Business Department

The Anti-Cybersquatting Consumer Protection Act (ACPA) provides the "ultimate protection" against domain name piracy

Is someone trying to profit from using your trademark or personal name on the Internet? Recent legislation offers effective recourse and protection against cybersquatters.

On November 12, 1999, the Anti-Cybersquatting Consumer Protection Act
(the "ACPA") was signed into law. This Federal law was hailed as the ultimate protection for trademark holders against piracy of their marks in the area of domain names. It protects trademarks by providing monetary relief and transfer of domain names to the trademark holders. And even though the ACPA is still in its infancy, the law appears to be effectively granting relief to those who seeks its protections.

What is Cybersquatting?
Cybersquatting is the act of registering a domain name that is either a trademark or personal name, and then trying to sell or use the domain name for profit or personal gain. A domain name is a unique address given to a website identifying its location in cyberspace. Domain names are registered by paying a fee to a registration service provider for the right to use a particular name.

To warrant a civil action, the ACPA states that the trademark owner must show the following:

• That the registrant had a bad faith intent to profit from the mark,
• That the mark was distinctive or famous at the time the domain name was first registered,
• That the domain name is identical to or confusingly similar to the mark, and
• That the mark holder qualifies for protection under Federal trademark laws by being the first to use it in commerce.

The ACPA sets forth nine nonexclusive factors to determine bad faith intent but creates a narrow exception for registrants who believe, and have reasonable grounds to believe, that the use of the domain name is fair or otherwise lawful.

Remedies under the ACPA include forfeiture or cancellation of the domain name, transfer of the domain name to the mark owner, injunctive relief, profits, actual damages, costs, statutory damages from $1000 to $100,000 per domain name and attorneys fees. Monetary damages are only available if the domain name is registered after November 29, 1999, the effective date of the Act.

Actions Against the Domain Name
As added protection for a trademark holder, the ACPA allows for actions against the domain name itself-if the domain name violates the mark and the mark owner cannot get personal jurisdiction over the registrant or cannot find the person by sending or publishing notice. The remedies in these actions are restricted to forfeiture, cancellation or transfer of the domain name. This alternative may have a significant impact on the ability to use the protections of the ACPA given that the nature of the Internet makes it very possible that jurisdiction over the person cannot be obtained.

The ACPA in Action
The cases that have followed since the enactment of the ACPA have done little to interpret or expand the law. Recent Pennsylvania case law has been very straightforward as well. Two recent actions sought injunctive relief from the same individual.

In Shields v. Zuccarini, the court enjoined a domain name registrant from continuing to operate five domain names. The defendant registered domain names that were similar to the plaintiff's trademark of Joe Cartoon, such as joescartons.com, joescartoon.com and others. Once a visitor happened upon these sites, they were trapped in the site and unable to exit without clicking on a succession of advertisements that resulted in revenue for the defendant with each click.

During the injunction hearing, the court determined that Joe Cartoon was a distinctive and famous mark and that the domain names were identical or confusingly similar to that mark. The court's discussion centered on defendant's bad faith intent to profit as it was not until plaintiff filed suit that defendant changed the websites to a message in protest of the plaintiff's cartoons. The court compared the defendant's other domain name operations and found that it "strains credulity to believe that he uses 99.9 percent of his domain names for profit but reserves his Joe Cartoon domains for fair and lawful political speech." Following a summary judgment motion, where the defendant failed to respond, the court restated its earlier findings and ordered the mark transferred to the plaintiff and awarded attorneys fees, costs and statutory damages in the amount of $10,000 per domain name.

In Electronics Boutique Holdings Corp. v. Zuccarini, the court enjoined the defendant from using domain names that were identical to or confusingly similar to Electronic Boutique's trademark. The court relied on the findings of fact in Shields as well as the fact that the defendant specifically intended to prey on Internet users. The court noted that the defendant's yearly income is between $800,000 and $1,000,000 from the domain names he has registered. The court fined the defendant $100,000 per infringing domain name, as well as attorneys fees and costs because, as the court stated, the defendant has thumbed his nose at court rulings and United States laws.

Interestingly, in both cases, the defendant failed to disable the websites as ordered. The web server or Internet Service Provider (ISP) that hosts the sites ultimately disabled them. This is significant in that ISPs may be the best avenue to achieve compliance with a court order.

In conclusion, the ACPA is proving a powerful tool to protect trademark holders' rights. Thus far, Pennsylvania courts have only had to apply the clear language of the law to situations where no real opposition has taken place. It is likely that future cases will lead to further development of the factors constituting bad faith, a more detailed look at the facts and motivations behind a particular use, and a general expansion or limitation of the scope of the ACPA. The ACPA has yet to be widely utilized but its potential seems limitless.

MacElree Harvey
17 West Miner Street
Post Office Box 660
West Chester, PA 19381–0660
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