Domain Names and Trademark Law

Domain Names and Trademark Law

Choosing a domain name is simple. If it is memorable, pronounceable, short, clever, easily spelled, and suggests the nature of the commerce on your website, you’ve got a winner.

But even if your choice is brilliant from a marketing standpoint, it may be worse than foolish from a legal perspective. Your name is at risk if it conflicts with any of the millions of existing commercial names. It’s a big risk. If you put money and sweat into your website under one domain name and then are forced to give it up, your Web-based business will suffer a damaging blow.

The rules for understanding legal conflicts come from trademark law. Here are the basics:

  • Names that identify products or services in the marketplace are trademarks.
  • Distinctive trademarks are protected under federal and state law.
  • Distinctive business and domain names usually qualify as trademarks.
  • The first commercial user of a trademark owns it in case of a legal conflict with a later user.
  • One trademark conflicts with another when their use is likely to confuse customers about the products or services.
  • If a legal conflict is found, the later user will have to stop using the mark and may be held liable to the trademark owner for damages.

Customer confusion

Applying these principles to your domain name selection, you risk losing your chosen domain name if the owner of an existing trademark convinces a judge or arbitrator that your use of the domain name creates a likelihood of customer confusion. Confusion can mean two things:

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Most commonly, it means that the customer buys different goods or services than intended. For example, suppose you want to buy Lee’s famous Flamebrain barbecue sauce but accidentally enter “flamerbrain.com” instead of “flamebrain.com”. You order the wrong product from the wrong website without realizing it.

The other kind of confusion occurs when a misleading name causes customers to wrongly believe that a product or service is connected with a business they already know about. For instance, if you took your TV to a repair shop called IBM Electronics because you thought that IBM sponsored the business.

Confusion is a problem only when the names at issue are distinctive. A name may be distinctive because it is made up, arbitrary, fanciful, or suggestive of the underlying product or service. If the trademark owner has registered a name with the U.S. Patent and Trademark Office, it is probably distinctive.

Names that aren’t distinctive don’t qualify for trademark protection. Many domain names are potentially powerful but generic. That is, they are the names of whole categories of products or services. Domain names that use surnames, geographic names, or common words that describe aspects of the goods or services sold on the website are also ineligible for trademark protection.

Avoiding trouble

To choose a domain name that satisfies your marketing needs and doesn’t infringe on anyone else’s trademark rights, search as many existing trademarks as possible, spot possible conflicts, and then pick a name that’s unlikely to generate a legal challenge.

  • The first place to search for conflicts is the trademark database of the U.S. Patent and Trademark Office at http://www.uspto.gov. Search for your proposed mark and similar marks.
  • In addition, search the Internet and any business name registers, such as Thomas Register Online at http://www.thomasregister.com.
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If your search finds names that are the same or similar to your proposed domain name, ask yourself these questions:

  • Does your website offer competing goods or services?
  • Does your website offer goods or services distributed in the same channels as the other name?
  • Might your website divert business away from the other name?
  • Is the other name very well known?

If the answers to these questions are no, you can use your name without fear of a legal conflict. If you answer yes to any of them, there will be some risk of a legal challenge. If you aren’t sure, ask your friends for their opinion.

Another option is to consult a trademark attorney. However, keep in mind that attorneys tend to be more conservative than necessary. They can provide guidance on reserving, using, and enforcing trademarks.

Watch out for domain name bullies

Sometimes a powerful company tries to force a smaller one to give up a domain name that was legally acquired by the smaller company. Because trademark conflicts are resolved in court, a business that can afford lawyers has an advantage and can sue the smaller company for trademark infringement.

When the smaller company realizes that it will cost a lot to defend the suit, the big company proposes a settlement where the small company gives up the name for a small sum. In other words, the powerful company gets what it wants simply because the court system is unfair to those who can’t afford attorneys.

There are strategies to fight this kind of bullying. If the small company has the resources, it can mount a defense and win. Additionally, the internet community is hostile to online bullies, and out-of-court campaigns can make bullies back down. For more information, visit the Domain Name Rights Coalition.

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