Internet Trademark Domain Name Disputes

The National Arbitration Forum just released three decisions regarding trademark domain name disputes, which is commonly referred to as "cybersquatting." The three cases illustrate different how to win an internet domain name trademark dispute, and how not to.

Magic Johnson

The first domain name is MagicJohnsonTravelGroup.com. June Bug Enterprises, on behalf of basketball legend Magic Johnson and his latest venture Magic Johnson Travel Group, filed to recover the domain name MagicJohnsonTravelGroup.com. A few days after the announcement of the formation of the Magic Johnson Travel Group, myspecialprice.com registered the domain name in question. myspecialprice.com had no rights to utilize the terms "Magic Johnson," and provided pay-per-click ads on the website. The Forum found for Magic Johnson, and ordered the domain name transferred from myspecialprice.com to Magic Johnson. This case illustrates the importance of registering domain names for your trademarks- especially before announcing your new trademarks to the public. The cost of registering the domain name is a lot lower (and quicker) than having to arbitrate over the domain name. The full decision is June Bug Enterprises, Inc. v. myspecialprice.com

War Games

In 1983, Metro-Goldwyn-Mayer Studios ("MGM") produced the hit movie "War Games." In 1998, World Readable registered the domain name wargames.com. For 8 years, pay-per-click ads appeared on the website, and in 2006 the website began selling military simulation war games.

The arbitrator found that although the marks were identical, MGM failed to show the 3 requirements to transfer a domain name:

(1) the domain name registered by the Respondent is identical or confusingly similar to a trademark or service mark in which the Complainant has rights;

(2) the Respondent has no rights or legitimate interests in respect of the domain name; and

(3) the domain name has been registered and is being used in bad faith.

The arbitrator found that World Readable had legitimate rights in the domain name, in light of the sale of products. This case highlights the importance of policing your trademarks, and for acting immediately to address infringers. If MGM had gone after World Readable 5 years ago, when they were only showing ads, then they would have likely been successful in obtaining the domain name. The full decision is Metro-Goldwyn-Mayer Studios Inc. v. World Readable c/o R.L. Cadenhead.

Pig

The third case involves the trademark "pig." Canadian Adam Dicker registered the domain name pig.com. New Pig Corporation has been using the trademark "pig" since 1987 for industrial absorbents, containment products, waste handling equipment, distribution, sales and service related to such products. Mr. Dickler has been using the pig.com domain name to show pay-per-click ads. The arbitrators found that since Mr. Dicker had not registered the domain name in bad faith (e.g. he did not intend to usurp New Pig's trademark rights, and obtained the domain name because of it's desirable 1 word format), then New Pig had not proven the necessary elements to force transfer of the domain name.

Mr. Dicker purchased the domain name in an auction in 2006. New Pig should have been policing the mark and the domain name, and could have won it through the auction. They gambled through the arbitration process, and in the end, do not have a domain name with their trademark. Mr. Dickler is earning over $2 for the top click on his website, so this also demonstrates the value of domain names. The full decision is New Pig Corporation v. Adam Dicker.

Read the full press release.

Trademark use in commerce- make sure it's legal

A common, and well known, rule in trademark law is "first use." I advise all clients, even if they cannot afford to file a trademark application, to start using their trademark in commerce as soon as possible. In the United States, trademark rights accrue upon use in commerce (for those that really want to know, 'use in commerce' refers to the U.S. Constitution, Article I, Section 8, Clause 3 , which allows the U.S. Congress "To regulate Commerce with foreign Nations, and among the several States, and with the Indian Tribes.") More on "use in commerce" in a later article.

This first use rule holds that the first person or company to start actually using the mark with their good or service, in commerce, is the superior trademark holder. This can become an issue when two entities are using similar marks for similar services around the same time. The eventual winner is the one that used the mark first, and then continually, in commerce.

The Ninth Circuit Court of Appeals (the federal courts that covers much of the Western States) has just issued a ruling in the case of CreAgri, Inc. v. USANA Health Sciences, Inc. This case states:

In a contest involving competing products claiming trademark priority, the district court determined, in order to acquire priority, a "use in commerce" means a lawful use- here, a use compliant with federal labeling requirements. [District court ruling upheld]

In this case, the parties were concerned regarding first use in commerce over a trademark. It turns out (to make a long story short) that one party had been using a trademark with a nutritional supplement product that was not fully compliant with Food and Drug Administration labeling requirements. The court held, and this court of appeals upheld the decision, that the prior use in commerce, not complaint with the law, was invalid. The court only will consider lawful use in commerce when determining trademark use priority.

This is somewhat significant, in that nutritional supplements are really widespread. In the Nineties, regulations regarding nutritional supplements were relaxed, hence those lovely small print warnings we see for many "supplement" products to "treat" conditions (e.g. "the accuracy of claims have not been verified by the FDA"). Turns out that in addition to being potentially dangerous to individuals, these products cannot claim rights to a mark- unless they comply with the law.

Some might think this is common sense, but there is such a volume of nutritional supplements out there (some of which I have tried) that the noise of the claims can sometimes overwhelm the actual efficacy of the product itself. I think this is certainly a step in the right direction, in recognizing that a product not compliant with the law should not be allowed to claim stronger trademark rights. If a product does what it claims, then it should certainly be stated, verified, and then the product will sell on its own right.

The full text of this decision is available here: CreAgri, Inc. v. USANA Health Sciences, Inc., citation TBD (9th Cir. 2007)