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Remedies for Cybersquatting: Comparison of the UDRP and ACPA

Written by Jamison Arterton

Last month, the kitchen and bath giant, Kohler Co., filed an anti-cybersquatting suit in federal court in California against several cybersquatters.  In its complaint, Kohler alleges that it previously paid the named defendants $500 to transfer a domain name incorporating the KOHLER trademark in exchange for their agreement that they would not register any additional domain names containing the KOHLER mark in the future.  Despite this agreement, according to the complaint, the defendants subsequently registered four additional infringing domain names and demanded a payment of $1000 for their transfer.

Kohler is not alone in its decision to seek monetary damages in federal court rather than the transfer of the domain names pursuant to the Uniform Domain Name Dispute Resolution Policy (UDRP).  Trademark owners continue to use the Lanham Act as a means of both reclaiming improperly registered domain names and, hopefully, deterring future infringement.  In July, for example, Facebook filed a complaint against 23 defendants and John Does 1-119 for cybersquatting, contributory cybersquatting, trademark infringement, contributory trademark infringement, false designation of origin and contributory false designation, trademark dilution and contributory trademark dilution, breach of contract and tortuous interference with economic advantage.  Facebook has also used (when appropriate) the UDRP system to secure the transfer of numerous infringing domain names that contained typographical errors of the FACEBOOK trademark.

These recent cases highlight the limitations of the UDRP.  UDRP proceedings are favored as a quick and relatively inexpensive way to handle domain name disputes, with filing fees ranging from $1,500 to $5,000 depending on the number of domain names involved and resolution generally within sixty (60) days of filing.  However, while the UDRP system allows a complainant to file a single complaint against a respondent concerning multiple domain names, it does not permit a trademark owner to seek the transfer of multiple domain names owned by multiple registrants.  Nor does it grant relief beyond awarding the transfer of the subject domain name to the complaining party/trademark holder.  In contrast, actual and/or statutory damages, injunctive relief and attorneys’ fees may be available through litigation.  While monetary remedies available only through litigation traditionally have provided a greater deterrent and potentially prevented serial cybersquatters from registering additional domain names that include famous and/or well-known trademarks, this may, however, be changing.  With the introduction of the .XXX gTLD, repeat cybersquatters may be banned from future registration of .XXX domain names.  A similar policy applied to other gTLDs could provide the UDRP system with the proverbial “stick” that complainants presently seek from the courts against serial cybersquatters.

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Geri Haight is a Mintz Member and former in-house counsel who focuses on employment litigation, counseling, and compliance, as well as intellectual property and trade secret matters.