Brett E. Lewis, Esq.
Lewis & Hand, LLP
Reverse Domain Hijacking: Extreme
“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.