Cybersquatting is the act of registering domain names, especially those connected with recognizable trademarks, with the intent to resell the domain name at an exaggerated price. Most cybersquatters take advantage of the domain registration companies’ first come/first serve by submitting a list of the most popular words and names all at once. A cybersquatter can literally sit on a domain name for years, paying their fees from the profits of individual domain name resales. The only remedy for the actual trademark owner is to sue the cybersquatter, relinquish the domain name or pay whatever price the current domain name owner demands.
Buying and selling domain names is perfectly legal, until the cybersquatter infringes on a third party’s trademark or begins using the name in “bad faith.” Most domain investors operate within legally-acceptable territory; however, in some cases the domain owner is not aware of the legal constraints, or chooses to ignore them.
Domain Name Disputes
Possession of a trademark for a given term does not automatically mean a legitimate claim exists to a domain name. Possession is only one of three requirements needed to win ownership of a domain name. One must also prove the domain registrant has no legitimate interests in the domain and that they evidenced bad faith in registering the domain name, according to the Uniform Dispute Resolution Policy of ICANN’s, the policy governing ownership of disputes for generic TRLDs (.com, .net, .org, .biz, and .info) and the U.S. Consumer Protection Act 15 U.S.C. §1125.
Under the UDRP, the following is accepted as a valid reason to file complaint.
1. domain name is identical or confusingly similar to a trademark or service mark in which the complainant has rights;
2. you have no rights or legitimate interests in respect of the domain name; and
3. your domain name has been registered and is being used in bad faith.
Under the UDRP, the following shall be evidence of the registration and use of a name in bad faith:
1. circumstances indicating that you have registered or you have acquired the domain name primarily for the purpose of selling, renting or otherwise transferring the domain name registration to the complainant who is the owner of the trademark or service mark or to a competitor of that complainant, for valuable consideration in excess of your documented out-of-pocket costs directly related to the domain name; or
2. you have registered the domain name in order to prevent the owner of the trademark or service mark from reflecting the mark in a corresponding domain name, provided that you have engaged in a pattern of such conduct; or
3. you have registered the domain name primarily for the purpose of disrupting the business of a competitor; or
4. by using the domain name, you have intentionally attempted to attract, for commercial gain, internet users to your web site or other on-line locations, by creating a likelihood of confusion with the complainant’s mark as to the source, sponsorship, affiliation, or endorsement of your web site or location.
Before making a complaint make sure you consult a qualified trademark attorney with experience in domain names.
The Nacol Law Firm PC
Law office of Mark Nacol
Serving clients in the Dallas / Fort Worth Metroplex area for over 30 years
Tel: 972-690-3333
Monday, April 13, 2009
Intellectual Property - "Trade Dress"
Trade dress is a form of intellectual property that refers to the visual appearance and/or characteristics of a product or its packaging that promotes the product and signifies the source of the product to consumers. Basically, it creates a visual impression which functions like a word trademark. Coca-cola‘s bottling, the overall look of a greeting card line, McDonald’s golden arches, and the overall design of an automobile and even the shapes of buildings have been protected as trade dress. Though trade dress is difficult to define, in recent years significant decisions made by the Supreme Court have assisted in molding the legal issues surrounding trade dress. Specifically, in Grey et al vs. Meijer, Inc., the Court stated the general rule regarding protection of trade dress, as follows:
“The Lanham Act’s protection of registered trademarks also extends to unregistered trade dress. To recover for trade dress infringement under § 43(a) of the Lanham Act, 15, U.S.C. §1125(a), a plaintiff must prove by a preponderance of the evidence:
1. that its trade dress has obtained “secondary meaning” in the marketplace;
2. that the trade dress of the two competing products is confusingly similar; and
3. that the appropriate features of the trade dress are primarily nonfunctional.”
The Court identified eight factors that a court might use to determine whether there is a likelihood of confusion in the trade dress of two competing products:
1. strength of the plaintiff’s mark;
2. relatedness of the goods;
3. similarity of the mark;
4. evidence of actual confusion;
5. marketing channels used;
6. likely degree of purchaser care;
7. defendant’s intent in selecting the mark; and
8. likelihood of expansion of the product lines.
The Court went on to state “the strength of a mark is a determination of the mark’s distinctiveness in the marketplace. A mark is strong if it is highly distinctive, i.e. if the public readily accepts it as the hall mark of a particular source; it can become so because it is unique, because it has been the subject of wide and intensive advertisement, or because of a combination of both. The stronger the mark, all else equal, the greater the likelihood of confusion…”
“Strength of a plaintiff’s trade dress depends upon the interplay of two elements: 1) the uniqueness of the trade dress and 2) the investment in imbuing a trade dress with secondary meaning.” Thus, the most mundane packaging may be infused with meaning by advertising and other promotional tools, rendering a strong trade dress.
Therefore, trade dress may be protectable under federal and state unfair competition laws if the proper requirements are met.
In Taco Cabana International, Inc. v. Two Pacos, Inc., the Court determined not only that restaurant décor may be protected as trade dress, but also that trade dress may be inherently distinctive and protectable from the moment of adoption.
In Wal-Mart Stores, Inc. v. Samara Brothers in a unanimous decision by Justice Scalia, the Supreme Court held that, “in an action for infringement of unregistered trade dress under §43(a) of the Lanham Act, a product’s design is distinctive, and therefore protectable, only upon a showing of secondary meaning.” In this decision, the Court made a distinction between product design and product packaging, requiring proof of secondary meaning only for protection of the former. The Court perceived that design, unlike packaging, did not normally perform the source-identifying function of a mark.
“…where it is not reasonable to assume consumer predisposition to take an affixed word or packaging as indication of source…inherent distinctiveness will not be found. The result of this decision is that litigants could challenge the application of the inherent distinctiveness rule to types of product packaging or word marks where it is not clear they perform a branding function.
In TrafFix Devices, Inc. v. Marketing Displays, Inc. the Court’s decision posed an important constitutional questions. Did the patent clause in Article 1, Section 8, Clause 8 of the Constitution, grant to Congress the power to grant to Authors and Inventors exclusive rights for “limited times,” operate as both a grant and a limitation? They reasoned that trade dress law and patent law serve different purposes, that it is common for different intellectual property interests to inhere in the same subject matter, that no constitutional grant is absolute, and that the policies of the Patent Act would not be unduly imposed because trade dress claimants must still meet significant proofs to assert trade dress rights. In this decision the Court describes trademark functionality as any design feature that performs a function (whether or not better than alternatives) or that has an effect on cost or quality. This decision is important because it states that any “effect on cost or quality” is enough to make a design functional in the trademark sense, regardless of whether it is important to competition that the design be available to others. It did not matter that others might have developed equally effective or superior designs. Because it was functional in a trademark sense, it was not eligible for trade dress protection.
It is evident that the Supreme Court’s jurisprudence has resulted in confusion surrounding trade dress and that further litigation will be necessary to make such issues more clear.
The Nacol Law Firm PC
Law office of Mark Nacol
Dallas / Fort Worth Metroplex area attorney
Serving clients for over 30 years
Tel: 972-690-3333
“The Lanham Act’s protection of registered trademarks also extends to unregistered trade dress. To recover for trade dress infringement under § 43(a) of the Lanham Act, 15, U.S.C. §1125(a), a plaintiff must prove by a preponderance of the evidence:
1. that its trade dress has obtained “secondary meaning” in the marketplace;
2. that the trade dress of the two competing products is confusingly similar; and
3. that the appropriate features of the trade dress are primarily nonfunctional.”
The Court identified eight factors that a court might use to determine whether there is a likelihood of confusion in the trade dress of two competing products:
1. strength of the plaintiff’s mark;
2. relatedness of the goods;
3. similarity of the mark;
4. evidence of actual confusion;
5. marketing channels used;
6. likely degree of purchaser care;
7. defendant’s intent in selecting the mark; and
8. likelihood of expansion of the product lines.
The Court went on to state “the strength of a mark is a determination of the mark’s distinctiveness in the marketplace. A mark is strong if it is highly distinctive, i.e. if the public readily accepts it as the hall mark of a particular source; it can become so because it is unique, because it has been the subject of wide and intensive advertisement, or because of a combination of both. The stronger the mark, all else equal, the greater the likelihood of confusion…”
“Strength of a plaintiff’s trade dress depends upon the interplay of two elements: 1) the uniqueness of the trade dress and 2) the investment in imbuing a trade dress with secondary meaning.” Thus, the most mundane packaging may be infused with meaning by advertising and other promotional tools, rendering a strong trade dress.
Therefore, trade dress may be protectable under federal and state unfair competition laws if the proper requirements are met.
In Taco Cabana International, Inc. v. Two Pacos, Inc., the Court determined not only that restaurant décor may be protected as trade dress, but also that trade dress may be inherently distinctive and protectable from the moment of adoption.
In Wal-Mart Stores, Inc. v. Samara Brothers in a unanimous decision by Justice Scalia, the Supreme Court held that, “in an action for infringement of unregistered trade dress under §43(a) of the Lanham Act, a product’s design is distinctive, and therefore protectable, only upon a showing of secondary meaning.” In this decision, the Court made a distinction between product design and product packaging, requiring proof of secondary meaning only for protection of the former. The Court perceived that design, unlike packaging, did not normally perform the source-identifying function of a mark.
“…where it is not reasonable to assume consumer predisposition to take an affixed word or packaging as indication of source…inherent distinctiveness will not be found. The result of this decision is that litigants could challenge the application of the inherent distinctiveness rule to types of product packaging or word marks where it is not clear they perform a branding function.
In TrafFix Devices, Inc. v. Marketing Displays, Inc. the Court’s decision posed an important constitutional questions. Did the patent clause in Article 1, Section 8, Clause 8 of the Constitution, grant to Congress the power to grant to Authors and Inventors exclusive rights for “limited times,” operate as both a grant and a limitation? They reasoned that trade dress law and patent law serve different purposes, that it is common for different intellectual property interests to inhere in the same subject matter, that no constitutional grant is absolute, and that the policies of the Patent Act would not be unduly imposed because trade dress claimants must still meet significant proofs to assert trade dress rights. In this decision the Court describes trademark functionality as any design feature that performs a function (whether or not better than alternatives) or that has an effect on cost or quality. This decision is important because it states that any “effect on cost or quality” is enough to make a design functional in the trademark sense, regardless of whether it is important to competition that the design be available to others. It did not matter that others might have developed equally effective or superior designs. Because it was functional in a trademark sense, it was not eligible for trade dress protection.
It is evident that the Supreme Court’s jurisprudence has resulted in confusion surrounding trade dress and that further litigation will be necessary to make such issues more clear.
The Nacol Law Firm PC
Law office of Mark Nacol
Dallas / Fort Worth Metroplex area attorney
Serving clients for over 30 years
Tel: 972-690-3333
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