Domain names are valuable assets. As such, they can be exploited by scammers and maligners alike. Most domain name conflicts are between trademark holders (the companies that actually operate under the “name” at issue) and registrants who buy the domain name and then seek out parties (like the trademark holder) who may be willing to purchase it for a significantly larger sum. Conflicts can also arise between the trademark holder and someone who uses the domain name to damage the holder’s reputation (“cybersquatting”).
Did you know that when you register a domain name, you must represent and warrant that registering that particular name “will not infringe upon or otherwise violate the rights of any third party,” and furthermore, you must agree to an arbitration-type proceeding if any third party asserts such a claim?
The system for settling disputes over domain names is known as the Uniform Domain-Name Dispute-Resolution Policy (UDRP). All domain name registrants are subject to the UDRP’s terms. A domain name holder must submit to a proceeding by an Approved Dispute Resolution Service Provider’s Administration Panel whenever a third party complainant asserts all three of the following:
Even if a complainant proves the first two criteria, the complainant must still show that the domain name holder registered and is using the domain name in bad faith.
The “use” requirement can be challenging to prove because the term is not clearly defined, and many cybersquatters do not actually use the domain names they register. However, the use requirement can be met if the website that appears at the domain name displays ANY information or if the domain name holder attempts to profit off the name, including selling it at a profit.
If the use requirement is satisfied, a complainant must still show a domain name holder’s bad faith. Bad faith can be shown if the domain name’s registration was done primarily: (1) to sell the name to the trademark owner or its competitor; or (2) to prevent the trademark owner from using it in a related domain name and a pattern of this conduct is demonstrated; or (3) to disrupt a competitor’s business; or (4) to generate internet traffic to the registrant’s own website by creating a likelihood of confusion with the complainant’s trademark.
The bad faith allegations can be rebutted by demonstrating legitimate interests in the domain name, such as having used the domain name in connection with offering goods or services, being commonly known by the domain name, or making noncommercial or fair use of the domain name without intent of commercial gain to mislead consumers or taint the trademark at issue.
The remedies available in UDRP proceedings are limited to the cancellation of the domain name or the transfer of the domain name to the complainant, but a party can suspend any impending transfer of a contested domain name by filing a lawsuit and providing documentation of the filing within 10 days of the administrative proceeding.
If you find yourself on either side of a domain name dispute, depending on the nature of the claim, you may be required to submit to a proceeding under the UDRP, but this does not usurp any other legal rights you may have.