Is your business domain at risk?

06 Oct Is your business domain at risk?

What obligation does a trade owner have to purchase all relevant domain names and misspellings pertaining to its trademark? If the trademark owner does not register all the variations, are they free for the taking? Who has rights to domain names pertaining to defunct businesses?
These are questions posed by a reader regarding domains in his portfolio. Although each case turns on its own facts, the following principles can be used as guidelines with respect to whether a domain name is at risk and could be attacked by a trademark owner.
• The more famous the trademark, the wider the berth of protection. An internet user seeing a domain name with Coca-Cola in it is likely to assume that the content on the website is associated with the owner of this famous brand name. Domain names that include Coca-Cola are thus prone to attack. This is especially true if the Coca-Cola domain name is repeated in the content of the site (like “Welcome to coca-colaamericandrink.com”) and/or the content consists solely of advertisements, many or most of which are geared toward Coca-Cola.
The domain name in this context also may also be determined to be diluting the distinctiveness of the particular brand. The domain is vulnerable to attack under theories of trademark infringement, unfair competition, dilution, and cybersquatting.
• Be vigilant on trademarks that are “words” in the dictionary. Of course, many trademarks, even those that are registered, are words from the dictionary, like “blackberry.” The words may also be registered as trademarks by many different people, for a wide variety of goods and services. They can coexist because they are in different markets.
However, if the content on a website featuring a registered trademark in the domain name is geared toward one particular trademark owner (like ads for PDAs under a blackberrypda.com domain name), then consumers are likely to be confused into believing that there is an affiliation between the website and that trademark owner. So again, the domain owner may face claims.
• Trademark owners sometimes fail to register all variations. Many trademark owners register domain names for obvious variations of their marks, including: registering numerous top-level extensions (trademark.com, .net., .org., .info, etc.); registering domains with hyphens between words or syllables (trade-mark.com); adding other common words (trademarkusa.com, trademarkregistrations.com). It is virtually impossible to register everything that an Internet user might type in when looking for a site. No law requires that the trademark owner register any domain names, much less hundreds or thousands of them.
• When trademark owners fail to take reasonable action against cyber squatters, they jeopardize their rights. The trademark law requires that owners be reasonably vigilant in protecting their rights against unauthorized and infringing uses. Trademarks are symbols of goodwill for the owner, signifying a particular level of quality of the goods and services sold under them. The trademark law is designed to protect consumers from confusion, and if multiple unrelated parties are using the same mark for the same goods and services, then consumers cannot rely on the trademark as signifying a single source.
The mark is deemed to have lost its distinctiveness. The law, however, does not require that the trademark owner take action against every unauthorized user. So long as reasonable actions are taken to protect consumers from confusion, the mark continues to serve to distinguish the goods and services from others. Under these circumstances, the mark is valid and enforceable against cybersquatters.
• Defunct businesses lose their domains. Trademarks can often be sold by one business to another, so sometimes it can be difficult to determine whether the rights are still in existence, even if the business appears to be defunct. A presumption arises that a trademark has been abandoned when there has been no use of it for three years, and the trademark owner has no intent to resume use.
Typically, if the business goes under and no one buys up the assets, including the trademark, then the trademark goes back into the pool of marks available for anyone else to adopt and own. In some circumstances, there can be “residual goodwill” that the original trademark owner may be able to protect even after use of the trademark ceases, but such situations are rare.
In short, it is advisable to run trademark searches for any domain names (which are often also displayed in the content of the website) to determine if they are available for use in connection with advertising of various goods and services.
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