Early trademark registration can help a company efficiently defend itself from cybersquatters who seek to benefit from or harm the goodwill of a company by registering abusive domain names that incorporate the company’s name or brands. Cybersquatter misappropriation can create significant expenses for a company. Companies generally seek to defend themselves by bulk-purchasing domain names that bear similarities to its name or associated brands. However, predicting the domain names a cybersquatter may register is expensive and nearly impossible. Litigation is similarly cost-prohibitive and unproductive. Fortunately, registered trademark holders are in a better position to take advantage of an alternate and accessible method of defense.
Under the Uniform Domain Name Dispute Resolution Policy (the “UDRP”), registered trademark holders can resolve disputes with alleged cybersquatters through quick and relatively inexpensive administrative proceedings. An administrative procedure under the UDRP is typically completed within 60 days of the date a UDRP provider receives the complaint. The fees associated with UDRP proceedings vary among the providers based on the number of domain names in dispute and the desired number of arbitration panelists (one or three):
- National Arbitration Forum: base fee of $1,300 to $4,500 for proceedings involving up to 15 domain names.
- World Intellectual Property Organization (“WIPO”): base fee of $1,500 to $5,000 for proceedings involving up to 10 domain names.
- Arbitration Center for Internet Disputes (Czech Arbitration Court): base fee of $500 to $7,100 for proceedings involving up to 50 domain names.
- Asian Domain Name Dispute Resolution Centre: base fee of $1,000 to $7,000 for proceedings involving 10 domain names.
A successful complainant may submit a request to the Internet Corporation for Assigned Names and Numbers (“ICANN”), whereby ICANN will cancel, transfer or make changes to domain name registrations according to the request.
Under paragraph 4(a) of the UDRP, a complainant seeking relief from a cybersquatter’s actions must prove that:
- The disputed domain name is identical or confusingly similar to a trademark or service mark in which the complainant has rights.
- The respondent has no rights or legitimate interests with respect to the disputed domain name.
- The disputed domain name has been registered and is being used in bad faith.
While the UDRP does not require a registered trademark to satisfy the first element, common law trademark rights require additional proof that can be hard to obtain. Complainants asserting common law or unregistered trademark rights must show that the name has become a distinctive identifier associated with the complainant or its goods or services (otherwise known as secondary meaning). Relevant evidence of secondary meaning includes length and amount of sales under the trademark, the nature and extent of advertising, consumer surveys and media recognition. Depending on the circumstances, a complainant may have to provide evidence of sales figures in the range of hundreds of thousands or multiple millions to prove secondary meaning in the absence of a registered trademark. This makes trademark registration especially important for early-stage companies, as failure to satisfy all elements under paragraph 4(a) forecloses a complaint under the UDRP.