3 Ways to Defend Against A Cybersquatting Lawsuit
Cybersquatting—also known as cyberpiracy—is the bad faith registration of a trademarked internet domain name with the intent to profit from the mark’s goodwill. One example is when a company buys a domain that includes a competitor’s trademarked name and then redirects traffic to that domain to its own website—think a shoe company registering nike.org and redirecting visitors to its own site. Another example is if that same shoe company created a website on the nike.org domain through which it sold its own shoes. Registering and redirecting domains containing potential misspellings or typos—such as redirecting starbuks.com to the website of another coffee seller—can also constitute cybersquatting.
Cybersquatting falls under the umbrella of the Lanham Act and is prohibited by the Anticybersquatting Consumer Protection Act (ACPA), which provides for a cause of action against cybersquatters. A successful lawsuit under the ACPA allows trademark owners to gain ownership of the domain at issue and receive monetary damages. However, not every lawsuit asserting what might appear to be a plausible cybersquatting claim has merit. If your company gets hit with an ACPA cybersquatting lawsuit, here are three defenses that may be applicable.
1. The plaintiff does not have a valid trademark: Under the ACPA, a plaintiff must have IP rights in the mark at issue to bring a cause of action against a registrant of an identical of confusingly similar domain name. You can defend against a cybersquatting lawsuit by showing that the plaintiff doesn’t actually own the trademark—either because the mark wasn’t federally registered, isn’t otherwise distinctive or famous, or is owned by a person or entity separate from the plaintiff.
2. The domain wasn’t registered in bad faith: A domain name registrant must have had a bad faith intent to profit from the mark to be liable under the ACAP. Showing, for example, that your use of the mark was noncommercial is one way to demonstrate that you did not have a bad faith intent to profit from it. Another is to show that you previously used the domain in connection with the bona fide offering of goods or services.
3. There were no damages caused by the cybersquatting: Even if you did engage in cybersquatting—perhaps you didn’t even realize doing so was prohibited—the damages you owe will depend on whether the plaintiff can show that you made profits from your use of the domain (or that the plaintiff sustained losses from such use). For example, even if you sold your own products on the domain at issue, did anyone actually buy any of them? While the ACPA provides for statutory damages (of between $10,000 and $100,000) just for violating the statute, a plaintiff will have trouble walking away with more than that without being able to show any actual damages.
Because of the fact-specific nature of cybersquatting litigation, it’s a good idea to consult with an IP attorney should you get hit with actual or threatened lawsuit. Our firm regularly litigates and advises on cybersquatting issues. Feel free to contact us if we can be of help.