Domain Names and Trademarks on the Internet

• Author: Jonathan S. Jennings
• Pages: 89-138

89

Chapter 3

Domain Names and

Trademarks on the Internet

Jonathan S. Jennings1

I. INTRODUCTION

A. OVERVIEW

The Internet has become a fixture of everyday life and commerce and is

potentially accessed by billions of people each day. For the relatively small

fee for registering a domain name and posting content on a web page, a

business is able instantly to increase its customer base and to reach con-

sumers around the world. Social media also now must be considered with

all marketing strategies and is extremely easy to engage. The easy access

to commercial viability presented by websites and social media, and the

disregard for geographic boundaries, underscores the importance for busi-

ness owners, such as franchisors, to control and protect their trademarks

in this ever-changing medium.

To ensure that a domain name can be protectable under trademark law,

the mark owner has the obligation to protect the goodwill in its investment

by both maintaining the quality of the goods or services it markets through

websites employing the domain names and guarding against infringements

that might impact its rights. In particular, trademark owners, such as

franchisors, need to control the use of their trademarks on the Internet

(whether within domain names or on the websites themselves) by licensed

users, such as franchisees, or others.

Disputes between franchisors and franchisees occur over domain names

and the use of marks on websites. Usually these disputes involve good-

faith disagreements about the meaning and application of the terms in the

franchise agreement or, for an older franchise agreement still in effect, the

absence of terms dealing with the subject. The more infamous disputes

1. The author wishes to thank Kristine Bergman, an associate at Pattishall, McAuliffe,

Newbury, Hilliard & Geraldson LLP, for her scholarly assistance in the preparation of this

chapter.

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90 • The Intellectual Property Handbook

concern cybersquatters, which can involve a franchisee if the use of the

domain name at issue is clearly in bad faith. For example, a franchisee might

be deemed to be a cybersquatter if it registered and used a domain name

incorporating a franchisor’s mark after the termination of the franchise agree-

ment. More likely, the cybersquatter is a third party looking to trade off the

interests of both the franchisor and franchisee. Cybersquatters usually look

to register and use a domain name incorporating the name of a well-known

person or established business to divert and attract business to their own

sites at the expense of the goodwill of the legitimate owner. Cybersquatters

often put the domain names they acquire up for auction, or offer them for

sale directly to the mark owner, at prices far beyond the cost of registra-

tion. Trademark owners can stop cybersquatters through arbitration under

the Uniform Domain Name Dispute Resolution Policy (UDRP) or the Uniform

Rapid Suspension System (URS). In addition, they can file a civil action in the

United States under the Anticybersquatting Consumer Protection Act (ACPA).

Trademark disputes can also arise over the use of a mark on a website.

A civil action filed under the federal trademark law (the Lanham Act) is an

option to stop the infringing use of marks on the Internet, irrespective of

whether they are also incorporated within domain names. A related use of

trademarks in cyberspace is through keywords, which have become a pop-

ular means of attracting traffic to websites. The sale of keywords by search

engines such as Google has created some disputes over the scope of trade-

mark rights, but these have dissipated in recent years. Finally, social media

has become the focus of many companies and trademark issues and dis-

putes on this platform are increasingly common. Companies need to have

a plan in place not only to protect their brand in social media, but also to

avoid violating the rights of others.

As our communities become increasingly global in scope and society

becomes more reliant on digital technology and transactions, and as tra-

ditional geographic boundaries become less significant, the Internet has

become an integral part of doing business. Social media, in particular, is

rewriting how companies interact with their consumers. This chapter pro-

vides an overview of some of the challenges that arise in connection with

the use and protection of trademarks and domain names on the Internet

and how to cope with them effectively.

B. TRADEMARKS AND SERVICE MARKS

To understand the scope of rights in a domain name, one must understand

the fundamentals of trademark law. These fundamentals are discussed in

Chapter 1.

C. DOMAIN NAMES

A domain name is technically part of a Uniform Resource Locator (URL), an

Internet address at which a website is located. Section 45 of the Lanham Act

defines a domain name as “any alphanumeric designation that is registered

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I. Introduction • 91

with or assigned by any domain name registrar, domain name registry, or

other domain name registration authority as part of an electronic address

on the Internet.” It is important to understand that obtaining and/or using

a domain name (1) is not a substitute for securing trademark rights (which

is usually accomplished by a combination of actual use as a mark in

commerce and/or federal registration after an examination process) and

(2) does not, in and of itself, create or establish any trademark rights

merely by its use as an Internet address. The federal trademark and domain

name registration systems exist independently with no cross-checking of

the other database prior to registration.

Moreover, a trademark owner does not have an absolute right to

a domain name consisting of its mark, in whole or in part. On the other

hand, as will be seen, a trademark owner’s rights can legally prevail over

a domain name registration. A good step in protecting a domain name is

also to protect any underlying trademark rights in that domain name. If a

domain name cannot be protected under trademark law, it generally will

not be possible to stop another from using a similar domain name.

A domain name is composed of two parts, the top-level domain name

(TLD), often referred to as the (generic) gTLD, and the second-level

domain name. The top-level domain name is the part that comes after the

dot (e.g., “.com”). The second-level domain name—for example, “yahoo”

or “realestate”—is the part that comes before the period and the top-level

(or country code) domain name. Together, the two levels constitute what

is commonly referred to as the domain name—for example, “yahoo.com”

or “realestate.net.” Because owning a brand as a top-level domain name

is very expensive (e.g., .google), most franchisors look to protect marks

through the second-level domain names.

The second-level component can include the following:

• An existing trademark with primary brand significance—for exam-

ple, “buick.com.”

• An existing trademark but with an alternative dictionary meaning—

for example, “united.com.”

• A combination of a trademark and other words—for example,

“driveabuick.com.”

• An ordinary, generic, or descriptive word—for example, “ restaurant.

com.”

• A letter string that may or may not be an abbreviation of a famous

entity—for example, “ibm.com” (which could refer to International

Business Machines or Inland Boat Manufacturing).

• A meaningless letter string, which may not yet be a trademark but

theoretically could be one—for example, “xyz123.com.”

Thus, domain names present a series of difficult challenges vis-à-vis tra-

ditional trademark analysis. The primary issues are that, unlike trademarks,

domain names are registered and can exist apart from a connection to any

goods or services, and cannot be differentiated by any graphic elements.

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