Tarnishment is an action available in the U.S. to restrain any activity that hurts the reputation of the owner of the trade mark. For example, in Hasbro Inc. v. Internet Entertainment Group Ltd.41, a preliminary injunction was granted against the use of candyland.com for a sexually-explicit web site.
The Anticybersquatting Consumer Protection Act (the “ACPA”) was signed into law on November 29, 1999, as part of the Intellectual Property and Communications Omnibus Reform Act of 1999. The ACPA creates a Section 43(d) of the Lanham Act. The ACPA provides trade mark owners with strong rights against those who in bad faith register or traffic in domain names that are identical or confusingly similar to registered trade marks. The ACPA also prohibits the registration of, and trafficking in, domain names that would dilute famous marks.
Section 2 of the ACPA states:
“Congress finds that the unauthorized registration or use of trade marks as Internet domain names or other identifiers of online locations (commonly known as cybersquatting’)” –
(a) results in consumer fraud and public confusion as to the true source of sponsorship of products and services;
(b) impairs electronic commerce, which is important to the economy of the United States; and
(c) deprives owners of trade marks of substantial revenues and consumer goodwill.
Section 3 of the ACPA provides that the owner of a trade mark may elect to forego actual damages and profits and pursue an award of not less than $1,000 and not more than $100,000 in statutory damages. In addition, if the court finds that the registration or use of the registered trade mark as an identifier was willful, the plaintiff may recover not less than $3,000 or more than $300,000 per trade mark per identifier. Statutory damages may provide an incentive for trade mark owners to sue under the ACPA rather than using ICANN’s Domain Name Dispute Resolution Policy.
One of the most significant features of the ACPA is that it allows for constructive service of process on the cybersquatter through publication and through providing of notice to the postal and e-mail addresses the cybersquatter provided to the domain name registrar, even if such addresses were incorrect when given. Another salient feature of the ACPA is that, in addition to an in personam action, the ACPA is allows for in rem action against the domain name itself in the U.S. judicial district court where the domain name was registered. Recently, a federal court has ruled that the choice of in rem or in personam jurisdiction is an either or proposition.42 Lastly, it should also be noted that under Section 5 of the new ACPA, Internet service providers and domain name registrars are not liable for monetary relief to any person for the removal or transfer of a domain name.
The first application of the ACPA was in the Circuit Court of Appeals for the Second Circuit case of Sporty’s Farm LLC v. Sportsman’s Market, Inc. The Second Circuit held that Sporty’s Farm LLC violated the ACPA by using the domain name “sportys.com” to sell Christmas trees online. The Court determined that the domain name incorporated the distinctive trade mark “Sporty’s” which belonged to Sportsman’s Market Inc., a mail-order catalogue company selling aviation related goods, tools and household accessories in a catalogue called “Sporty’s.
In early December of 1999, the NFL filed suit against California web site designer Ken Miller for the right to his domain name nfltoday.com. CBS, host of pre-game show “NFL Today”, asked Miller to remove all CBS logos from his site and to relinquish the domain name without compensation. Miller refused asking for $120,000. The NFL then filed suit alleging Miller’s actions violate the Act. Today, Miller has changed his sport betting web site to another URL “as a courtesy to NFL Properties.”
On December 6, 1999, Harvard University filed suit against Web Productions for willfully registering, maintaining and offering to sell or licence numerous domain names including www.harvard-lawschool.com. The complainant alleges that the defendant sent an e-mail message to Harvard offering it the right of first refusal prior to offering the domain names for sale to the general public. The defendants registered over 65 Internet domain names incorporating the Harvard or Radcliffe marks. Harvard sent Web Productions a cease and desist letter, asking it to stop using or offering to sell the domain names. Today, the site www.harvard-lawschool.com does not provide a valid Internet connection.
Canadian domain name registrants have been pursued in U.S. courts under the ACPA. In Northern Light Technolgy, Inc. v. Burgar the United States Court of Appeals upheld a preliminary injunction which required an Albertan domain name owner to post a disclaimer on its web site northernlights.com. The plaintiff holds a registered U.S. trade mark for NORTHERN LIGHT and operates the web site www.northernlight.com and complained that the defendant, who had engaged in a practice or registering popular domain names, had registered northernlights.com in bad faith. The court had no trouble assuming jurisdiction based on the fact that the plaintiff was suffering tortious injury in Massachusetts. The impugned site now directs users to their intended destination. The Canadian owners of the domain name technodome.com have been forced to defend an action in Virginia under the in rem provisions in the ACPA. The Court asserted jurisdiction in part because it found that it was unclear whether or not Canada was a suitable forum in which to hear the dispute since it doesn’t have a body of law equivalent to the ACPA.
The ACPA doesn’t just apply to the use of trade marks as domain names. In Sheilds v. Zuccarini, the Court of Appeals for the 3rd Circuit found that typosquatting could also violate the ACPA.