By Todd Hamer
July 24, 2001
As we move ever more quickly into the cyber-age, we are faced with the reality that the "old ways" are fast becoming obsolete. The Internet has profoundly changed learning, communication, and even shopping. The Law is no different.
Because of the Internet, there is a need both for new laws and massive rethinking of old laws. One prominent example of this is the phenomenon known as "cyberpiracy," one example of which is the practice of "cybersquatting." Cybersquatting is the act of acquiring a domain name that should logically belong to someone else with the intent to profit from it later.
Recently, a cybersquatting variation has appeared in the form of a new type of website. It’s purpose is not to profit from the use of another’s name, but to provide a forum in which people can complain about bad experiences they have had with the other entity. At face value, and according to traditional laws, there is no problem with such a purpose. It is well within the traditional free speech protections to voice disapproval or dissatisfaction. The problem arises because of the domain name of this type of website.
The following story will illustrate the point.
Imagine that Jo-Trux is a large rental truck company. It was founded by Joseph Trucks and his two sons in 1971. Since then, it has become one of the most respected rental truck companies in the country. Jo-Trux has outlets in every state except Hawaii. In 1973, the company applied for and received trademarks on its name, its logo, and the trade dress of its vehicles. The Jo-Trux reputation was built on reasonable prices, high quality trucks, and excellent customer service.
Six months ago, Tom Banks, a young computer programmer, rented a Jo-Trux van to help him move his belongings after a cross-country job transfer. During the move, Banks experienced a number of problems with the van as a result of which, he almost missed his first day of work. When he returned the van, he explained what had happened and demanded a refund. Eventually he got his refund, but only after making multiple telephone calls to the company and dealing with a lot of paperwork and a number of delays.
Utterly frustrated, Banks created and registered in his name the domain name jo-truxsucks.com. On this website, Banks described his experiences with Jo-Trux and invited others to add their own bad experiences with the company. The site immediately and consistently received almost one hundred hits per day. Two hundred people left e-mail messages about their experiences with Jo-Trux.
When Jo-Trux executives found out about jo-truxsucks.com, they were alarmed and more than a little upset. Albert Trucks, Joseph’s son and the current CEO, called the company’s lawyers and demanded that they initiate legal action to shut down the website. The lawyers advised Mr. Trucks that there was possibly a trademark violation, and a good chance that a court would find a likelihood of confusion between jo-truxsucks.com and their own website, jo-trux.com.
The lawyers sent Banks a cease and desist letter advising him to shut down the website immediately. Banks replied that he would not because he was doing nothing wrong. Banks further explained that after speaking with a lawyer, he believed his case would hold up in court. He pointed out that he was not violating the Jo-Trux trademark because he was not using the name in any sort of trademark context.
Upon receiving Banks’ reply, the Jo-Trux lawyers sought and obtained Albert Trucks’ permission to bring suit against Tom Banks.
Of course one way a trademark owner can respond is to do nothing. A number of companies decide to simply allow the site to exist, and very likely monitor it to make sure it remains essentially harmless. Sometimes a company that chooses to do nothing may even use the site as a sort of suggestion box.
An alternative response is to send a simple cease and desist letter, as the Jo-Trux lawyers did. This didn’t work for Jo-Trux. It will, however, cause some "sucks.com" owners to either remove their sites or change the site names.
Finally, a trademark owner can take legal action. There are two options. That these two routes will not necessarily lead to the same conclusion illustrates how the Internet can and has lead to inconsistent and seemingly conflicting laws.
The first option involves the Lanham Act-- the federal trademark laws. The second option is to use the Uniform Domain Name Dispute Resolution Policy (UDRP) adopted by the Internet Corporation for Assigned Names and Numbers (ICANN). The UDRP is interpreted and applied by mediators and arbitrators from the World Intellectual Property Organization (WIPO) and other organizations.
The differences in outcome come about because the two sets of rules were written and are applied by different groups for different purposes.
The lawsuits and arbitration hearings that
exist regarding the "sucks.com" websites do not expand to issues such as
defamation, although perhaps they could. They deal specifically with the
use of plaintiffs’ trademarks as part of defendants’ domain names. The
actual content of the websites has not been at issue in these contests,
and it is not the focus of this paper.
II. THE LANHAM ACT AS IT APPLIES TO DOMAIN NAME DISPUTES
The Lanham Act was originally enacted as the Trademark Act of 1946. It has been amended several times. It is codified at 15 U.S.C. §§ 1051-1127.1
The Lanham Act provides remedies for both trademark infringement and trademark dilution. There is now, in addition, the Anticybersquatting Consumer Protection Act of 1999.2 These are all discussed below.
In order to establish infringement, a plaintiff
must first show its own actual trademark use. That is, it cannot simply
register and then warehouse a trademark in hopes of some day bringing an
infringement suit. The plaintiff must also show that the trademark is distinctive.
Finally, it must show that the defendant’s use of a mark is non-functional.
A mark is non-functional when it is not inherent to the purpose or description
of what it is representing. (For example, "bandage" is functional; "Band-Aid"
is non-functional.)
A dilution case involves use of a mark in a "commercial context." This means that the use in question must actually be in the stream of commerce and could therefore make a profit for the user.
Dilution deals with marks as a "source indicators." This term refers to the ability of a mark to identify a user and/or its products and services. One of the most important aspects of using marks as source indicators is the reputation of a user and how that affects the public’s perception of the mark.
Dilution occurs when a junior user uses a senior trademark user’s mark in a commercial context in a way that lessens the power of the senior user’s mark as a source indicator.4
There are two forms of dilution.
The first is dilution by tarnishment, which is the diminishing of the power of the senior user’s mark because of its association with the negative aspects or connotations of the junior user’s use of the mark.
The second is dilution by blurring, which is when the power of the senior user’s mark is decreased because of the blurring of the mark’s distinctive quality caused by the existence of the junior user’s mark.
In a dilution cause of action, the plaintiff must show that its mark is famous and that the junior user is using its mark in a commercial context. In order to determine whether a mark is famous, Congress set out eight nonexclusive factors that a court may consider.5
There are three uses that Congress made non-actionable under the dilution section of the Lanham Act. They are, briefly, fair use of a famous mark for comparative advertising or promotion, noncommercial use, and all forms of news reporting and commentary.6
The first difference is that the plaintiff’s mark need not be famous. It need only be protected.7
A plaintiff can establish liability by showing the following. The plaintiff must show that the defendant has a bad faith intent to profit from the mark. The plaintiff must also show that the defendant has registered, trafficked in, or uses a domain name that is identical to, confusingly similar to, or in the case of a famous mark, is dilutive of the plaintiff’s mark.8 Congress provided nine non-exclusive factors for a court to consider in order to determine bad faith under this section.9
The ACPA applies not only to protected marks, but also to protected personal names.10 The Cyberpiracy Protection for Individuals Act,11 which applies specifically to "any person who registers a domain name that consists of the name of another living person, or a name substantially and confusingly similar thereto, without that person’s consent, with the specific intent to profit from such name by selling the domain name. . ."12
Generally, the remedy for a trademark violation
is injunctive. In the case of the ACPA, Congress allowed courts to order
the cancellation or forfeiture of domain names that violate the trademark
owner’s rights.13
To date, there have been two "sucks.com" cases decided under the Lanham Act. It is very unlikely that there will be any more.
In Bally Total Fitness Holding Corp. v. Faber,14 Bally brought a trademark infringement and dilution suit against Faber after Faber created and registered a website called www.compupix.com/ballysucks. This site, which no longer exists, was dedicated to complaints about Bally. The case was resolved before the ACPA was enacted.
The court immediately concluded that there was no likelihood of confusion between Bally and Ballysucks.com because they are not "related goods" and dismissed the infringement claim.
Although the court dismissed the infringement claim, it still discussed how the case would come out under the most common likelihood of confusion test, found in AMF Inc. v. Sleekcraft Boats.15 The court most likely did this because this was the first case of its kind and the court wanted to establish some official position on the matter.
The Sleekcraft test uses eight factors to determine whether a defendant’s use of a plaintiff’s trademark creates a likelihood of confusion. The factors are:
Strength of the markThe court found that Bally has strong marks, as evidenced by the amount of money spent on advertising and the fact that no other health club company uses the Bally mark. This factor came out in favor of Bally.
Proximity of the goods
Similarity of the marks
Evidence of confusion
Marketing channels used
Type of goods and the degree of care likely to be exercised by the purchaser
Defendant’s intent in selecting the mark
Likelihood of expansion of the product lines16
The court found that the similarity of marks factor leaned in favor of Faber. Bally argued that the marks are identical or that adding "sucks" on the end of "Bally" is a minor change. The court found that "sucks" is such a loaded and negative word that the attachment of it to another word cannot be considered a minor change.
Bally asserted that the goods were in close proximity because both used the Internet and because it had a complaint section on its own website. The court found, however, that the sites did not compete, even though they were both on the Internet. This is because Bally’s is a commercial site while Faber’s site is for the purpose of consumer commentary. The factor leaned in favor of Faber.
Bally presented no evidence of actual confusion. Bally argued that the confusion would be patently obvious due to the similarity of the marks. The court, however, found that a reasonably prudent user would not mistake Faber’s site and the official Bally’s site. This factor leaned in favor of Faber.
Bally argued that the marketing channels used, namely the Internet, were identical. The court found that the overlap of marketing channels was irrelevant because Faber’s site was not a commercial use of the mark. This factor was neutral or slightly in favor of Faber.
Bally argues that an Internet user may accidentally access Faber’s site when searching for Bally’s site on the web. The court dismissed this because Faber does not actually use Bally’s trademark. It further points out that an Internet user searching with a search engine may want all the information available on Bally’s and is entitled to more than Bally’s own site. This factor leaned in favor of Faber.
The court found, and Bally agreed to some extent, that in the context of consumer commentary, Faber was entitled to use Bally’s mark. In fact, he had to use Bally’s mark in some way to identify what he was criticizing. This factor was neutral.
Bally conceded that there was no likelihood of the two parties expanding into each other’s lines of business. For this reason, the last factor leaned in favor of Faber.17
In concluding its discussion of likelihood of confusion, the court stated that "applying Bally’s argument would extend trademark protection to eclipse First Amendment rights. The courts, however, have rejected this approach by holding that trademark rights may be limited by First Amendment concerns."18
Under the dilution claim, Bally argued that there was dilution by tarnishment because Faber also had pornographic websites linked from the compupix.com site.
The court found that Faber had engaged in no commercial use of the Bally name due to the nature of the website. The court also concluded that there was no tarnishment. In so deciding, the court said that if tarnishment existed in this case, "it would be an impossible task to determine dilution on the Internet."19 The court went on to point out that to include "linked sites as grounds for finding commercial use or dilution would extend the statute far beyond its intended purpose of protecting trademark owners from use that have the effect of ‘lessening. . . the capacity of a famous mark to identify and distinguish goods or services.’"20
For these reasons, the court ruled in favor of Faber.
In the other "sucks.com" Lanham Act, Lucent Technologies, Inc. v. Lucentsucks.com,21 the court did not get beyond the jurisdictional issues to reach the merits. However, the court acknowledged in dicta that had the case reached the merits, the court probably would have reached a decision similar the one reached in Bally.22
The remaining "sucks.com" cases have been decided under the UDRP.
On October 24, 1999, ICANN adopted its Uniform Domain Name Dispute Resolution Policy.23 Since then, the UDRP has been used by domain name dispute resolution panels, most notably those associated with WIPO, to rule on domain name disputes. A number of these disputes have involved "sucks.com" websites.
Part of the registration process for a getting a domain name includes acceptance of the UDRP. A domain name owner can lose its rights to the domain name if it violates the UDRP.24
Section 4 of the UDRP explains the mandatory administrative proceeding that any domain name owner could be subject to. This proceeding occurs when a third party complainant asserts that the domain name owner has used a domain name that is identical or confusingly similar to the complainant’s mark, that the domain name owner does not have rights or legitimate interests in the name, and that the domain name has been registered and used in bad faith.25
The UDRP lists four non-exclusive factors to be considered in determining bad faith.26
The remedies sought in a UDRP proceedings are the cancellation of the domain name or the transfer of the domain name to the complainant owner of the mark.27
The UDRP proceeding does not prevent its loser from taking the case to court following the conclusion of the proceeding.28
A number of "sucks.com" cases have been heard by panels using the UDRP’s mandatory administrative procedure. These hearings have come out strongly in the opposite direction from the court cases under the Lanham Act.
At one point, in fact, nine of the eleven "sucks.com" cases heard under the UDRP, had been decided in favor of the original mark owner, with the other two hearings awaiting decisions.29
A notable recent example of a UDRP hearing is Diageo plc v. John Zuccarini, Individually and t/a Cupcake Patrol.30 Diageo, formerly known as Guinness plc, the owner of the company and brewery that produces Guinness beer, brought this proceeding against Zuccarini after Zuccarini registered eleven domain names, all variations on the theme of "Guinness beer sucks."31
Previously, Diageo had brought a hearing against Zuccarini for his registration of guinnes.com. It claimed that Zuccarini’s registration of the eleven Guinness _____sucks.com sites were in direct retaliation for its having done this.32
In deciding on Zuccarini’s liability, the panel33 first looked at the question of whether the domain names were identical or confusingly similar to Diageo’s mark. Because the marks were not identical, the panel looked to whether they were confusingly similar. The panel decided that the domain names were confusingly similar. In doing so, it relied on precedent from a previous hearing in which a panel held that "the confusingly similar test may be held to a different standard when used with Internet search engines."34
The panel also used the same Sleekcraft test for likelihood of confusion that the court used in Bally.35 However, the panel acknowledged that there were some difficulties in applying the test to a domain name dispute. Nevertheless, because neither party objected, the test was used.36
The panel found that Diageo had a very strong mark.
The panel found that although the parties were in different line of trade, the fact that there were beer references in a number of Zuccarini’s domain names was enough to establish some kind of proximity.
The panel found that because the word "guinness" appeared at the beginning of each of the domain names, there was at least some similarity between the marks.
There was no evidence of actual confusion. However, the panel found that it was unrealistic to require such evidence, especially because Zuccarini’s domain names had not actually been used for active websites.
When considering the marketing channels, the panel again pointed out the distinction between trademarks and domain names. It did accept, however, the assertion that a search using a search engine would likely point out the domain names in dispute.
The panel was unsure of how to interpret the question of the degree care exercised by the purchaser. Of particular concern was the fact that "sucks" is an American slang word and may not be familiar to all English speakers, let alone all Internet users. Because of this, the panel envisioned "circumstances where Internet users are not aware of the abusive connotations of the word and consequently associate the domain name with the owner of the trademark."37
The panel found that Zuccarini had no legitimate reason to select the marks to use for the domain name and that there was no evidence of any likelihood that either party would expand its product lines.
Based on its consideration of the UDRP standards and the Sleekcraft factors, the panel decided that Zuccarini had no legitimate interest in the Guinness name, and that his registering the "sucks.com" websites was primarily to disrupt Diageo’s business and was therefore done in bad faith.38
Based on its findings, the panel ordered that all eleven domain names be transferred to Diageo.39
While the panel did decide in favor of the Diageo, it did so at least in part because Zuccarini made no response to Diageo’s allegations, which the panel felt established prima facie cases for the elements needed under the UDRP.40
The Bally court focused in the end on
the fact that First Amendment rights trump Trademark law. The panel in
this case was more concerned by the fact that a test designed for trademark
law was used in a decision also involving domain names, stating that "it
is obvious that there remains many areas of doubt as to how the various
elements of the test can be transposed in its application to disputes involving
a comparison of domain names and trademarks."41
The "sucks.com" problem arose because the law could not keep up with technological advances of the Internet. According to Jonathan Turner, "Corporate anti-sites appeared and then multiplied on the Internet before any clear legal precedents could be set for determining their legitimacy."42
A perfect example of this is the situation that occurred between Scott Harrison and Chase Manhattan Bank. Chase accidentally added a charge to Harrison’s credit card bill and Harrison had a hard time getting the charge off his account.43 Upset by this, Harrison created chasebanksucks.com, a site dedicated to complaints about different aspects of the bank. The site receives between 200 and 250 hits per day, and more than 600 people have added complaints to the site.44 When Chase sent a letter to Harrison threatening a lawsuit if he did not take down the suit, Harrison replied that because he was not using any of Chase’s logos, he was not violating any trademark laws. Eventually, Chase gave up on the matter, and began simply monitoring the website for "legitimate customer complaints."45 According to a spokesman for Chase, the bank "sent the letter raising the trademark issues, and [Harrison] basically disregarded that. There isn’t really anything else we can do on the matter."46
Had Chase Bank taken Harrison to court, it would likely have lost. Had it opted for a UDRP hearing, it would surely have won. So why this difference? And more importantly, why does the Internet change things?
The difference between outcomes is likely due in large part to the differences between the institutions that released them. The courts’ function is to uphold the law. They are concerned first and foremost with things like the First Amendment. And they try to fit things within existing law. The agencies that wrote and apply the UDRP are concerned with making commerce run smoothly on the Internet. They are more aware of the needs of the Internet age but less comfortable applying the traditional laws of our country. This creates the gap between the two forms of resolution. This makes it possible for two very similar cases to be decided in opposite ways.
But what is it about the Internet that causes so many problems? There are many things. The Internet makes everything bigger, faster, and more encompassing.
Suppose Tom Banks had taken out a full-page ad in his local newspaper to complain about his experiences with Jo-Trux. People would see it, just like people saw his website. People might feel compelled to join him in his protest against the company, just like they added their own stories to jo-truxsucks.com.
But there would be no likelihood of confusion. People would not stumble upon his ad and mistake it for a Jo-Trux ad. And his audience would not be the entire world.
These are the things that make the Internet different. These are the things that make it hard to apply traditional Trademark law to a domain name case.
These are the things that lead WIPO panels
to find for the plaintiff every time.
1 For text, see, i.e., http://www.bitlaw.com/source/15usc/1125.html.
2 The ACPA, enacted late in 1999, is codified at 15 U.S.C. 1125(d). See http://www.bitlaw.com/source/15usc/1125.html.
3 15 U.S.C. 1114(1)(a) & (b). See http://www.bitlaw.com/source/15usc/1114.html.
4 15 U.S.C. 1125(c). See http://www.bitlaw.com/source/15usc/1125.html.
5 These factors are set out in 15 U.S.C. 1125(c)(1)(A)-(H). See http://www.bitlaw.com/source/15usc/1125.html.
6 15 U.S.C. 1125(c)(4)(A)-(C). See http://www.bitlaw.com/source/15usc/1125.html.
7 15 U.S.C. 1125(d)(1)(A). See http://www.bitlaw.com/source/15usc/1125.html.
8 Id.
9 15 U.S.C. 1125(d)(1)(B)(i)(I)-(IX). See http://www.bitlaw.com/source/15usc/1125.html.
10 15 U.S.C. 1125(d)(1)(A). See http://www.bitlaw.com/source/15usc/1125.html.
11 15 U.S.C. 1129 See http://www.bitlaw.com/source/15usc/1129.html.
12 15 U.S.C. 1129(1)(A). See http://www.bitlaw.com/source/15usc/1129.html.
13 15 U.S.C. 1125(d)(1)(C). See http://www.bitlaw.com/source/15usc/1125.html.
14 29 F.Supp.2d 1161 (C.D. Cal. 1998). See http://www.bartonbeebe.com/Tmcourse/Bally.htm
15 599 F.2d 341 (9th Cir. 1979). See http://cyber.law.harvard.edu/metaschool/fisher/domain/tmcases/amf.htm.
16 For the court’s discussion of the factors, see Bally. 29 F.Supp.2d 1161 (C.D. Cal. 1998). See http://www.bartonbeebe.com/Tmcourse/Bally.htm.
17 Id.
18 Id.
19 Id.
20 Id.
21 95 F.Supp.2d. 528 (E.D. Va. 2000).
22 Id.
23 See http://www.icann.org/udrp/udrp-policy-24oct99.htm.
24 UDRP § 3. See http://www.icann.org/udrp/udrp-policy-24oct99.htm.
25 UDRP § 4(a.). See http://www.icann.org/udrp/udrp-policy-24oct99.htm.
26 UDRP § 4(b.)(i)-(iv). See http://www.icann.org/udrp/udrp-policy-24oct99.htm.
27 UDRP § 4(i.) See http://www.icann.org/udrp/udrp-policy-24oct99.htm.
28 UDRP § 4(k.) See http://www.icann.org/udrp/udrp-policy-24oct99.htm.
29 Gwendolyn Mariano and Evan Hansen, Parody Sites Sucked Into Cybersquatting Squabbles, CNET News.com, August 25, 2000. See http://www.singapore.cnet.com/news/2000/08/25/20000825g.html.
30 D2000–0996 (WIPO October 22, 2000). See http://arbiter.wipo.int/domains/decisions/html/2000/d2000-0996.html.
31
32 Interestingly, Diageo itself owns the domain name guinnesssucks.com. See http://arbiter.wipo.int/domains/decisions/html/2000/d2000-0996.html.
33 The panel was actually made up of only one person. See http://arbiter.wipo.int/domains/decisions/html/2000/d2000-0996.html.
34 Wal-mart Stores, Inc. v. Walsucks and Walmarket Puerto Rico, D2000-0477 (WIPO July 20, 2000). This was the first “sucks.com” case heard under the UDRP. See http://arbiter.wipo.int/domains/decisions/html/2000/d2000-0477.html.
35 Sleekcraft, 599 F.2d 341 (9th Cir. 1979). See http://cyber.law.harvard.edu/metaschool/fisher/domain/tmcases/amf.htm.
36 For discussion of the test, see Diageo. See http://arbiter.wipo.int/domains/decisions/html/2000/d2000-0996.html.
37 Diageo. See http://arbiter.wipo.int/domains/decisions/html/2000/d2000-0996.html.
38 Id. See http://arbiter.wipo.int/domains/decisions/html/2000/d2000-0996.html.
39 Id. See http://arbiter.wipo.int/domains/decisions/html/2000/d2000-0996.html.
40 45 Id. See http://arbiter.wipo.int/domains/decisions/html/2000/d2000-0996.html.
41 Id. See http://arbiter.wipo.int/domains/decisions/html/2000/d2000-0996.html.
42 Jonathan Turner, Bank v. BankSucks.com, OnMoney.com. See http://netbank.onmoney.com/editorial/banking/chase_sucks_step4.html.
43 Id. See http://netbank.onmoney.com/editorial/banking/chase_sucks_step1.html.
44 Id. See http://netbank.onmoney.com/editorial/banking/chase_sucks_step1.html.
45 Id. See http://netbank.onmoney.com/editorial/banking/chase_sucks_step3.html.
46 Id. See http://netbank.onmoney.com/editorial/banking/chase_sucks_step3.html.