Internet outlaws: knowingly placing ads on parked domain names invokes contributory trademark liability.

• Author: Strombom, Ariane C.

INTRODUCTION I. TRADEMARKS AND THE INTERNET A. Trademark Law B. Traditional Contributory Infringement II. ONLINE TRADEMARK INFRINGEMENT: DIRECT AND CONTRIBUTORY INFRINGEMENT ONLINE A. Trademarks within the Online Context B. Trademark Infringement Online 1. To What Parties is Online Trademark Liability Subscribed? a. Registrars: Universally Protected from Trademark Liability under U.S. Law b. Registrants: Traditionally Held Liable for Trademark Infringement for Cybersquatting C. Contributory Trademark Infringement Online III. AD PARKER LIABILITY ONLINE A. Ad Parker Direct Infringement Liability B. Ad Parker Contributory Infringement Liability CONCLUSION INTRODUCTION

A theory of trademark liability for domain name registrants--who register domain names that incorporate registered trademarks they do not own--is clearly established in the United States. However, it is also clearly established that registrars, who govern the distribution of domain names, have no liability when domain names are used for illegal activity.

While the liability of these two essential parties related to website registration is clear, to date, little research exists regarding whether the parties that actually facilitate the monetization of trademark-infringing website registration are somehow liable for intellectual property infringement themselves. Drawing on the established frameworks holding registrants liable for online trademark violations in the United States, this Comment encourages a framework of contributory trademark liability for "advertisement parkers" ("ad parkers"), those organizations that facilitate revenue generation through the placement of advertisements on parked, cybersquatted domain names.

In examining whether the advertisers paying for links on parked, cybersquatted pages are contributorily liable for trademark infringement, this Comment examines relevant case law, from Lockheed Martin Corp. v. Network Solutions, Inc., to Tiffany, Inc. v. eBay, Inc., as well as relevant federal statutes. First, I address trademark law in the United States generally; second, I evaluate trademarks, trademark infringement, and contributory trademark infringement in an online context; and third, I argue that contributory trademark infringement should apply to organizations that facilitate ad placement on parked, cybersquatted domain names.

1. TRADEMARKS AND THE INTERNET

   1. Trademark Law

      It is a "traditionally accepted premise that the only legally relevant function of a trademark is to impart information as to the source or sponsorship of the product." (1) However, trademark law is now used not only to protect the source of an item against confusion, but also to protect against a range of harms, especially online, including dilution of a source's true identity in the marketplace through the registration of domain names.

      In the United States, trademarks are often protected online by invoking rights provided by the Federal Trademark Dilution Act of 1995, (2) which has now been incorporated into the United States' Anti-Cybersquatting Consumer Protection Act (3) ("ACPA") within the Lanham Act. (4)

      Two types of trademark claims are raised in domain name disputes: trademark infringement and trademark dilution. (5) A mark owner may complain of infringement if the mark is being used by someone other than the owner in a way that is likely to cause confusion among consumers. (6) In trademark dilution claims, the trademark owner does not have to prove likelihood of confusion among consumers, but does have to show dilution of the distinctive source-identifying quality of the mark. (7) To qualify as dilution, the mark must be "famous," defined as having achieved fame among the general public (in other words, the mark is instantly recognizable in a source-identifying way by the general public); and the use must have diluted the quality of the mark by blurring or tarnishing the mark through association with other things that are not associated with the mark owner's products or services. (8)

      Trademark dilution is significantly more difficult to show because of the requirement that the mark is famous; few brands reach that level of recognition. The focus of cybersquatting and parking advertisements on particular domain names is to capitalize on the value of the mark, not to use the mark to encourage the purchase or advertisement of other products not associated with the mark. Therefore, this paper focuses solely on trademark infringement.

   2. Traditional Contributory Infringement

      This paper specifically addresses on contributory trademark infringement, as advertisers may be liable due to the infringing nature of the domain names upon which their advertisements are placed. However, in the United States, contributory trademark liability was developed pre-Internet, and similar to the online implementation of the general trademark liability framework, courts initially struggled to establish a bright line rule for contributory infringement on the Internet. A standard for Internet cases is still evolving, but the frameworks used to govern online disputes tend to incorporate an evaluation of bad faith. (9)

      In Inwood Laboratories v. Ives Laboratories, the Supreme Court of the United States established the rule for contributory trademark infringement liability. (10) If a party "intentionally induces another to infringe a trademark, or if it continues to supply its product to one whom it knows or has reason to know is engaging in trademark infringement, the [party] is contributorially responsible for any harm done as a result of the deceit." (11) In Hard Rock Cafe Licensing Corp. v. Concession Servs., the Seventh Circuit extended the Inwood rule to landlord relationships, holding that a landlord is responsible for infringement by its tenants if it knows or has reason to know the infringement is occurring. (12)

2. ONLINE TRADEMARK INFRINGEMENT: DIRECT AND CONTRIBUTORY INFRINGEMENT ONLINE

   1. Trademarks within the Online Context

      A domain name is an online address for a website, purchased by a domain name registrant and distributed by a domain name registrar. (13) The Internet Corporation for Assigned Names and Numbers ("ICANN") oversees domain name registrars. (14) "[H]aving a known or deducible domain name is important to companies seeking to do business on the Internet, as well as important to consumers who want to locate those businesses' web sites." (15) However, most businesses use the '.com' top-level domain name, prompting users to "intuitively try to find businesses by typing in the corporate or trade name as the second-level domain." (16) Some savvy users of Internet technology exploit consumers' instinctual behavior for financial gain. Often, these sophisticated users capitalize on well-known trademarks to lure naive users to visit revenue-generating websites with little or no information about the intended website or business.

   2. Trademark Infringement Online

      Two specific types of online trademark infringement exist. (17) Cybersquatting is the act of registering a domain name that contains a trademarked term with the intention of selling the domain name to the owner of the trademark at an unjustly bloated price. (18) Typosquatting occurs when a party registers a domain name that includes an intentionally misspelled famous trademark to capitalize on the recognition of the mark. (19) Typosquatting earns money for the domain name registrant when the registrant places links on the parked site--a website composed of a placeholder page with little content--to earn a fraction of a cent per click or per view for the squatter and/or the organization that facilitates the link placement. (20) Both cybersquatting and typosquatting can be significant income-generators, especially for large-scale squatters who buy and place ads on parked infringing sites by the hundreds. (21) For the purposes of this paper, and for simplicity, typosquatting is incorporated into the cybersquatting umbrella, as "cybersquatting" is sometimes used to refer to the general practice of making money off a trademark-infringing domain name.

      Placing ads on parked domain names is effective for two reasons. First, once a domain name has been purchased, links may be "parked" on a placeholder page to monetize the domain before the developed site is complete and advertised to the public. (22) Second, domain names may be purchased solely for the purpose of posting parked links and generating revenue on a pay-per-click basis. (23) This paper argues that when the second method is performed on cybersquatted domain names, the organization that facilitates the link placement on the parked pages (the "ad parker") should be held liable for contributory trademark infringement.

      Often, "[s]urfing to these Web pages leads site visitors to a screen chock full of pay-per-click advertisements and little meaningful content." (24) However, legitimate uses of domain name parking exist--for example, when a registrant owns the domain name and all related marks or services and is not capitalizing on another's mark or creative content. Further, ad parking can serve to monetize a domain name or provide...