by Richard Keyt, Domain Name Law attorney
I’ve Got to Have THAT Domain Name
You have an idea for an online business and to your surprise, the domain name that you want is available. You register the domain name, spend a lot of time and money to create a killer web site and open for business on the internet. Business is good and prospects are even better until one day you receive a certified mail letter from the lawyer for XYZ, Inc., notifying you that: (i) your domain name infringes on XYZ’s federally registered trademark, (ii) you must immediately cease and desist from using the domain name and all references to the trademark, (iii) you transfer the offending domain name to XYZ, and (iv) you pay XYZ damages equal to all the profits made by your online business.
What Are the Dangers of Trademark Infringement Involving a Domain Name?
Unfortunately, the above scenario occurs far too often to domain name owners. The cease and desist letter has the practical affect of being an invoice for $25,000 to $50,00 or more to defend the trademark infringement lawsuit in XYZ’s home state that may follow the letter. The cease and desist letter alleging trademark infringement must be taken very seriously. Because trademark owners have a duty to protect their marks and to take appropriate action to prevent others from infringing their marks, more often than not the trademark owner who sends a cease and desist letter intends to follow it with an infringement lawsuit unless the alleged infringer concedes to the trademark owner’s demands.
If you obtain a domain name that is identical or similar to a trademark or service mark that you do not own, you may be the defendant in a lawsuit brought under the Anticybersquatting Consumer Protection Act or an arbitration procedure brought under ICANN’s Uniform Dispute Resolution Policy. Defending a cybersquatting lawsuit or UDRP arbitration can be very expensive, especially if you lose. The good news, however, is that there are steps you can take before acquiring a domain name to reduce and possibly eliminate the risk of trademark infringement arising from your use of a domain name.
How Can I Avoid Acquiring a Domain Name that Infringes a Trademark?
A prospective domain name owner can eliminate or substantially reduce the risk that a desired domain name will infringe on a trademark or service mark by doing proper due diligence before investing the time and money in registering or buying the domain name. You should NEVER register or purchase a domain name without first investigating to determine if the desired domain name is identical or similar to an existing trademark or service mark. The following is a list of the things you can and should do before you acquire a domain name to investigate possible trademark infringement problems.
Due Diligence Step 1: Do a search on several popular search engines (such as Google) to determine if the desired domain name is being used as a business trade name or the name of any goods or services. Review all hits/links that look like they could contain your desired domain name used as a business name (trade name) or the name of goods or services. If you find a business or any goods or services that are identical or similar to your desired domain name, you should probably seek another domain name.
Due Diligence Step 2: Do a search at Whois.net to see if there are any domain names that use domain names that are identical or similar to your desired domain name or that contain identical or similar text. Next do a Google search for the desired domain name. Look for any hits that contain the owner’s trademark. If your search results finds any hits, examine each web site and the “whois” record of each. If you find a trade name or any goods or services that use your desired domain name, you should probably seek another domain name.
Due Diligence Step 3: Do a search of the United States Patent & Trademark Office database called the Trademark Electronic Search System (TESS). TESS contains all federally registered trademarks and services marks; all previously filed, but dead or abandoned trademarks and service marks; and all pending applications for trademark registration. TESS contains over 3 million pending, registered and dead federal trademarks. Important Limitation on TESS Searches: Because TESS has a short lag period from the time a trademark application is filed until the data from the filing appears in the USPTO’s database, you should do another search a few weeks later to make sure that no trademark applications were filed between the time of your first search and the period it takes the USPTO to post all trademark application data received through the date of your first search.
Due Diligence Step 4: Hire a reputable search firm to do a national trademark, service mark, trade name and domain name search for you. A good search by a capable search firm will do a comprehensive search of these four important categories and give you a written report of the results. One of the most used national trademark search firms is Thomson & Thomson. The search costs approximately $400. If the search results show that there are any identical or similar trademarks, service marks, trade names or domain names, you should seriously consider eliminating the domain name and seeking another.
Due Diligence Step 5: Hire a trademark attorney to perform steps 1 – 4 for you. Being a trademark attorney, I, of course, highly recommend that you skip steps 1 – 4 and let your trademark attorney do it. The reason to hire a trademark attorney to perform your due diligence is because frequently the question of whether a possible domain name will infringe on another person’s trademark is not obvious when applying the general rules stated above and it requires knowledge and interpretation of trademark law. It is possible that in some cases a desired domain name will not infringe on another trademark or service mark even if steps 1 – 4 all find identical or similar marks. Whether there is an infringement problem depends on the facts and circumstances of each potential domain name.
Why Should I Hire a Trademark Attorney to Review My Prospective Domain Name for Trademark Infringement?
If you acquire a domain name that infringes on another person’s trademark or service mark, you could be sued for trademark infringement or you might lose the domain name in an ICANN UDRP proceeding. Defending either can be very expensive, not to mention how expensive it would be to actually lose a lawsuit for damages and/or lose a domain name that you have nurtured and built up goodwill over time. The answer to the question “does the domain name infringe on another person’s trademark or service mark” is really a question that should be answered by a trademark attorney rather than a lay person. Ask yourself this question: Is it prudent to send money (perhaps tens or hundreds of thousands of dollars) to build an online business or web site and build a lot of goodwill only to be sued for trademark infringement and be liable to surrender the domain name and pay damages when it all could be avoided by consulting a trademark attorney before acquiring the domain name? The relatively small upfront investment in a trademark lawyer could prevent you from having a very large legal bill defending a trademark infringement lawsuit.
Can You Give Me a Step-by-Step Example of the Due Diligence Process?
Assume I want to sell tuna fish on the internet. I want my domain name to be www.whitetuna.com. Will I infringe on a trademark or service mark if I acquire whitetuna.com, whitetuna.net or whitetuna.org? The following due diligence example was done a long time ago, but the principles important, not the date of the searches.
Due Diligence Step 1: I did a Google search (my favorite search engine because it has indexed more than 1.3 billion web pages) on April 22, 2001, for the words “white tuna,” which resulted in 2,650 hits. One of the first hits took me to a web page where Port Perry IGA was selling “Oceans Flaked White Tuna” for $2.59. Because I found a product using the same text as my desired domain name, it’s one big strike against acquiring my desired domain name, especially considering I want to sell white tuna, which is what Port Perry IGA is doing. I should probably eliminate whitetuna.com at this point and find something else.
Due Diligence Step 2: I went to Whois.net on April 22, 2001, and did a search for “whitetuna.” Whois.net searched 31,423,209 domain names found one web site that contained my text string. The existing web site is www.whitetuna.com. I clicked on the “whois record” and found information about the registrant of whitetuna.com and also found that the domain name was created on May 18, 2000. When I tried to access the web site, I got an error message rather than finding a working web site. Now I know that I cannot get whitetuna.com, but whitetuna.net and whitetuna.org are both available. I’m also now alerted to the fact that somebody else has an interest in the same domain name I wanted. This fact should put me on notice that perhaps I might have a problem with whitetuna.net and whitetuna.org. I also did a search for tuna, but Whois.net found more than 2,000 domain names containing the text “tuna.”
Due Diligence Step 3: I went to TESS and did a search for the phrase “white tuna” and found one hit for a trademark registered in 1991 for the word mark “PALACIO DE ORIENTE WHITE TUNA SOLID PACK IN OLIVE OIL.” I now know that there is an existing federally registered trade mark that contains the exact words as my desired domain name. The trademark is registered in international class 29 and U.S. class 46. The goods and services are canned fish and the first use in commerce occurred in 1978. The mark was registered in 1991 and is on the principal register. In general, if you find a federal trademark or service mark that is identical or similar to your desired domain name, you should not use it and should find something else, but there are exceptions.
Due Diligence Step 4: Because this is only an example, I did not spend $400 to purchase a Thomson & Thomson search.
Due Diligence Step 5: Although due diligence steps 1 – 3 each found adverse facts that suggest I should not use whitetuna.net or whitetuna .org for my domain name, I have a good legal argument that my use of either domain name to sell tuna on the internet would not infringe on a trademark. Certainly the trademark “white tuna” when applied to a web site selling tuna is descriptive. I would argue that white tuna when used to describe goods that are tuna is generic. Generic marks are not capable of trademark registration or protection under U.S. trademark laws. Despite the good chance that using whitetuna.net or whitetuna.org may not infringe another person’s trademark, my recommendation is to find a different domain name. I know there is a registered federal trademark that contains my desired domain name, which means there is a risk that I could be sued by the trademark owner. If sued, I might be able to prevail, but it could cost me $20,000 or more to defend the lawsuit. Therefore, it is best to eliminate the risk of a possible lawsuit and find a different domain name that will not subject me to the risk of being sued.
If I Follow All Five Due Diligence Steps Above, Does it Guaranty that My Domain Name will Not Infringe on Another Person’s Trademark or Service Mark?
No. Trademark attorneys do not guaranty that your domain name will not infringe on another person’s trademark or service mark. They analyze the facts and circumstances and give an educated opinion, but not a guaranty. By following all five due diligence steps, you should be able to identify any obvious trademark infringement problems and if so, find a different domain name.