Domain Name with Intentional Misspelling of a Trademark Violates Anticybersquatting Consumer Protection Act
 
October 23, 2001
 

Imagine this scenario: All of your blood, sweat and tears have finally paid off and your business has really taken off. Profits are up, publicity is flowing, and your trademark has become "famous." Your Web site is recording hundreds of thousands of hits per day, many of which result in sales of your merchandise. Suddenly, however, some enterprising individual decides she can profit from your success. She registers five domain names that are only one letter off of yours, or very similar to, your domain name. Web surfers make mistakes, and as they do, they are diverted to the other five sites. They become "captured" there and must either turn off their computers, or "click through" several screens to get out so they can search for your site again. On their way through the screens, they view advertisements for a variety of goods and services. One ad in particular catches their eye, they click on the link, and your site is forgotten, for the moment at least. "Hey," you say, "that's not fair!" What can you do about it? A recent case tells us.

The Anticybersquatting Protection Act (ACPA) became law on November 29, 1999¹, and was intended to prevent "cybersquatting," which has been defined as the bad faith abusive registration and use of the distinctive trademarks of others as Internet domain names, with the intent to profit from the goodwill associated with those trademarks. Under ACPA, successful plaintiffs may recover statutory damages from $1,000 to $100,000 per domain name and also may recover prevailing party attorneys' fees in "exceptional" cases.²

In the recent case of Shields v. Zuccarini,³ the graphic artist who created "Joe Cartoon"(Shields) sued a wholesaler (Zuccarini) who had registered five domain names of various spelling variations to make money off of the famous Joe Cartoon Web site. In 1997, Shields registered joecartoon.com from which consumers could download his animations and purchase his merchandise. In April of 1998, he won the "shock site of the day" award and increased the traffic to his site dramatically. Zuccarini then registered joescartoon.com, joecarton.com, joescartons.com, joescartoons.com and cartoonjoe.com. Each would cause the consumer to get "stuck" until they clicked through several screens to get out of that site. Zuccarini made his money from advertisers on each of the pages through which browsers had to click. Shields sought relief under ACPA as well as under federal and state unfair competition laws, an injunction, statutory damages and attorneys' fees. In order to succeed under ACPA, Shields was required to prove that:

• Joe Cartoon was a distinctive or famous trademark

• Zuccarini's domain names were identical or confusingly similar

• Zuccarini had registered the domain names with the bad-faith intent to profit from them.

• The court found that Joe Cartoon was a famous mark since it had been used for the past 15 years and since the New York Times had run stories on Shields citing Joe Cartoon.

Other factors mentioned by the court were:

• the merchandise had been sold across the country since the early 1990s

• Shields had advertised in an online humor magazine with a circulation of about 1.4 million

• joecartoon.com had received in excess of 700,000 visits per month

• Thus, Joe Cartoon was distinctive and famous, and as such, the trademark and domain name were protected under ACPA.

Zuccarini admitted that he registered his five domain names because they were likely misspellings of famous marks, and the strong similarity between the names convinced the court that they were confusingly similar to Shields' trademark. The court also found that Zuccarini's intent obviously was to register a domain name in anticipation that consumers would make a mistake and be directed to his site, where he could make a large amount of money through advertising dollars. The court looked at the relevant factors commonly used in considering whether one acts with bad faith intent to profit from a famous mark and found that his conduct satisfied a number of them:

• Zuccarini never used the infringing domain names as trademarks or service marks and had no intellectual property rights in them.

• The domain names did not contain any variation of the legal name of Zuccarini or his company.

• Zuccarini never used the infringing domain names in connection with a bona fide offering of goods or services.

• Zuccarini did not use the domain names for a noncommercial or fair use purposes.

• Zuccarini deliberately maintained these domain names to divert consumers from Shields' Web site.

• Zuccarini harmed the goodwill associated with joecartoon.com.

• Zuccarini engaged in this conduct for commercial gain or with the intent to tarnish or disparage Shields' marks by creating a likelihood of confusion.

• Zuccarini knowingly registered thousands of other Internet domain names identical to or confusingly similar to the distinctive marks of others without permission.

• Shields' mark was distinctive and famous.

The court rejected Zuccarini's defense that his use of the mark fell under the safe harbor provision of ACPA, which states that bad-faith intent shall not be found in any case in which the court determines that the person believed, and had reasonable grounds to believe, that the use of the domain name was a fair use or otherwise lawful.⁴ The court based this rejection on the lower court's conclusion that Zuccarini's claim of good faith and fair use was a "spurious explanation cooked up purely for this suit." The court then affirmed the permanent injunction against Zuccarini, affirmed statutory damages of $10,000 per domain name, and found that Zuccarini's willful conduct and intent to confuse and divert Internet traffic to his Web sites for his own economic gain constituted "an exceptional case" warranting the award of attorneys' fees under ACPA.

This decision is a promising tool for trademark owners to use against another breed of cybersquatters who, until this case, thought they could get around ACPA by using misspellings of famous or distinctive trademarks.

For more information, contact Lori Milvain at 1-888-688-8500 or via e-mail at ltmilvai@hklaw.com.

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¹15 U.S.C. §1125(d) return to article

²15 U.S.C. §1117 return to article

³254 F.3d 476 (3rd Cir. 2001) return to article

⁴15 U.S.C. §1125(d)(1)(B)(ii) return to article