Businesses use their trademarks in domain names to help direct customers to their site. Disputes arise when a trademark owner discovers that someone else has registered and is using a domain name that incorporates or is otherwise confusingly similar to the owner's trademark. Such disputes have become common as increasing numbers of businesses and individuals register domain names and conduct business over the Internet. There are means for resolving these disputes and stopping "cybersquatters" who register domain names using famous or well-known marks and then seek to profit by selling the domain name at a premium to the trademark owner or licensee.

The registration agreements for many domain names, including .com, .org, .net, .info, and .biz names provide for the resolution of domain name disputes under the Uniform Dispute Resolution Policy ("UDRP"). (The Internet Corporation for the Assigned Names and Numbers ("ICANN") Board adopted the UDRP in 1999.) Because domain name registrations have agreed to the UDRP as a part of their registration agreement, the UDRP is available without regard to the residence of the domain name registrant or the trademark owner. This is a significant advantage of the UDRP over litigation in court when the mark owner resides in one country and the domain name registrant resides in another.

A UDRP proceeding is fast and inexpensive, particularly when compared to litigation. The proceeding begins with the filing of a complaint with a filing fee. The filing fee for a dispute involving one domain name to be decided by a single panelist is as little as $1500. The fee is higher if one of the parties request to have the matter decided by three panelists. The fee is somewhat higher if the dispute involves multiple domain names.

The complaint is filed electronically. An answer to the complaint is due 20 days after the proceeding has begun and is filed electronically as well. These are typically the only papers filed with the panel. There is no discovery and no live hearing or trial. Within about three months, the panel usually delivers its decision. The panel's decision is sent to the parties by e-mail. The panel can order that the domain name be transferred or canceled, but it cannot award damages or attorney fees.

To succeed in a UDRP proceeding, a trademark owner must prove three things. First, the owner must prove that it has rights in the mark. A copy of a trademark registration is suffice to show ownership. If the owner has no registration, it can provide evidence of its use of the mark as a distinctive identifier in connection with goods or services. The owner must also show that the domain name is identical or confusingly similar to its mark. The marks are directly compared without regard to the content of the website to determine whether they are identical or confusingly similar. A domain name that combines the mark with other words is often confusingly similar to the mark despite the fact that other words or terms are included in the name.

Second, the trademark owner must show that the respondent has no rights or legitimate interest with respect to the domain name. Legitimate interests in the domain name might include non-commercial use, prior use as a mark before registration and use of the mark to sell genuine goods. The trademark owner must make only a showing of no known legitimate interest. If the domain name registrant cannot demonstrate that he or she has a legitimate interest in its answer, then the mark owner should prevail.

Third, the trademark owner must show that the domain name was registered and used in bad faith. The UDRP provides examples of four circumstances that demonstrate bad faith: (1)attempting to sell the domain name registration for a sum in excess of the registrant's out-of-pocket costs, (2) a pattern of registering domain names to prevent the trademark or service mark owner from using the mark in a domain name, (3) registering a domain name primarily for the purpsoe of disrupting the business of a competitor; and (4) using the domain name to intentionally attract, for commercial gain, Internet users to a site by creating a likelihood of confusion with the trademark as to the source, sponsorship, affiliation or endorsement of a web site or of a product or service. These circumstances are only examples; therefore, a trademark owner may present evidence of other circumstances that indicate bad faith. The failure to respond to the complaint is an indication of bad faith, but it is not, standing alone, dispositive of the issue. A lack of any explanation or possibility of good faith is evidence of bad faith.

Once the trademark or service mark owner has submitted its complaint with evidence on each of the three elements and the domain name registrant has responded (or the time for response has passed) the panel (comprised of either one or three members) considers the evidence and renders its decision, usually in as little as three months. If the panel agrees with the trademark or service mark owner, it then orders that the domain name either be transferred to the trademark/service mark owner or that it be canceled. The panel does not have the authority to award damages or attorney fees. A UDRP proceeding does not foreclose litigation to recover damages if the mark owner wishes to pursue that option. It does provide a fast and economical procedure for resolving domain name disputes and giving the mark owner control over a domain name that was registered and used in bad faith and is confusingly similar to the owner's mark.

In part II, litigation concerning domain names is discussed, particularly litigation brought under the Anti-CyberSquatting Consumer Protection Act.