Lights, Camera, Legal Action(R) Trademark Theft.com.

Prior to the explosion of Internet commerce, most businesses were oblivious to the importance of translating their trademarks into web-based domain names. During the pre-explosion era, a small army of cyber-opportunists were easily able to co-opt corporate identities of countless established companies in a practice termed "cybersquatting." If the corporations wanted to use the now-registered domain names, the enterprising pirates would ransom the URL. Because cybersquatters rely on brand-name identity, entertainment companies and celebrities have been at a substantially greater risk.

Generally, prior to the year 2000, a trademark owner could either: (1) Initiate federal court litigation alleging infringement under traditional trademark law; or 2) pursue an administrative remedy under the procedures of Network Solutions.

The federal Anticybersquatting Consumer Protection Act (ACPA) was signed into law on November 30, 1999. On January 1, 2000, the Internet Corporation for Assigned Names and Numbers (ICANN) instituted a worldwide arbitration procedure that effectively supplanted the Network Solutions' policies.

Under the new ACPA rules, a trademark owner can bring a lawsuit against anyone who in bad faith registers, uses or traffics in a domain name that is either identical to or confusingly similar to the trademark.

There have already been several cases in which trademark holders have successfully utilized the ACPA. In Quokka Sports vs. Cup International, the New Zealand Yachting Federation obtained an injunction against the americascup.com domain name and website. And in Petersen Publishing vs. Blue Gravity Communications, Teen magazine was able to shut down teenmag.com, a pornographic website.

In addition to the usual remedies presently available for trademark infringement, the courts are also authorized to order either the forfeiture or cancellation of the domain name, or direct that it be transferred to the trademark holder. Statutory damages against cybersquatters can range from $1,000 to $100,000 per abuse. If the owner of the domain name is beyond the federal court's jurisdiction, the trademark owner can institute an "in rem" lawsuit. An "in rem action can provide the trademark holder with the cancellation and/or transfer of the domain name, but will not trigger any personal liability for money damages. This remedy may be particularly useful in situations involving domain name registration by foreign residents who have no personal contacts to the U.S.

The ACPA does not prohibit each and every incorporation of a company's trademark. For instance, in Bally Fitness Holding vs. Faber, the court held that under First Amendment principles, the use of ballysucks.com was, in fact, a legitimate incorporation of the Bally trademark. On this basis, the use of trademarks for similar "online consumer commentary sites" will generally be deemed legitimate.

The ICANN policy essentially establishes an arbitration-style procedure that is designed to resolve domain name disputes within 45 days of filing a complaint and the administrative costs (payable to an arbitration panel) are generally $1,000.

Nevertheless, the ICANN procedures are available only when three requirements are met: 1) The domain name is identical or confusingly similar to a trademark or service mark; 2) the registrant has no legitimate interest in the domain name; and 3) the domain name is registered and used in bad faith.

A trademark owner proceeding under ICANN faces several important limitations. First, ICANN does not apply to all trademark disputes, but only those involving "abusive registration." For instance, the ICANN procedure will not be available where the registrant has had a prior history of doing business under the same name as the domain name. (These types of cases, however, may be actionable under the ACPA, which covers unintentional as well as intentional infringements.) Second, an immediate remedy, such as a temporary restraining order, is not available in an ICANN proceeding. The infringer can continue to use the domain name throughout the entire proceeding. Last, the remedies under ICANN are limited to either the cancellation or transfer of the infringing domain name. Money damages (otherwise available in trademark litigation) cannot be awarded under ICANN.

The first case resolved under ICANN was concluded January 2000. Per the decision, a California-based cybersquatter was ordered to remit to the World Wrestling Federation (Titan Sports) the domain name world wrestlingfederation.com.

Robert Ackermann is an attorney with Lights, Camera, Legal Action(R) in Santa Monica. He can be contacted at [e-mail].