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Protecting Your Business Against Copycat Websites and Cybersquatters

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Cybersquatting or domain squatting is registering, trafficking in, or using an internet domain name in bad faith with the intent to profit from another person’s trademark or business. The domain name needs to be confusingly similar to a business or trademark. Sometimes the domain names are registered with no intention of being used by the register except to sell the name to the person or company who owns the trademark or business at an inflated price. Other times, the registrant creates a website using the confusing domain name. These copycat websites can mimic the look of another business and/or use similar logos and trademarks, causing customer confusion and potential revenue loss.

Cybersquatting and copycat websites are not new, and some countries have specific laws against cybersquatting including the United States. In the U.S., the Anticybersquatting Consumer Protection Act (ACPA) of 1999 provides protection against cybersquatting for individuals and owners of distinctive trademarked names and allows trademark and business owners to address trademark infringement in court. Below are steps to take if cybersquatting or a copycat website is discovered by an individual or company.

ARBITRATION MECHANISMS FOR WEBSITE OWNERSHIP DISPUTES

When someone creates a website, one of the first things that happen is registration of the domain name, the actual website address, to a person or entity. The person or entity becomes the registrant who is entitled to use that domain name for its website.

As part of the initial domain name registration process, new registrants must accept an agreement. In the agreement, there are provisions requiring the new registrant to submit to arbitration proceedings if a dispute arises about whether they have the legal right to use the domain name. By accepting the registration agreement when the domain name is first registered, the person or entity agrees to arbitrate any dispute. Arbitration is a private dispute resolution mechanism where two parties agree to let another person (not a judge) decide their case outside of the court system.

The click-through agreement during the registration process is what gives the Internet Corporation for Assigned Names and Numbers (ICANN) the power to set up binding mechanisms for arbitration. ICANN has set up two mechanisms for arbitration. The primary, full-scale arbitration mechanism is called the Uniform Domain Name Dispute Resolution Policy (UDRP). A smaller-scale, cheaper arbitration mechanism, called the Uniform Rapid Suspension System (URS), is also available for certain types of domain names. Under either policy, an individual has the right to file a complaint asking an arbitrator from one of ICANN’s approved arbitration organizations to act against the person or entity who registered the website. The neutral third party decides whether the registrant who registered a domain name that sounds like a business, trademarked slogan, etc. should be allowed to keep using it or not.

transferring domain name or website ownership requires proof of harm to commercial interests or bad faith

In order to have a website taken down or transfer ownership to another person, an individual needs to prove the copycat website should not be allowed to use the trademarked name. There are several steps an individual must follow.

The first step is determining whether there is a viable claim for trademark infringement against the other person(s) who currently own the website. There are several ways a copycat website can cause damage to a trademark or business. There needs to be some type of harm to the commercial interests as a business owner, and the other person who set up the copycat website cannot and does not have any legal right to cause the individual or business commercial harm. For example, the copycat website:

  1. 1.  Makes customers or web users believe it is coming from the legitimate business
  2. 2.  Creates false or misleading information about the business
  3. 3.  Outright steals customers or potential customers

In other words, the chances of success are usually highest when the copycat website creator or operator has some type of devious, malicious, or opportunistic intent. This is what the law sometimes calls acting in “bad faith”. If there is a suspicion someone has set up a copycat website in bad faith to cause harm or capitalize on a business success, then legal action against the website’s creator or operator may be pursued.

using the udrp process to cancel or transfer a domain name

Canceling or even transferring a domain name are remedies available under the UDRP. In order to cancel or transfer a domain name, an individual needs to submit a complaint (maximum of 15 pages) along with various attached documents proving the following:

  1. 1.  The website’s domain name is identical or confusingly like a trademark or service mark in which the individual owns
  2. 2.  The website registrant has no rights or legitimate interest in respect to the domain name
  3. 3.  The website registrant has, in fact, registered the domain name and is using it in bad faith

Proving the above requirements can be tricky. Several documents need to be submitted along with a convincing written argument as to how those documents prove the domain name should be canceled or transferred to another individual.

Next, the person or company who registered the domain name will have an opportunity to respond with its own argument (maximum of 15 pages) defending its use of the website and submit its own documentation. Once both sides have submitted their positions, the arbitrator (or arbitrators if a three-person panel is requested) will normally decide who wins based on the written submissions without requesting a hearing. While there is no definite timeline for when a decision must be reached, the arbitrators will generally make their determination within a few months.

In general, the person challenging the domain name will pay for all the arbitration fees. Fees vary depending on the number of disputed domain name(s), the number of alias(es) the opponent is suspected of using, and the arbitration organization used. Currently, there are only a handful of approved arbitration organizations throughout the world. At the time of this writing, fees for the U.S.-based FORUM are as follows:

Number of Disputed Domain Names

Single-Member Panel

Three-Member Panel

1 – 2

$1,330

$2,660

3 – 5

$1,480

$2,960

6 – 10

$1,830

$3,660

11 – 15

$2,280

$4,560

16 or more

Must contact FORUM for a fee quote

Must contact FORUM for a fee quote

 

using the uRS process to reduce costs and time

The URS is another arbitration process an individual can use to contest the usage of a copycat website. URS is a faster, streamlined arbitration process that tries to reach a final resolution within 21 days. However, in order to use this process, the trademark infringement must be blatant, and the domain name must fall under the URS process. Unlike the UDRP, the URS is not incorporated into all of the generic top-level domain names (gTLD) in use on the internet. The older and most common gTLDs, such as .com, typically did not require users to submit to URS arbitration in the click-through agreement when they were established. Those older registrations are only subject to the full UDRP arbitration process.

The only remedy available under the URS is the suspension of the domain name for the remainder of the registration period, with an option to extend the registration (and the corresponding suspension) for another year if the registration renewal is paid on behalf of the blocked person or entity. If the desired result is to cancel the domain name or get it transferred to another individual, UDRP is the only option.

The basic process under the URS is the same as under the UDRP. A complaint needs to be submitted with supporting documentation, and the domain name’s registrant has an opportunity to respond before a decision is issued. There are three major differences between submitting a complaint using the URS process vs the UDRP:

  1. 1. The case explanation is a much shorter description (only 500 words).
  2. 2. The case is always decided by a single arbitrator without an option to increase the number to a three-person panel.
  3. 3. The single arbitrator is only allowed to rule in favor of the complainant if there is clear and convincing evidence that the domain name is infringing on a trademark. In other words, if there is any doubt about whether the opponent might have the right to use that domain name, the complainant will lose.

Essentially, the URS is designed to only deal with the most blatant cases of cybersquatting and other improper uses of domain names. If the use isn’t clearly and obviously improper from the documentary evidence submitted, then the UDRP may be a better option. The UDRP is designed to handle more complex cases in which further detailed explanation may be required in order to help the arbitrator(s) understand why and how the domain name is infringing on a trademark.

URS fees vary depending on the number of domain name(s) being disputing, the number of alias(es) the opponent is suspected of using, and the arbitration organization used. At the time of this writing, there are only three approved URS arbitration organizations throughout the world. Fees for the U.S.-based FORUM are as follows:

Number of Disputed Domain Names

Single-Member Examiner

1 – 14

$375

15 – 30

$400

31 – 50

$500

51 or more

Must contact FORUM for a fee quote

*Note: additional fees apply for re-examinations, URS appeals, and appeals to the full UDRP system.

THE TAKEAWAY

Cybersquatting and copycat websites can cause businesses financial harm. These sites can cause customer confusion, leading to loss of customers and/or lost profits. If someone is taking advantage of a business’s name or trademark, the rightful business owner may be able to suspend that domain name, cancel it, or get it transferred. The key to successfully receiving one of these remedies is to gather complete and convincing documentary evidence and then decide which of the two processes makes the most sense for the dispute.

If your business is suffering because a cybersquatter has set up a website that looks like your company, contact us. Whitcomb, Selinsky, PC has a team of experienced attorneys ready to help.

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About the AuthorDavid Tscheschke, Esq.

When David counsels clients, he keeps potential business concerns in mind. This is due to his extensive knowledge of business administration and economics. By identifying critical business or industry issues early on, David tailors his advice to address any concerns he has identified during his initial research and discovery. This mindset allows David to focus on delivering value to every client.

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