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April 01, 2008

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Brett E. Lewis, Esq.
Lewis & Hand, LLP

Reverse Domain Hijacking: Extreme Makeover

“Reverse domain name hijacking” is the practice whereby trademark owners assert expansive trademark rights in an effort to strip legitimate holders of their domain names.  It is a phenomenon that is all too common:  small company registers dictionary word domain name.  Big company wants domain name.  Big company files  UDRP, hoping to intimidate and outspend domain name away from small company.  Panelist awards domain name to big company, often without opposition from small company.  Small company fumes about unfairness of domain name dispute resolution process and of life in general.

Although domain name disputes almost invariably come down to their specific facts, it is no secret that a number of large companies use their financial resources to muscle domain names away from legitimate holders.  Why is this practice so prevalent? The UDRP contains no meaningful disincentive to prevent overzealous trademark owners from filing complaints.  At worst, a complainant may be named a “Reverse Domain Name Hijacker.”  The threat of being so branded does not exactly strike terror into the hearts of corporate giants, and as long as some overreaching claims are successful, these claims will continue to be filed. 

So what is an aggrieved party to do?  Well, if they have the resources, they can file an action in court to declare that their registration or use of the domain name is not unlawful under the Anticybersquatting Consumer Protection Act (ACPA).  See 15 U.S.C. 1114(2)(D)(v).  This provision is intended to balance the rights of domain name registrants against the rights of trademark holders, and to provide a redress against reverse domain name hijacking. See, e.g., Barcelona, com. v. Excelentisimo Ayuntamiento De Barcelona, 330 F.3d 617 (4th Cir. 2003).  The ACPA, however, only provides for injunctive relief – i.e., even if the domain holder wins, the best she can do is get her name back. See 15 U.S.C. 1114(2)(D)(v).  The statute does not provide for monetary damages against the trademark holder. As a result, trademark holders have little disincentive to curb their abusive practices.  Few domain name holders will have the resources to challenge them in court, and even if they do, the worst that can happen to the trademark holder is that they will spend money litigating, which is not generally much of a deterrent. 

Under the current system, to contest a bad UDRP decision, domain name holders must be prepared to spend tens of thousands of dollars in court just to have a chance at holding onto their domain names, with no recognized monetary remedy against overreaching trademark holders.  Sometimes, the domain name holder may agree to part with the domain name in settlement to recoup its losses, but this type of forced transaction is merely a symptom of the statutory imbalance, not the cure for it.  

Amending the ACPA to allow aggrieved registrants to receive statutory damages would help to achieve a greater balance between the rights of trademark owners and domain name holders.  Effecting such change would require a concerted coordination on the part of domain name holders and a considerable lobbying effort aimed at Congress. There also would likely be strong opposition to such a measure from the very parties currently engaged in reverse domain name hijacking.  Another alternative would be for domain name attorneys to assert claims for monetary damages based on the creation of a new tort of reverse domain name hijacking.  Although no such tort has yet been recognized, nor does such a claim appear ever to have been decided by a court.  Although it may take some time for the law to catch up with technology, in general, and the practice of reverse domain name hijacking, in particular, it is incumbent upon those parties with the resources to fight back and their attorneys to change the law.  Otherwise, the playing field will remain uneven and overreaching trademark owners will continue to assert bad faith claims against legitimate registrants.            

*****

Brett Lewis Bio

 


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