Fernbach argues that
Since the establishment and rise of the Internet, there have been situations where others have tried to capitalize on the unique nature of domain names by registering domain names of popular trademarks and/or individuals’ names, and then turning around and selling these domain names to the owners of the trademark or to the individual. This action, known as “cybersquatting”, has been the reason for the enactment of multiple dispute resolution systems by both governments and private institutions. Further, the amount of cybersquatting cases has increased over the years, with the World Intellectual Property Organization reporting increases in cybersquatting cases over the past few years.
This thesis is designed to be more of a practical guide for an American attorney who is faced with domain name dispute case. As a result, this thesis will focus on the International Corporation for Assigned Names and Numbers’ (ICANN) Dispute Resolution Policy, and the Anti-Cybersquatting Consumer Protection Act (ACPA). This thesis will provide three different hypothetical scenarios that may arise in domain name disputes: where two parties have the same name, or where an individual in engaging in a form of cybersquatting, or where a group has created a website for the purposes of criticizing a corporation. This thesis will also highlight the advantages and disadvantages of the ICANN procedures as laid out in the Uniform Domain Name Dispute Resolution Policy (UDRP) and the procedures available under United States federal law as laid out in the ACPA, and discuss legal strategies and probable outcomes for the three different hypothetical scenarios. Finally, this thesis will conclude that while ICANN’s Dispute Resolution Policy has some disadvantages when compared to the ACPA, it is the better dispute resolution option to use for most cybersquatting activities due to its relative speed, efficiency and lower cost, but the Lanham Act provisions as outlined by the ACPA are better suited for those cases where the client wishes for more remedies than just the transfer or the cancellation of the disputed domain name.In discussing ACPA he comments that
There are a few advantages in using the ACPA. First, the ACPA is a good method to use in trying to acquire an infringing domain name from a foreign cybersquatter. This is because of the ACPA’s in rem provisions, and the ACPA does not have the same burdens of proof that are found in the UDRP. However, it is important to note that the in rem provisions only apply if the disputed domain name was registered with a registrar or other domain name authority that is located within the United States.
Second, the ACPA also allows for monetary damages, statutory damages and injunctive relief, in addition to the same remedies available under the UDRP. This gives a wide array of remedies available to a plaintiff, most of which are unavailable by the UDRP. Also, the ACPA has the same remedies at its disposal as the UDRP, so the plaintiff can still seek the same relief that would be afforded by the UDRP while also seeking other remedies.
Third, unlike the UDRP, the parties can freely engage in discovery. This allows the plaintiff to access information regarding prior registrations done by the defendant, if any, and to access other information that could help establish the bad faith aspects of the plaintiff’s claim. Also, since this is a federal court action and not an arbitration panel, the parties can attack the credibility of each other’s testimony. This can not happen in the UDRP proceedings, which has the potential of becoming a sort of “I said – he said” situation, with both parties stating their respective submissions are accurate to the best of their knowledge.
Fourth, under the ACPA, the plaintiff can also seek damages from the domain name registrar, provided the plaintiff can prove the registrar acted with bad faith to profit from the registration and maintenance of the infringing domain name. While the UDRP does not have any liability provisions for domain name registrars, the ACPA, through its safe harbor provisions, only waives a registrar’s liability if they act in due diligence and in good faith. This provision allows a plaintiff a cause of action against domain name registrars who basically aid in cybersquatting. Combined with the in rem provisions of the ACPA, the plaintiff can get a cause of action against the domain name itself and, if applicable, get monetary damages from the domain name registrar.
Finally, unlike the ICANN arbitration panels, the federal courts are better suited to handle more complex litigation issues, such as affirmative defenses of acquiescence and fair use. Also, false advertising and unfair competition claims are outside the realm of the UDRP arbitrators. Meanwhile, these issues can be dealt with fairly in the federal courts. As a result, if a plaintiff would have a more complex domain name dispute issue, they would probably be better off using the ACPA instead of the UDRP.
Disadvantages of the ACPA
While there are benefits in using the ACPA for a domain name dispute, there are some disadvantages as well. First, federal litigation is not very fast. In fact, it may take months or even years to finally get a case resolved in federal court. This is not a great option for the plaintiff who wants to quickly get a domain name from the registrant/defendant.
Second, federal litigation is expensive. While arbitration under the UDRP may cost around the mid four-figure range, including agency and arbitration panel fees and attorney’s fees, federal litigation will cost a lot more, and could range in the tens of thousands of dollars at least. Considering the usual remedies involved in a domain name dispute, the plaintiff in an ACPA action might end up winning a Pyrrhic victory, spending a huge sum of money for what could have been achieved, at a much lower cost, using an arbitration proceeding under the UDRP.
Third, while the in rem provisions seem like an advantage, it may not prove to be much of an advantage when compared to the UDRP. In the ACPA, the plaintiff can get in rem jurisdiction only if the applicable domain name registrar is within a federal judicial district. On the other hand, the UDRP Policy applies to any domain name registrar that has agreed to be bound by the UDRP Policy. This gives the complainant an opportunity to get relief under the UDRP with a foreign domain name registrant as opposed to the in rem provisions of the ACPA, since the UDRP Policy can apply to domain name registries and registrars outside of the United States, which the ACPA only applies to American registries and registrars. Considering the remedies are the same for these two different provisions, it might be a better option for a plaintiff to use the UDRP Policy instead of the ACPA. Fourth, as eluded to earlier, federal judges may not necessarily be experts in trademark law. It is quite possible that a federal litigation using the ACPA may be presided over by a judge with no real experience in trademark law or with domain name issues. While having a case presided over by a judge who is unfamiliar with the nuances of the legal issues behind the case is a potential problem with any federal litigation, it could be a problem in a domain name dispute case, especially when dealing with concepts such as parody and fair use.
Just like the UDRP, the ACPA has a series of advantages and disadvantages that will require the plaintiff to consider whether they want to use the ACPA or use the cheaper and faster UDRP arbitration proceedings.