Domain trademark infringement is a topic that domain investors, website flippers, and website creators spend less time on than they should. However, it can kill your business if not taken into consideration.
Since this is a legal topic, I brought in an expert trademark attorney, Roman Vayner from Vayner Legal, to put together the raw details.
This is not the most interesting of topics to read about when discussing website flipping; however, it is a necessary topic to have an understanding of.
This is what this article will cover:
- Why we should care
- Things to know
- What to look out for
- How to analyze for trademarks
- Worst-case situations
- Common questions
Before Roman takes over, I will briefly cover why we should even care about this.
Why Niche Website Investors and Domain Investors Should Be Informed
We often overlook the trademark of our websites and domains. Picture acquiring a website, and then getting a trademark infringement case because the previous owner did not perform the necessary checks. You will potentially lose that domain, which is the primary asset in any website.
Before I look at any website or aged domain to acquire, I always do the following:
- Perform a Google Search to see if anything related
- Perform a USPTO search
These steps can be done in a few minutes but will of course not be as thorough as hiring a professional trademark attorney. The cost of a trademark search can range from $250-400 depending on what’s provided; it’s not a deal-breaker.
3 Major Aspects About Domain Trademark Laws
US trademark law is based on the priority of use of the mark in commerce. In a dispute between two similar trademarks, priority will go to the owner who can prove they used the mark to offer goods or services for sale first. By extension, trademark rights will continue to exist so long as the owner continues to provide goods and services using the mark as the source indicator.
Federal trademark registration with the US Patent and Trademark Office (USPTO) enhances trademark rights that already exist by establishing public evidence of ownership, preventing similar marks from registration, allowing the owner to use the ® symbol, and policing counterfeiters and cybersquatters.
1. Trademark Law is Locational
Trademark law is territorial and rights are limited to the geographic area where the trademark is used.
So, if you have a US trademark, you don’t have any corresponding trademark rights in Germany, unless you have a trademark registration with the German intellectual property office or via an international trademark agreement such as the Madrid Protocol. Similarly, a federal trademark registration in the US, would bar use of subsequent similar marks anywhere in the country.
2. Primary Tests To Catch Trademark Infringement
Most trademark disputes center around “likelihood of confusion” – meaning would a consumer be confused as to the source of the product or service when confronted with the two trademarks?
The legal test is based on a set of 13 factors (outlined here) but most cases come down to two primary factors:
- Are the marks similar in appearance (i.e. sight, sound, impression, connotation), and
- are the goods or services similar
If the answer to both questions is yes, that may indicate a strong chance of consumer confusion, and potential trademark infringement.
3. 5 Steps of Trademark Strength for Domain Names
Domain names also fall within the trademark legal system because in many cases domains serve the same purpose as trademarks: to identify the source of goods or services.
Where a domain name is found to infringe a trademark, the same potential penalties may apply as for trademark infringement, in addition in certain cases described below, the domain name may be transferred to the trademark owner.
However, before assuming every domain name comes with a potential trademark infringement claim, it’s important to understand that not all domains can function as trademarks. Domain names can be evaluated for trademark strength on a spectrum – from generic to fanciful.
Order of trademark strength (weak to strong): Generic → Descriptive → Suggestive → Arbitrary → Fanciful
Step 1: Generic Domains = Weak Protection
A generic name simply describes the goods or services and cannot function as a trademark. These domains do not have trademark rights to assert.
Step 2: Descriptive Domains = OK Protection
Moving up in strength are descriptive marks, which describe a feature or function of goods or services. These domains are also not registrable as trademarks unless they have become distinctive of the applicant’s goods or services, through use in commerce. They are more difficult to enforce and require a higher standard of proof that the name has been a source indicator for the goods or services.
Step 3: Suggestive Domains = Stronger Protection
Suggestive marks require some imagination to connect the name to the goods or services.
Step 4 and Step 5: Arbitrary or Fanciful Domains = Strongest Protection
Where a domain name is a suggestive, arbitrary or fanciful name, the owner may have stronger trademark rights, and is in a better legal position to enforce those rights against domain name owners that use that name without permission.
What To Look Out For with Trademark Infringement
In order to protect trademark owners from bad faith use of their trademarks on the internet, both Congress and the Internet Corporation for Assigned Names and Numbers (ICANN) have established legal and administrative mechanisms against potential abuses.
One of the most common forms of trademark abuse is cybersquatting. Cybersquatting is the practice of registering a domain name in bad faith that incorporates a registered trademark with the intention of selling the domain name back to the trademark owner, or to attract web traffic for commercial purposes without permission or license of the trademark owner.
The Anticybersquatting Consumer Protection Act (ACPA) is the primary anticybersquatting legislation in the US. The ACPA allows a trademark owner to bring a lawsuit if the domain owner:
- Has a bad faith intent to profit from the mark
- Registers, traffics in, or uses a domain name that is identical or confusingly similar to a distinctive mark
If the trademark owner wins its claim under the ACPA, they would be entitled to the value of its damages, an injunction against the domain owner, transfer of the domain name, and attorneys’ fees.
Trademark owners can also fight cybersquatting through an administrative proceeding under ICANN’s Uniform Domain Name Dispute Resolution Policy (UDRP), which provides for arbitration of domain name disputes in an administrative proceeding as opposed to a longer and more costly lawsuit in federal or state court.
Similar to the ACPA, UDRP complaints focus on abusive registration of a domain name. They require the following elements:
- the domain name is identical or confusingly similar to a trademark or service mark in which the complainant (the person or entity bringing the complaint) has rights; and
- the domain name registrant has no rights or legitimate interests in respect of the domain name in question; and
- the domain name has been registered and is being used in bad faith
Domain name owners have several defenses to UDRP claims, including:
- Current or future use of the domain in connection with bona fide offering of goods or services
- The individual, business, or organization has been commonly known by the domain name (even if no trademark rights acquired)
- Legitimate non-commercial or fair use of the domain name
- Trademark owner has a weak mark or have done little to protect or enforce their trademark rights
Another federal law that protects trademark owners is the Trademark Dilution Revision Act of 2006 (TDRA). The TDRA focuses on famous marks, which are entitled to extra protection under US trademark law.
What’s a “famous” mark is a case-specific determination and depends on public perception, quantity of sales, advertising expenditures, and length of time that the mark has been in the market.
The TDRA allows owners of famous marks to stop the use of any mark or trade name that is likely to cause blurring or tarnishing of the famous mark. The TDRA doesn’t require any actual or likely confusion or of actual economic injury but sets a high bar for a mark owner to show that its mark is in fact famous.
How To Analyze Trademarks in the U.S.: Step-by-Step
Domain and website owners should be aware of any trademark rights attached to names and businesses they buy.
A few due diligence steps can save domain owners from spending unnecessary time and money to defend claims of trademark infringement or administrative domain name disputes.
Method 1: USPTO Search Process
The first step in determining whether a domain name is a trademark is to conduct a search of the U.S. Patent and Trademark Office (USPTO)’s Trademark Electronic Search System (TESS).
The USPTO offers three (3) search options:
- Basic Word Mark,
- Word and/or Design Mark, and
- Word and/or Design Mark Search (free form)
Basic Word Mark Search
The first option allows for a search of word marks (live or dead), serial or registration numbers, and owners.
When conducting a search it’s important to search for not just your domain name, but similar sounding names or common alternative spellings. If similar versions of the domain name are on the USPTO register with minor spelling differences or similar pronunciations and providing similar services, there could be a potential trademark infringement issue, so it’s important to check for similar alternatives to your domain when reviewing trademarks.
Word and/or Design Mark Search
The second option allows combinations of search terms and fields such as goods and services, the international class number, or design code.
Class numbers are used to classify goods and services according to pre-defined descriptions set forth by international agreement. The USPTO uses this list as a basis to categorize the goods and services for every trademark. The current list of class numbers and descriptions is available here.
The USPTO also provides a Trademark ID Manual that shows the proper classes and acceptable class descriptions for various search terms. Searching “teaching” for example will show the classes under which various “teaching” goods or services can apply, and the use of the search term in a description that has been accepted by the USPTO.
It’s important to understand which international class number applies to both your services and any potentially similar trademarks because similarity of goods or services is a critical factor in any trademark infringement claim.
Word and/or Design Mark Search
Finally, the third option is used for advanced search and allows search strings based on all the available fields captured by the USPTO. Clicking on the field codes provides an explanation of the search criteria and how to incorporate it into a search string.
Method 2: State Business Registry Search
Trademarks may also not appear on the federal USPTO register but nonetheless be registered as a trademark at the state level.
The USPTO provides a link to all US state agencies where a trademark can be registered. It’s important to search both the state’s trademark and business name registries to confirm whether a domain name is in use at the state level.
Method 3: Perform an Internet Search
Trademark rights are based on use of the mark in commerce. So a search of the federal trademark database on the USPTO or state level search may not uncover all potential trademarks that conflict with a domain name.
An internet search of the name, including spelling variations, is another way to find variations of a domain and confirm whether they present a trademark risk.
The important factors to consider are whether the name is being used as a trademark (i.e. an indicator of the source of goods or services), and how strong is the mark (see the spectrum discussed above).
It’s important to remember that even if similar trademarks are found in a search, determining how they impact a domain name requires a case-specific review and legal analysis, which should be done in consultation with a trademark attorney.
Worst-Case Situations As Domain and Website Investors
Buying and building online businesses results in jumping in and out of trademark issues.
There are two common issues here that need to be discussed.
Acquired Domain is Infringing
If you’ve acquired a new domain, aged domain, or an existing website, it may be infringing on trademarks.
A trademark infringement claim is based on the unauthorized use of a trademark in connection with goods or services in a way that causes consumer confusion, deception, or mistake about the source of the goods or services.
Penalties for trademark infringement can be severe, ranging from a court order that the defendant stops using the mark to monetary penalties, including the defendant’s profits and any damages sustained by the plaintiff, as well as attorneys’ fees for any legal action.
Receiving UDRP Complaints
Complaints under the Uniform Domain Name Dispute Resolution (UDRP) Policy allow trademark owners to stop domains from infringing use of trademarks.
UDRP complaints are administrative proceedings before a panel of arbitrators. They are intended to be faster and more efficient than court proceedings, but give parties the option of appealing the arbitrators’ decision to a court if either party chooses to do so.
As outlined above, the trademark owner has to prove several factors, including that the domain name is identical or confusingly similar to a trademark or service mark in which the complainant has rights; the domain owner has no rights or legitimate interests in the domain name; and the domain name has been registered and is being used in bad faith.
Depending on the result of the proceedings, the panel may cancel, suspend, or transfer a domain name from one entity to the other.
Common Questions about Domains and Trademarks
What should I do before acquiring a domain?
Do a search on the USPTO website, or hire a trademark attorney to do a search. The cost of a search is minimal in respect to the asset.
Where can I find a trademark attorney?
Here are the best ways to find an attorney:
Upcounsel: This is the Upwork for lawyers where you can explain your project and lawyers will submit proposals.
Upwork: there are lawyers on Upwork that you can use as well but less recommended
LegalZoom, etc: many services like LegalZoom take the hassle away from searches. However, you are getting the barebones on these and it’s recommended to build a relationship with an attorney directly.
What do I do if my domain is part of a trademark?
First, you should evaluate the trademark at issue. How similar is the trademark to your domain? Are the goods or services similar? Are the target markets the same? Is the mark famous?
Refer to the list of factors used to determine trademark infringement. The main question is whether a consumer would be confused in determining whether the goods or services come from the trademark owner or your domain.
If the answers to the above questions are “yes” there may be a risk of a trademark infringement claim.
A trademark attorney can help you consider responses in this scenario, including potential defenses, concurrent use agreements, or other alternatives to litigation.
How do I know the classes of goods/services for a trademark?
If the trademark is registered or pending on the USPTO or state trademark database, the application or registration will describe the goods or services.
If a trademark is dead, am I in the clear to use the domain?
Not necessarily. Trademark rights are established and maintained through continuous use. So even if a trademark appears as dead on the USPTO register, it may still be in use and the owner would have rights to enforce it against similar marks or domains.
If the domain has a unique generic TLD (“gTLD”), does that make a difference?
Probably not, because the main focus will be on the domain itself in relation to the goods and services. However, if the gTLD changes the overall commercial impression of the domain, it may be a defense against a UDRP complaint.
If you own a trademark, can you get the domain?
Not necessarily. Having a trademark does not necessarily give you rights to the domain name. However, in cases where a domain name was registered in bad faith to take advantage of the trademark, the Uniform Domain Name Dispute Resolution Policy (UDRP) or Anticybersquatting Consumer Protection Act (ACPA) allow a way for a trademark owner to obtain the domain in certain cases. See above for more details on what is required to prove a UDRP or ACPA claim.
Can someone trademark my domain name?
It depends on how you use the domain name. If it is used to indicate the sources of products or services, then you may have common law trademark rights (at least in the US) which can be enforced against later trademark filings. Without a trademark registration, enforcing common law rights is more difficult.
However, a domain that is just a landing page or placeholder may not prevent someone registering the name as a trademark, so long as they are providing goods or services under that name.
If the domain is a source indicator (i.e. a trademark), the other key considerations are how similar are the domain and trademark are in appearance, connotation, sight, sound, and overall impression, and how similar are the goods or services. If the similarities are significant, there is a higher chance that the trademark be may infringing on the domain name.
Does using a domain name create trademark rights?
It can. If the domain name is used as an indicator of the source of goods or services, as opposed to just a landing page or generic name for the goods or services, then it may create common law trademark rights in the US. Common law rights can be enforced against similar trademarks, although more evidence is required to establish exclusive ownership compared to a federal registration.
👉 Wrap Up: Perform a Search!
Mushfiq here. Thanks to Roman Vayner for his insightful details!
To summarize, it’s crucial to do a search (or hire someone) for all of the domains in your portfolio. If you are looking to acquire a website business, just make sure you do your checks on trademarks before making the decision to acquire.