LEGAL GUIDE
Written by attorney Jason A. Cody | Jan 25, 2011

Basic Guide To Domain Name Disputes: ACPA v. UDRP

Both the ACPA and the UDRP are intended to resolve disputes involving domain names. However, these two vehicles differ in terms of the burdens of proof, the procedures, the expense, and the potential remedies. This guide provides basic insight into the following questions:

  • Should I file a U.S. federal action for cybersquatting under the ACPA?

  • Should I submit the domain name dispute to arbitration under the UDRP?

  • What are the chances of obtaining/retaining my domain name?

  • How long will this take?

  • What is the relative cost?

  • What happens if I win/lose?

There are the many legal and strategic considerations involved with ACPA actions and UDRP proceedings beyond the scope of this basic guide to domain name disputes. In addition, use of a trademark in a domain name may give rise to other legal claims, such as trademark infringement, trademark dilution, false advertising, and unfair competition, which also are outside the scope of this guide. As always, you should consult an attorney about any Internet law issues.

The ACPA

To succeed in an ACPA action, a plaintiff must prove the following:

  1. Defendant acted with a bad faith intent to profit from the plaintiff’s mark;

  2. The defendant registered, trafficked in, or used a domain name;

  3. The domain name is identical or confusingly similar to plaintiff’s mark; and

  4. The mark was distinctive or famous at the time the domain name was registered.

A defendant will defeat an ACPA claim where a plaintiff fails to establish any one of the four elements listed above or by establishing one of the following defenses:

  1. You believed and had reasonable grounds to believe that use of the mark was fair or otherwise lawful;

  2. You made fair use of the mark in a domain name; or

  3. Your use of the mark was an exercise of free speech or expression under the first amendment of the U.S. Constitution.

The parties have an opportunity to conduct fact discovery and use any established facts to support or contradict liability under the ACPA.

The ACPA provides that, in an action against the domain name owner, a successful plaintiff is entitled to injunctive remedies and monetary remedies. Alternative to actual monetary damages and profits, a plaintiff may elect statutory damages which can range from $1,000 up to $100,000 per infringing domain name. A court also may order the forfeiture or cancellation of the domain name or the transfer of the domain name to the mark owner, and attorneys fees and costs may be available. The remedies available for an in rem ACPA action brought solely against a domain name are limited to domain name forfeiture, cancellation, or transfer.

ACPA actions often involve additional, related trademark claims, and thereby make the case broader, more complicated, and more time consuming and costly, especially relative to UDRP proceedings.

In general, consider filing an ACPA action under the following circumstances:

  • You need to develop facts

  • You want to seek broad injunctive relieve

  • You want monetary damages

  • You want U.S. law to be applied

The UDRP

To succeed in a UDRP proceeding, a complainant must prove the following:

  1. The domain name is identical or confusingly similar to complainant’s mark;

  2. The respondent (domain name registrant) has no rights or legitimate interests in the domain name; and

  3. The domain has been registered and is being used in bad faith.

A respondent will defeat a UDRP claim if the complainant fails to establish any one of the three elements listed above. A respondent establishes rights or legitimate interests in a domain name by proving any one of the following:

  1. Before any notice to the dispute, your use of, or demonstrable preparations to use, the domain name or a name corresponding to the domain name in connection with a bona fide offering of goods or services;

  2. You (as an individual, business, or other organization) have been commonly known by the domain name, even if you have acquired no trademark or service mark rights; or

  3. You are making a legitimate noncommercial or fair use of the domain name, without intent for commercial gain to misleadingly divert consumers or to tarnish the trademark or service mark at issue.

Unlike an ACPA action, there is no fact discovery and remedies are limited to cancellation or transfer of the disputed domain name (i.e., injunctions and monetary damages are not available). However, a UDRP proceeding is much less expensive than an ACPA action and participants can generally expect a decision within a few months.

Filing a UDRP complaint may be most appropriate under the following circumstances:

  • You want a quick decision

  • You do not want to spend much to obtain a domain name

  • You do not need to develop facts (i.e., it is a straightforward cybersquatting case)

  • You do not need broad injunctive relieve

  • You do not need or expect to obtain monetary damages

  • You do not care whether U.S. law is applied

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