Domain Name Legal Issues

Domain Name Legal Resources
The business of domain names is inextricably linked to the field of trademark law. To help bridge the gap between the two, we've provided this page as an introduction to the legal issues surrounding domain name ownership rights and domain name buying and selling. In addition, you can find resources to meet a variety of domain name legal challenges, such as links to the domain name organizations, domain name dispute arbitrators, domain sales and lease contracts, a domain escrow service, and trademark research.
Here you will find:

• The Legalities of Buying and Selling Domain Names
• Domain Name Legal Resources
• The UDRP
• Important Websites
• Sample UDRP Decisions
• Reverse Domain Hijacking Decisions

Please note that this page does not constitute professional legal advice, and is intended for informational purposes only!

The Legalities of Buying and Selling Domain Names

The public conception still contains many misunderstandings regarding the legalities of buying and selling domain names. Many people have heard stories of malicious "cybersquatters" who deliberately register company names and then demand outrageous sums as a ransom for their return. Regrettably, these few bad eggs have sufficed to give the entire industry a lingering bad reputation, even though their activities have since been brought under control by more up-to-date legislation. One thing is clear, and that’s that domain name disputes are never as simple as they may appear.
The important thing is to know that buying and selling domain names is perfectly legal, as long as the domain being sold does not infringe on the trademark rights of a third party. Today, the vast majority of domain investors operate within this legally-acceptable territory. However, in some cases a domain owner is unaware of, or chooses to ignore, the legal constraints. Fortunately, in these cases, a trademark holder has numerous channels for addressing their ownership dispute. These resources are described below.
Domain name sellers should be aware that it is their responsibility to ensure that their domain name is free from possible trademark infringements before listing it for sale. Ignorance of the law is no excuse! Use the links and information provided here to inform yourself about your rights and the legalities governing domain name ownership to reduce the risk that you will lose your domain.
Trademark holders should be aware that possessing a trademark for a given term does not automatically mean that you have a legitimate legal claim to a domain name. Possession of a valid trademark is only one of three requirements that you need to meet to win ownership of a domain name via ICANN's Uniform Dispute Resolution Policy (UDRP), the policy governing ownership disputes for the generic TLDs (.com, .net, .org, .biz, and .info) or the U.S. Anticybersquatting Consumer Protection Act (15 U.S.C. sec. 1125).
Just as important are the requirements that (1) the domain registrant have no legitimate interests in the domain and that (2) they evidenced bad faith in registering the domain. Both elements require evidence beyond the mere registration of a domain. Please take the time to inform yourself about the UDRP and other legalities governing domain names using the resources provided below.
Before you make a complaint, make sure that you have consulted a qualified trademark attorney with experience in domain names. Legal disputes should generally be considered a last option: the cost for a UDRP case is $1,500 plus legal expenses, and there is no guarantee that you will win (for a complete schedule of UDRP fees, click here).
If you sue and lose, your chances of then being able to purchase the domain from the current owner is greatly reduced. In addition, frivolous UDRP claims against domain owners can result in a finding of reverse domain hijacking - a practice in which trademark holders engage in a bad-faith attempt to use the UDRP to wrongfully strip the legitimate registrant and user of a desired domain name simply because the complainant holds a trademark in that name or one similar to it.

Domain Name Legal Resources

• The UDRP
• Applicable Disputes
• Evidence of Registration and Use in Bad Faith
• How to Demonstrate Your Rights to and Legitimate Interests in the Domain Name
• Important Websites
• Sample UDRP Decisions
• Reverse Domain Hijacking Decisions
• Sample Decisions Finding Reverse Domain Hijacking
• More information on Reverse Domain Hijacking

Uniform Domain Name Dispute Resolution Policy

(the entire UDRP can be found here)

1. Applicable Disputes. You are required to submit to a mandatory administrative proceeding in the event that a third party (a "complainant") asserts to the applicable Provider, in compliance with the Rules of Procedure, that
1. your domain name is identical or confusingly similar to a trademark or service mark in which the complainant has rights; and
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.

In the administrative proceeding, the complainant must prove that each of these three elements are present.

2. Evidence of Registration and Use in Bad Faith. For the purposes of Paragraph 4(a)(iii), the following circumstances, in particular but without limitation, if found by the Panel to be present, shall be evidence of the registration and use of a domain 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 location, 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 or of a product or service on your web site or location.
3. How to Demonstrate Your Rights to and Legitimate Interests in the Domain Name in Responding to a Complaint. When you receive a complaint, you should refer to Paragraph 5 of the Rules of Procedure in determining how your response should be prepared. Any of the following circumstances, in particular but without limitation, if found by the Panel to be proved based on its evaluation of all evidence presented, shall demonstrate your rights or legitimate interests to the domain name for purposes of Paragraph 4(a)(ii):
1. before any notice to you of the dispute, your use of, or demonstrable preparations to use, the domain name or a name corresponding to the domain name in connection with a bona fide offering of goods or services; or
2. you (as an inpidual, business, or other organization) have been commonly known by the domain name, even if you have acquired no trademark or service mark rights; or
3. you are making a legitimate noncommercial or fair use of the domain name, without intent for commercial gain to misleadingly pert consumers or to tarnish the trademark or service mark at issue.

Uniform Domain Name Dispute Resolution Policy
Internet Corporation for Assigned Names and Numbers (ICANN)

• http://icann.org/

UDRP Arbitrators

• World Intellectual Property Organization (WIPO)
• http://www.wipo.int/
• National Arbitration Forum (NAF)
• http://www.arb-forum.com/
• Asian Domain Name Dispute Resolution Centre (ADNDRC)
• http://www.adndrc.org/adndrc/index.html
• CPR Institute for Dispute Resolution
• http://www.cpradr.org/

Domain Name News

• DN Journal
• http://www.dnjournal.com

Sample UDRP decisions:

• DARKFIRE.com & DARKFLAME.com
• BND Ent. d/b/a Dark Fire v. RN WebReg a/k/a darkflame.com a/k/a Buy This Domain, NAF Forum File No. 0405000280502 (July 28, 2004).
• “Respondent has rights and legitimate interests in the disputed domain names, because the sale of generic domain names constitutes a bona fide offering of goods and services where Respondent is not aware ofa party’s rights in a mark. The Panel finds that as a generic domain name reseller, Respondent has rights and legitimate interests, pursuant to Policy ¶ 4(a)(ii), in attempting to sell the and domain names when it was unaware of any possible rights held by Complainant in similar marks.”
• 50PLUS.com
• Fifty Plus Media Corp. v. Digital Income, Inc., NAF Forum File No. 94924 (July 17, 2000).
• The Panel found that the Complainant failed to prove that Respondent had no rights in the domain name and had registered and used the domain name in bad faith where Respondent is an Internet business which deals in selling or leasing descriptive and/or generic domain names.
• CRAFTWORK.com
• Gen. Mach. Prod. Co. v. Prime Domains, NAF Forum File No. 92531 (Mar. 16, 2000).
• The Panel found for the Respondent, who was in the business of identifying domain names comprised of generic or descriptive terms, registering those domain names, selling them to interested parties, and developing websites using those domain names for clients. The Respondent rebutted the argument that it had no legitimate interest in the domain name since the name had not acquired distinctiveness, and instead, was merely generic and descriptive at the time of registration.
• FRONTRANGEINTERNET.com
• Front Range Internet, Inc. v. Murphy, NAF Forum File No. 145231 (Apr. 4, 2003).
• “In some circumstances, the trading of domain name registrations is considered a bona fide offering of goods and services.”
• TARGET.org
• Target Brands, Inc. v. Eastwind Group, NAF Forum File No. 0405000267475 (July 9, 2004).
• “The Panel determines that “target” is a generic term and a common word. Complainant does not have monopoly over any domain name with the word “target” in it. The Panel finds that Respondent has rights to and legitimate interests in a domain name that consists of a generic or common term. … Additionally, where a domain name is generic, the first person to register it in good faith is entitled to the domain name and this is considered a ‘legitimate interest.’”
• ZERO.com
• Int'l Holding v. Beyonet Servs., WIPO Case No. D2000-0161 (May 12, 2000).
• ”Common words and descriptive terms are legitimately subject to registration as domain names on a 'first-come, first-served' basis.”
• CHOICE.com
• Choice Courier Sys. Inc. v. Kirkendale, WIPO Case No. D2002-0483 (July 23, 2002).
• “There is no requirement that the user of a domain name must offer goods or services bearing a mark which matches the domain name. This is particularly so when the mark is a generic word.”
• SOCCERZONE.com
• Soccerplex, Inc. v. NBA Inc., NAF Forum File No. 94361 (May 25, 2000).
• The Panel found that the Complainant had failed to show that it should be granted exclusive use of the domain name, as it contains two generic terms and is not exclusively associated with its business.
• BRAVES.com
• Atlanta National League Baseball Club, Inc. v. Braves Cleaning Service and Lindsey Crawley, NAF Forum File No. 319615 (Oct. 28, 2004).
• The Atlanta Braves won despite arguments by the registrant that the domain name was a common word. According to the Panel, the fact that the registrant lived within 10 miles of the Braves home stadium was a determining factor in finding bad faith.

Reverse Hijacking Cases:
Sample Decisions Finding Reverse Domain Hijacking

• KIWI.com
• Kiwi European Holdings B.V. v. Future Media Architects, Inc., WIPO Case No. D2004-0848 (Jan. 4, 2005).
• “The Panel finds that the Complaint was brought in bad faith in an instance of reverse domain name hijacking, based upon the complete lack of evidence that the disputed domain name, a generic term, was registered or is being used for reasons related in any way to Complainant or its mark.”
• SMARTDESIGN.com
• Smart Design LLC v. Hughes, WIPO Case No. D2000-0993 (Oct. 18, 2000).
• “Allegations of bad faith are serious allegations. They should not be made lightly. That Complaints under the Policy can only succeed in cases of bad faith registration and use demonstrates the narrow ambitof the Policy. Doubtful disputes have to be resolved elsewhere. The Panel is well aware that there is a tendency for some trade mark owners to hold extravagant views as to their legitimate rights and to hold excessive views as to the motives of those whom they believe to be infringers, but that is no excuse for making wild allegations of bad faith.”
• GOLDLINE.com
• Goldline International, Inc. v. Gold Line, WIPO Case No. D2000-1151 (Jan. 4, 2001).
• “Taking account of the complainant’s delay in bringing its claim and apparent initial acknowledgement that the respondent was the bona fide owner of the domain name, the Panel ruled that it was unreasonable for the complainant to have brought the complaint given the objective unlikelihood of success. In other words, bad faith was found to encompass both malicious intent and recklessness or knowing disregard of the likelihood that the respondent possessed legitimate interests.”

More Information on Reverse Domain Hijacking

• http://www.dnjournal.com/legal/sl_reverse_hijacking.htm
• http://www.gigalaw.com/articles/2002-all/hollander-2002-03-all.html