 to $100,000, as the court deems just under the circumstances.

© 2007 Michael N. Cohen, Esq. Mr. Cohen specializes in intellectual property and is a licensed patent attorney in Los Angeles, California. No portion of this article may be copied, retransmitted, reposted, duplicated or otherwise used without the express written approval of the author. Michael Cohen can be reached at 310-288-4500, www.patentlawip.com or www.trademarkattorneyip.com

This article is not intended as a substitute for legal advice. The specific facts that apply to your matter may make the outcome different than would be anticipated by you. You should consult with an attorney familiar with the issues and the laws.

How do most people select their attorney? Probably by word of mouth. Or maybe they have a family member or friend who practices law. This may be a good method in some instances. But what if you don't know anyone who has used a lawyer, and can you really have confidence in the qualifications of your cousin Vinnie? What if there was a rating system that gave lawyers a numerical rating computed on various factors? Well on June 5th a company just launched a website service that does just that.

The company is called Avvo and their service compiles data from state bar associations and other sources and tries to compute a numeric score between 1 and 10 for nearly every attorney in the country. Avvo was co-founded by Mark Britton, an attorney for 15 years and formerly the top lawyer at Expedia.com. He partnered with Paul Bloom, a veteran of Microsoft's Consumer Division, and they assembled a team with expertise in law, consumer products, and technology to develop their product.

From the Avvo website, the company's principles are set forth as follows:

At Avvo, our mission is to help people navigate the complex and confusing legal industry. Choosing a lawyer is an incredibly important decision—yet most people have no idea how to go about doing it, and resources to guide them are scarce.

Avvo is guided by two basic principles:

The Avvo Rating is our assessment of how well a lawyer could handle your legal issue. It is based on data we have collected about hundreds of thousands of lawyers - including their number of years in practice, disciplinary sanctions, and professional achievements. The data comes from multiple sources, including state bar associations, court records, lawyer websites, and information lawyers provide to Avvo. We have created a mathematical model that considers this information and calculates a score on a ten-point scale. The result is called the Avvo Rating.

What has been lawyers' reaction to the Avvo rating system? Well, you might have guessed it - a class action suit. On June 14th, a Seattle attorney by the name of Steve W. Berman, a managing partner at Hagens, Berman, Sobol, Shapiro in Seattle, filed a class action lawsuit challenging the Avvo rating system. Apparently some lawyers have complained that their Avvo rating is arbitrary, and that the Avvo system in some instances gave convicted felons higher numeric scores than law school deans. Berman's firm has a history of filing class action lawsuits against technology companies. It's gone after Apple for its iPod (allegedly too loud), eBay (allegedly a monopoly), Expedia (allegedly too expensive), and Apple, again, for the iPod Nano (allegedly too scratch-prone).

The mathematical model used to compute the Avvo rating may or may not be flawed. And in some instances some lawyers may object to their rating. But I can't think for the life of me what the plaintiffs' theory of recovery in the class action would be. I suppose it would be something along the following:

I am a lawyer, and because I am a lawyer I and am not allowed to be rated by any service whether that service is based on a mathematical model of available data or otherwise. Lawyers cannot be rated on a numerical basis, and consumers are incapable in evaluating whether a particular rating system provides them with meaningful information. Such a rating system inherently provides consumers with misleading information, and since I am a lawyer, if I don't like my rating I am irreparably harmed, and I can recovery monetary damages from whomever created the rating.

It's an interesting theory of recovery. But nearly every category of product or service that I can think of I receives ratings in one form or another. Should Zagat's be careful when it provides numerical ratings for a restaurant's food, service and decor? Should movie critics be concerned when they give a movie 1 and half stars rather than 5 stars? Should the Automobile Association of America - AAA - worry about a class action suit when it gives a group of lodgings two diamonds as opposed to three. Rating systems give consumers valuable information in comparing two different products or services when they lack first hand information about those products or services. Rating services also provide an incentive for firms to provide the highest quality of services possibly. Do lawyers honestly believe that they are so unique, so different, that the services they provide are so different, that they simply cannot be evaluated on a numerical basis? If they do, they are probably not concerned with providing their clients with quality services in the first place. Wouldn't a good lawyer want to be rated?

I believe that what is needed is not less services which rate lawyers, but more. What if there were four or five numerical systems which rated attorneys. Then consumers who don't have a great lawyer in the family would be able to take information from the variety such services, as well as other information, and make the best possible choice. In addition, rating services are particularly important for legal services because lawyers have a monopoly in providing legal services. There is not a totally free market in legal services as the number of those who can provide legal services is restricted by the licensing requirement for lawyers. Only when there is a completely free market are consumers presented with all the information needed to make rational decisions as competing firms have the most incentive to provide that information.

Again, Avvo's rating system may not be perfect, but they should be commended in attempting to provide consumers with an additional method in selecting an attorney. And Mr. Berman's class action suit should be condemned by all lawyers. It should be noted that Mr. Berman's personal rating on the Avvo system achieved a 9.2. I wonder if in the eyes of the public Mr. Berman's rating will increase or decrease by commencing this questionable class action suit.