A new way to put the quick kibosh on cybersquatters – but it will help if you’ve registered your trademarks first

For years I’ve urged readers to register their major identifiers – corporate names, slogans, call signs, etc. – as federal trademarks. (Check out a couple of my posts dating back to 2007 and 2009 if you doubt me.) And now the time has come to beat that drum again, with the impending roll-out of a new “Uniform Rapid Suspension System” (URS) designed to make it easier to protect such marks against cybersquatters. 

Cybersquatters are folks who register Internet domain names based on recognizable trademarks or tradenames belonging to others. Their goal might be to use the familiarity of the underlying mark to attract a lot of traffic to their site, or it might be to try to sell the domain name to the owner of the trademark/tradename, usually at a ridiculously inflated price.

The Internet Corporation for Assigned Names and Numbers (ICANN) – the international body that regulates domain names, among other things – has a system in place to help rightful holders of trademarks targeted by cybersquatters. That’s the Uniform Domain Dispute Resolution Policy (UDRP),which provides initiate a reasonably quick arbitration process aimed at squelching unauthorized use the mark and transferring control of the infringing domain name to the trademark owner. (Additionally, trademark owners can also sue for infringement in federal court – if they have the time, money, patience and masochistic inclination to undertake a serious piece of litigation.)

But ICANN is reportedly on the verge of implementing the URS.

It’s apparently already taking applications from folks looking to serve as arbitrators.  Given the fact that ICANN is looking to charge only about $300 per URS arbitration, some are wondering whether there will be enough money in play to entice many arbitrators to sign on for the gig.  After all, if an arbitrator can’t get more than $300 (if that much) for each proceeding, many potential arbitrators are likely to take a pass rather than commit to providing their services for low-end payments.  Still, I think it’s safe to say the ICANN will eventually get the URS up and running

The URS is similar to the UDRP. Under both procedures, the aggrieved party must show that:

  • the cybersquatter’s domain name is identical or confusingly similar to a mark in which the complainant has valid trademark rights; and
  • the cybersquatter has no legitimate right to the domain name; and
  • the cybersquatter registered and is using the domain name in bad faith. 

By registering your trademarks, you’ll be able to satisfy an important element of the first part of that three-part test: the validity of your trademark rights. A federal trademark registration establishes that validity conclusively. Without such registration, you would have to pull together miscellaneous strands of circumstantial evidence to try to establish the existence of common law trademark rights. (Proving that a squatter has no legitimate claim to use of the domain name and is using it in bad faith may take a little additional digging.)

What’s the difference between the established UDRP and the new URS? While the UDRP is a very complainant-friendly process – statistically speaking, 85% of all complaints filed are successful – it’s not cheap. The UDRP process generally carries a filing fee of about $1,000 and, if you hire a lawyer, it’s not unusual to spend $3,000–5,000 in legal fees and waiting several months to get a domain name transferred from a cybersquatter to you. That’s a lot of time and money to protect even the most important marks, a fact which seems to embolden some cybersquatters.

The new URS removes many of these hurdles, making it considerably easier to protect your marks in what ICANN refers to as “clear cut instances of trademark abuse”.  Fees for invoking the URS are expected to be in the $300 range, a fraction of the current UDRP filing fees. The entire process is expedited, with an initial administrative review to be conducted within two business days of the filing of a complaint. If the complaint is in order, the URS Provider will notify the company through which the cybersquatter registered the domain name at issue – think “GoDaddy” – that it must “lock” the registration, thereby preventing the domain name from being transferred or otherwise altered to avoid enforcement actions.

Within 24 hours of this “locking”, the URS provider officially notifies the cybersquatter by sending hard and electronic copies of the complaint to the contact person(s) listed in the WhoIs database for the contested domain name. The notice also alerts the squatter of the possibility that it might lose the registration. The cybersquatter then has 14 days to respond (although that time limit may be extended under certain circumstances).  The complaint and response (if any) are then referred to an Examiner. If the squatter doesn’t respond to the initial notice, the proceeding goes forward based solely on the evidence presented by the complainant.

Whether or not the registrant files a response, the key issue is whether the three-part test outlined above has been satisfied by “clear and convincing evidence”, leaving no “genuine contestable issue”. If the Examiner concludes that the complainant has met that standard, he/she will issue a Determination in favor of the complainant. That will result in the suspension of the contested domain name for the balance of the current registration period. (Visitors to the contested domain will be redirected to a website explaining the URS and the reason the domain name has been suspended.) While a successful complainant does not automatically get the domain name registration, it does have the first option of extending the registration period for an additional year at commercial rates.

If the Examiner concludes that the complainant has not made its case, then the requested relief will be denied and the URS proceeding will be terminated. The complainant will nevertheless be able to pursue its case through the UDRP or through federal trademark litigation, if it chooses.

Once it’s finally implemented, the URS will provide a very streamlined process, considerably faster and cheaper than the UDRP (and vastly faster and cheaper than the litigation route). With the availability of such a process, trademark holders now have more incentive to take steps to protect their most important identifiers.  I’m not advocating that every business flood the USPTO with trademark applications for any catchphrase or nickname that comes to mind. But I don’t think it’s unreasonable to suggest that, at a minimum, unique business names and prominent “brands” be protected with federal registration. 

Let’s say, for example, that you’re a radio station owner. You have one major identifier: your call sign. You may also have a key slogan that you feature even more prominently that your call – something like “Hot 99 – Rocking the Valley”. And maybe you also have some wacky morning drive DJs using locally-popular personas that you helped create and cultivate (f’rinstance, the fictional but awesome “Crazy Ira and the Douche”). A federal trademark application costs $275 to file, not including a couple of hours of legal time, give or take, to put together and file. You could probably register all three of the identifiers – call sign, slogan, character names – for well under $5,000. And that protects you for 10 years, as long as you continue to use the marks in question and maintain your registrations.

Who are you protecting yourself against? Anyone that might try to use your mark to draw attention to themselves. I’m seeing a significant increase in Internet-only radio stations using “call signs” to identify themselves. This wasn’t a problem 15 years ago, when over-the-air radio ruled and Internet radio was at most a clunky niche option. But now anybody can start a “radio station” on the Internet. Do you really want potential listeners to google your call sign, only to find a completely unaffiliated online “station” instead? 

Registering your call sign for use in conjunction with radio broadcasting (and internet radio broadcasting, if you are, in fact, streaming) gives you leverage against anyone free riding off your name – whether or not they incorporate your call sign into a domain name – and facilitates legal action if it comes to that. Note that the likelihood that it will “come to that” might also be diminished if you register your marks, as the registration will put others on notice of your existing use, and signal to them that you intend to protect your marks. You’re also getting protection against those who would “dilute” your name or brands by using them in conjunction with goods or services you wouldn’t otherwise want to be associated with (see my post on .xxx domain names).

Businesses routinely invest a lot of money in the development of brand identifiers. Isn’t it prudent to protect that investment? I like to think of trademark registration as “insurance”, a relatively small expense now to protect money that’s already been invested, and perhaps even increase the value of the investment in the long run.