Tim’s Q: Company XYZ has requested that I transfer to them a domain that is similar to their company name (x-y-z.com) because it infringes on their “trademark”. I have taken down the site to avoid any problem but they also request I transfer the domain to them (not clear who pays any transfer fees). I find no record of a registered trademark nor does their site indicate in any way that the name is a “trademark”. Does a common law trademark give give them such rights to a domain name I own because it happens to be the name of their company?
Applicable statutes are 15 USC 1114 and 1125 as well as any state commercial code and any state consumer protection act.
15 USC 1114 states, in part, that any person who shall use in commerce any colorable imitation of a registered mark in connection with the sale, offering for sale, distribution, or advertising of any goods or services on or in connection with which such use is likely to cause confusion, or to cause mistake, or to deceive shall be liable in a civil action by the registrant. The registrant shall not be entitled to recover profits or damages unless the acts have been committed with knowledge that such imitation is intended to be used to cause confusion, or to cause mistake, or to deceive.
15 USC 1125 states, in part, that any person who uses in commerce any word, term, name, symbol, or device, or any combination thereof, which is likely to cause confusion or mistake, or to deceive as to the affiliation, connection, or association of such person with another person shall be liable in a civil action by any person who believes that he or she is or is likely to be damaged by such act. Furthermore, the owner of a famous mark shall be entitled, subject to the principles of equity and upon such terms as the court deems reasonable, to an injunction against another person’s commercial use in commerce of a mark or trade name, if such use begins after the mark has become famous and causes dilution of the distinctive quality of the mark, and to obtain such other relief as is provided.
In assessing the rights to a particular domain name, give consideration first to whether the domain name is involved with a distinctive and famous mark. 15 USC 1125 considers factors such as:
(A) the degree of inherent or acquired distinctiveness of the mark;
(B) the duration and extent of use of the mark in connection with the goods or services with which the mark is used;
(C) the duration and extent of advertising and publicity of the mark;
(D) the geographical extent of the trading area in which the mark is used;
(E) the channels of trade for the goods or services with which the mark is used;
(F) the degree of recognition of the mark in the trading areas and channels of trade used by the marks’ owner and the person against whom the injunction is sought;
(G) the nature and extent of use of the same or similar marks by third parties; and
(H) whether the mark was registered under the Act of March 3, 1881, or the Act of February 20, 1905, or on the principal register.
If the court finds that rights do not exist in the domain name, the owner of the famous mark shall be entitled to injunctive relief (meaning discontinuing the use; forfeiture or cancellation of the domain name; or transfer of the domain name to the owner of the mark) unless there is willful intent to trade on the owner’s reputation or to cause dilution of the famous mark. If such willful intent is proven, the owner of the famous mark shall also be entitled to the remedies set forth in sections 1117 (a) and 1118 of this title, subject to the discretion of the court and the principles of equity.
Furthermore, there is a special provision referring to domain names and bad faith in registering them. If the court finds bad faith intent to profit from the mark and the person uses a domain name that in the case of a mark that is distinctive at the time of registration of the domain name, is identical or confusingly similar to or dilutive of that mark, then that person can lose profits and pay damages as well as costs of the action. In determining whether a person has a bad faith intent described under subparagraph, a court may consider factors such as:
(I) the trademark or other intellectual property rights of the person, if any, in the domain name;
(II) the extent to which the domain name consists of the legal name of the person or a name that is otherwise commonly used to identify that person;
(III) the person’s prior use, if any, of the domain name in connection with the bona fide offering of any goods or services;
(IV) the person’s bona fide noncommercial or fair use of the mark in a site accessible under the domain name;
(V) the person’s intent to divert consumers from the mark owner’s online location to a site accessible under the domain name that could harm the goodwill represented by the mark, either for commercial gain or with the intent to tarnish or disparage the mark, by creating a likelihood of confusion as to the source, sponsorship, affiliation, or endorsement of the site;
(VI) the person’s offer to transfer, sell, or otherwise assign the domain name to the mark owner or any third party for financial gain without having used, or having an intent to use, the domain name in the bona fide offering of any goods or services, or the person’s prior conduct indicating a pattern of such conduct;
(VII) the person’s provision of material and misleading false contact information when applying for the registration of the domain name, the person’s intentional failure to maintain accurate contact information, or the person’s prior conduct indicating a pattern of such conduct;
(VIII) the person’s registration or acquisition of multiple domain names which the person knows are identical or confusingly similar to marks of others that are distinctive at the time of registration of such domain names, or dilutive of famous marks of others that are famous at the time of registration of such domain names, without regard to the goods or services of the parties; and
(IX) the extent to which the mark incorporated in the person’s domain name registration is or is not distinctive and famous.
However, if the court determines that the person believed and had reasonable grounds to believe that the use of the domain name was a fair use or otherwise lawful, there can be no finding of bad faith; and the ownership of a valid registration shall be a complete bar to an action. Furthermore, if a domain name owner is wrongly accused, section 1114 provides the person making the knowing and material misrepresentation shall be liable for any damages, including costs and attorney’s fees, incurred by the domain name registrant as a result of such action. The court may also grant injunctive relief to the domain name registrant, including the reactivation of the domain name or the transfer of the domain name to the domain name registrant. A domain name registrant whose domain name has been suspended, disabled, or transferred may, upon notice to the mark owner, file a civil action to establish that the registration or use of the domain name by such registrant is not unlawful under this Act.
In making your analysis, consider the case of Dell v Terrashare LLC, in which Dell sued various owners of numerous domain names that were similar to its own, such as dell4sale.com, dellbusiness.com, dellcomp.com, etc.. The suit was based in part upon trademark infringement and Dell won. The court’s assessment was based upon a number of factors including but not limited to Dell’s presence in the economy; the fact that Dell had registered its trademark, DELL and variations of the mark; Dell’s investment in marketing under the trademark name through a number of websites and hundreds of related domain names such as dell.com, dell4me.com, dellcomputer.com, dellcomputers.com, etc.; and the number of customers that visit Dell websites annually and the amount of revenue from the visits. Also important in the assessment was the fact that the defendants had registered and used the domains with full knowledge, and in willful disregard of Dell’s DELL Marks, and with the intent to obtain a commercial advantage that the defendants otherwise would not have had. The court found that the defendants had used the domains to redirect consumers looking for Dell websites, but who type an incorrect domain name or make a typographical or spelling error, to websites controlled by the defendants. Consumers reached the defendants’ domains by mistake and but for their registrations and use of the domains, those consumers would not reach any active website; would realize they had made an error, retype the domain name they intended to reach, and arrive at the Dell websites directly.
The court called the defendants’ domain names, “colorable imitations, simulations or typographical variations thereof” and found them to be “identical or confusingly similar to, or dilutive of and likely to dilute the famous DELL Marks.” Because the domains were confusingly similar to Dell’s DELL Marks and no one other than Dell had the right to use them, Dell could have been (and would have been entitled to) register them and ensure that consumers who type the domains into their browser were redirected to and reached a Dell website.