A Pirate Looks at the Internet: Cybersquatting, Cyberpiracy And the Anticybersqatting Act

Businesses that have a distinctive name, mark, slogan or logo beware: you may already be a victim of a "cyberpirate" or "cybersquatter" and not know it. However, thanks to a recent law passed by Congress, innocent parties can now seek relief against those who register a business' name, trademark, slogan, or logo as a domain name on the Internet without the true owner's knowledge or consent.

In reaction to the realities of trademark infringement and dilution running rampant on the Internet, Congress enacted the Anticybersqatting Consumer Protection Act ("ACPA") of 1999, 15 U.S.C. § 1125(d), which is an amendment to the Trademark Act. This legislation was adopted in order to address the growing phenomenon of cybersquatting or cyberpiracy, which involves registering, trafficking in, or using domain names that are identical or confusingly similar to trademarks with the intent of profiting from the goodwill of the trademark. The ACPA allows a civil action to be filed against domain names registered before, on or after the date of enactment of the statute.

There are several ways in which a business can be victimized by this modern-day piracy. Typically, a cyberpirate registers a domain name that includes or uses the name, tradename or mark of a business or person, thus precluding that business or individual from using its own tradename or mark as its domain name on the Internet. The cyberpirate then offers to sell the name to the aggrieved entity for a premium, and if the aggrieved party refuses, the cyberpirate may then engage in unsavory or damaging activities linked to the domain name (the most popular being the use of pornography). Obviously, this can result in lost business opportunities for the victim of such piracy.

Even if the entity has registered its own tradename, cyberpirates have found other creative ways to hold up businesses on the Internet. For example, Lucent Technologies recently brought an action under the ACPA against the domain name "lucentsucks.com" in federal court in Virginia. However, if the offensive domain name can be shown to be a parody, then it will not violate the ACPA as there would not be any "likelihood of confusion".

Another tactic used by cyberpirates is to register a domain name that contains a deliberately misspelled tradename, or a name that is not the business' website name, but one that others would assume it to be. Cyberpirates register such domain names under the assumption that an Internet user will attempt to go to a company's website directly by typing in the presumptive (or incorrectly spelled) website address. For example, this firm's website address is "www.mrbr.com"; had this firm not pre-emptively registered other names to itself, a cyberpirate could register www.mcmillanrather.com or some other derivation of the firm's name.

Thus, to protect against this new-age piracy, Congress enacted the ACPA, imposing civil liability on cybersqatters for violations of the statute. The ACPA also provides wide protection to aggrieved parties by allowing a suit to be brought against either the owner of the offensive domain name, or where the owner cannot be found or discerned, against the domain name itself. In addition to an award of monetary damages, if a violation of the ACPA is found, the court can order the forfeiture or cancellation of the offending domain name or the transfer of the domain name to the owner of the mark. The ACPA also permits the aggrieved party to seek an award of its attorney's fees and costs in "exceptional circumstances", which include those instances where there has been a willful infringement of a trademark.

In order to prevail in an action under the ACPA, the aggrieved party must first demonstrate that its name or trademark is distinctive or famous, and thus entitled to protection. Liability is imposed with respect to a "distinctive" mark if the domain name is "identical or confusingly similar." Liability is imposed with respect to a "famous" mark if the domain name is "identical or confusingly similar to or dilutive of that mark." If the aggrieved party can so demonstrate, then it must next show that the cyberpirate acted with bad faith intent to profit from the mark when it registered the allegedly offensive domain name. The ACPA delineates nine "bad faith" factors to assist courts in determining whether a cyberpirate has acted with a bad faith intent; however, the courts can also look at other factors unique to each case in making a "bad faith" determination.

To protect itself from cyberpiracy, businesses should, at a minimum, take two steps. First, a business should register its tradenames and marks as domain names with an entity accredited by the Internet Corporation for Assigned Names and Numbers (ICANN). Second, it should also search the Internet to see whether its name, slogan, mark or logo has already been registered as a domain name and if so, whether the domain name is being used for a legitimate purpose or whether it is being used for a more sinister, and now under the ACPA, illegal purpose.