Anti-Cybersquatting Act: How to Prove Your Claim

The Anti-Cybersquatting Consumer Protection Act (“ACPA”) was passed by Congress in 1999 with the intent of preventing and punishing the nefarious behavior of cybersquatting. Cybersquatting refers to several types of behavior involving registration of domain names that are similar to domain names associated with famous trademarks and brands. In general, the criminal scam is either to blackmail the trademark owner into buying a similar-looking domain name or to actually divert customers and sales to a fake website. The fakery often involves the use of alternative domain name extensions, such as using a country code extension rather than more common top-level extensions like .com, .org, or .net. Other fakery involves the use of common typos for the name-brand domain name or the intentional use of similar-looking domain names.

To prove a claim under the ACPA, it must first be shown that the plaintiff owned a domain name that involved a registered trademark. Then it must be shown that the defendant had a domain name that was identical or confusingly similar to the plaintiff’s domain name. This is often an “easy” element to prove since, generally, “confusingly similar” almost always exists if the offending domain name is the same except for an alternative extension.

The second element involves proof that the defendant registered, trafficked in, or used the offending domain name. In other words, it is not enough to own or have a domain name similar to an existing domain name. There must be some USE of the domain name, such as registering or attempting to register it, using it, or offering it for sale. In the ACPA, “trafficked” has a similar meaning to trafficking in drugs or other illicit things. That is, “trafficking” a domain name means offering the domain name for sale in bad faith.

Finally, it must be shown that the defendant acted in bad faith. This element is the gist of cybersquatting and, in some cases, is the most difficult to prove. Of course, in other cases, bad faith is “easy” to prove because of incriminating evidence.

The ACPA uses the concept of “profiting” from cybersquatting. Thus, bad faith can be shown in several ways. As noted above, bad faith can be shown by efforts to extort money from the owner of the legitimate domain name in exchange for releasing ownership of the offending domain name. Facts that might help prove this form of “blackmail” might include:

Defendant having no trademark or intellectual property similar to the domain name
Defendant not having a name like or being known as an entity similar to the domain name
Defendant not making legitimate use of the offending domain name/website
Defendant having no explanation for obtaining a domain name/website that is/was identical or confusingly similar to the plaintiff’s trademarked name
Any efforts to conceal contact information when registering or attempting to register the offending domain name
And pattern or other examples of the defendant engaging in similar nefarious behavior
And more

Bad faith can also be shown where actual efforts were made by the defendant to divert customers and sales from the plaintiff’s trademarked domain name/website.

A plaintiff who is successful under the ACPA can recover damages, statutory damages of $1,000 to $100,000 per domain name, disgorgement of profits, attorneys’ fees, and injunctive relief.

The ACPA’s Statutory Framework

The ACPA is codified at 15 U.S.C. § 1125(d), which was added to the Lanham Act by Congress in 1999. The statute creates a private civil cause of action for trademark owners whose marks are targeted by cybersquatters. Congress also created a separate in rem jurisdiction provision at § 1125(d)(2), which allows trademark owners to bring an action against the domain name itself when personal jurisdiction over the registrant cannot be established — a practical tool when cybersquatters use fake registration information or are located abroad.

Breaking Down the Three Elements

Element One: A Distinctive or Famous Mark

The plaintiff must establish that it owns a mark that is either distinctive or famous. Under the statute, “distinctive” means the mark is inherently distinctive or has acquired distinctiveness through secondary meaning. “Famous” has the same meaning as under the federal trademark dilution statute at 15 U.S.C. § 1125(c) — a widely recognized mark by the general consuming public of the United States as a designation of source. Courts have held that a mark does not need to rise to the level of Coca-Cola or Apple to qualify as “distinctive” under the ACPA. A registered trademark, particularly one that has been used for several years, will generally satisfy this element.

Element Two: Identical or Confusingly Similar Domain Name

The offending domain name must be “identical or confusingly similar” to the plaintiff’s distinctive mark, or “dilutive of” the plaintiff’s famous mark. Courts apply a straightforward visual and phonetic similarity test. Common cybersquatting patterns that consistently satisfy this element include: typo-squatting (deliberate misspellings), domain name extensions (using .net, .org, .co, or country codes when the trademark owner holds the .com), hyphenated variations, and additions of generic terms like “buy,” “cheap,” or “official” to the trademark.

Element Three: Bad Faith Intent to Profit

Bad faith is the heart of the ACPA claim. Congress included a non-exclusive list of nine factors at 15 U.S.C. § 1125(d)(1)(B)(i) that courts weigh when evaluating bad faith. These are:

The trademark or other intellectual property rights of the person in the domain name
The extent to which the domain name consists of the legal name of the person or a name that is otherwise commonly used to identify that person
The person’s prior use, if any, of the domain name in connection with the bona fide offering of any goods or services
The person’s bona fide noncommercial or fair use of the mark in a site accessible under the domain name
The person’s intent to divert consumers from the mark owner’s online location to a site accessible under the domain name that could harm the goodwill represented by the mark
The person’s offer to transfer, sell, or otherwise assign the domain name to the mark owner or any third party for financial gain, without having used — or having intent to use — the domain name in the bona fide offering of goods or services
The person’s provision of material and misleading false contact information when applying for registration of the domain name
The person’s registration or acquisition of multiple domain names which the person knows are identical or confusingly similar to marks of others
The extent to which the mark incorporated in the person’s domain name registration is or is not distinctive and famous within the meaning of § 1125(c)

No single factor is dispositive. Courts weigh the factors in their totality. The statute also creates a safe harbor at § 1125(d)(1)(B)(ii): bad faith intent shall not be found in any case where the court determines the person believed and had reasonable grounds to believe that the use of the domain name was a fair use or otherwise lawful.

Remedies Available Under the ACPA

A prevailing plaintiff under the ACPA may elect to recover either actual damages and disgorgement of profits, or statutory damages. Statutory damages range from $1,000 to $100,000 per domain name, as the court considers just. 15 U.S.C. § 1117(d). The statute also authorizes injunctive relief — including an order that the domain name be transferred to the plaintiff or cancelled — as well as attorney’s fees in exceptional cases. In cases involving foreign registrants where personal jurisdiction is unavailable, the in rem provision permits the court to order the transfer of the domain name based solely on its connection to the forum.

UDRP as an Alternative to ACPA Litigation

Trademark owners targeting cybersquatters also have an alternative to federal court litigation: the Uniform Domain-Name Dispute-Resolution Policy (“UDRP”) administered by ICANN-approved arbitration providers, including the World Intellectual Property Organization (“WIPO”) and the National Arbitration Forum (“NAF”). A UDRP proceeding is faster (typically 60 days), less expensive, and limited in scope — the only remedy is transfer or cancellation of the domain name. The UDRP’s three-element test is similar to the ACPA: (1) the domain name is identical or confusingly similar to a trademark, (2) the registrant has no rights or legitimate interests in the domain name, and (3) the domain name has been registered and is being used in bad faith. Experienced Internet attorneys can help trademark owners choose between ACPA litigation and UDRP depending on the specific facts and goals of the case.

Contact Revision Legal

If you have questions about internet law, the experienced attorneys at Revision Legal can help. We represent businesses, entrepreneurs, and individuals across the country. Contact us through the form on this page, visit our internet law practice page, or call us at (855) 473-8474.