What is the Anti-Cybersquatting Consumer Protection Act of and does it prohibit The act provides a cause of action to a trademark holder when someone. What is cybersquatting? Cybersquatting is the act of purchasing a domain name that uses the names of existing businesses, which are usually trademarked. The Anticybersquatting Consumer Protection Act (“ACPA”)’ provides a cause of action for trademark owners against cybersquatters2, who regis- ter domain.

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AntiCybersquatting Protechion Protection Act. In the late s, in the cacophony of disagreement over domain names and Internet governancethere was one issue over which there was rough consensus: In its report on the ACPA, the Senate Judiciary Committee distilled the crucial elements of bad faith to mean an ” intent to trade on the goodwill of another’s mark.

Statutory damages under the Anticybersquatting Consumer Protection Act – Lexology

But note that courts have concluded “that the words of the statute are broader than this political stimulus that led to its enactment. Trademark owners are facing a new form of piracy on anticybersquattting Internet caused by acts of ”cybersquatting,” which refers to the deliberate, bad-faith, and abusive registration of Internet domain name s in violation of the rights of trademark owners.

For example, when Mobil and Exxon announced their proposed merger in December,a speculator registered every variation of the possible resulting domain namei.

In another example of bad-faith consujer of the domain name registration system, Network Solutions- the domain name registry that administers the Internet ‘s ”. The practice of cybersquatting harms consumers, electronic commerceand the goodwill equity of valuable U. Online consumers have a difficult time distinguishing a genuine site from a pirate site, given that often the only indications of source and authenticity of the site, or the goods and services made available thereon, are the graphical interface on the site itself and the Internet address at which it resides.

As a result, consumers have come to rely heavily on familiar brand names when engaging in online commerce.

But if someone is operating a web site under another brand owner’s trademarksuch as a site called ”cocacola. The costs associated with these risks are increasingly burdensome as more people begin selling pharmaceuticalsfinancial services, and even groceries over the Internet. Regardless of what is being sold, the result of online brand name abuse, as with other forms of trademark violations, is the erosion of consumer confidence in brand name identifiers and in electronic commerce generally.

Cybersquatters target distinctive marks for a variety of reasons. Some register well-known brand names as Internet domain name s in order to extract payment from the rightful owners of the marks, who find their trademark s ”locked up” and are forced to pay for the right to engage in electronic commerce under their own brand name.

For example, several years ago a small Canadian company with a single shareholder and a couple of dozen domain name s demanded that Umbro International, Inc. The Committee also heard testimony that Warner Bros. Others register well-known marks as domain name s and warehouse those marks with the hope of selling them to the highest bidder, whether it be the trademark owner or someone else.

For example, the Committee heard testimony regarding an Australian company operating on the Internet under the name ”The Best Domains,” which was offering such domain name s as ”porsche. In addition, cybersquatters often register well-known marks to prey on consumer confusion by misusing the domain name to divert customers from the mark owner’s site to the cybersquatter’s own site, many of which are pornography sites that derive advertising revenue based on the number of visits, or ”hits,” the site receives.


Cybertelecom :: ACPA

For example, the Committee was informed of a parent whose child mistakenly typed in the domain name for ”dosney. Other instances of diverting unsuspecting consumers to pornographic web sites involve malicious attempts to tarnish a trademark owner’s mark or to extort money from the trademark owner, such as the case where a cybersquatter placed pornographic images of celebrities on a site under the name ”pentium3.

Others attempt to divert unsuspecting consumers to their sites in order to engage in unfair competition. For example, the business operating under the domain name ”disneytransportation.

Similarly, the domain name address ”wwwcarpoint. Finally, and most importantly, cybersquatters target distinctive marks to defraud consumers, including to engage in counterfeiting activities. For example, the Committee heard testimony regarding a cybersquatter who registered the domain name s ”attphonecard. We also heard the account of a cybersquatter purporting to sell Dell Computer products under the name ”dellspares.

The ACPA’s congressional record consistently signals the drafters’ intention to target a narrow class of cyber-squatters consisting of those who anticyhersquatting the bad faith intent to profit, and not to tread on the rights of those with any other motives. PrinceF. Utah citing Mayflower. Congress viewed the legal remedies available for trademark owners before the passage of the ACPA as “expensive and uncertain.

Anticybersquatting Consumer Protection Act

Existing legal remedies were insufficient to respond to the problem of cybersquatting. For example, existing law does not deal with anticybersuqatting where cybersquatters are warehousing domain names, essentially holding an inventory of trademarks that he won’t use but intends to sell to the rightful owner at extortionate prices. There are also recent cases where there is no one to initiate legal action against because cybersquatters anticybfrsquatting given false or misleading contact information adt the registration authority.

Specifically, Congress noted that with the development of case law extending infringement and dilution actions to include domain name violations, cybersquatters had become increasingly clever in their tactics.

Infringement was easily circumvented by either not linking a web site to the domain name or by posting consuumer site that was unrelated to the trademark owner’s business.

Likewise, a dilution claim could be prevented by avoiding making initial offers of sale to the legitimate trademark owners, thus defeating the courts’ lines of precedent construing offers to protectino domain names as a form of use in commerce. Despite the problems it presents to trademark owners and consumers, cybersquatting, is not illegal per se. In other words, there are no laws in any jurisdiction, national or otherwise, that explicitly prohibit the practice.

Courts, particularly those in the United States where cybersquatting is an especially pressing issue, have typically utilized traditional concepts in trademark law to provide some trademark owners with remedies for harm caused by piracy on the Internet. See, Panavision Int’l, L. Unfortunately, some cybersquatters have read these cases carefully and have taken the necessary precautions to insulate themselves from liability.

Cybersquatters register famous trademarks in bulk, but in most cases, do not anticyybersquatting an active Web site. See, Juno Online Services v.

What is the Anti-Cybersquatting Consumer Protection Act of 1999 and does it prohibit gripe sites?

Even though cybersquatters are trafficking in domain names, trademark owners in many cases cannot sue without proof of use or an offer of sale or because in rem actions against domain names are not permitted. Consequently, trademark owners are forced to engage in a continual monitoring program–waiting to see if the cybersquatter begins to use their domain name, offers it for sale to the public, provides legitimate contact information to the registration authority, or fails to renew the registration with the registration authority.


In one case involving domain names, the plaintiff observed, and the court agreed, that “some of the domain names at issue have registrants whose identities and addresses are unknown and against who in personam proceedings might be fruitless. Porsche Cars North America, Inc. We are here today to hear evidence on a new form of high- tech fraud that is causing confusion and inconvenience for consumers, increasing costs for people doing business on the Internet, and posting substantial threat to a century of pre- Internet American business efforts.

Once a trademark is registered as an online identifier or domain name, the cybersquatter can engage in a variety of nefarious activities–from the relatively benign parody of a business or individual, to the obscene prank of redirecting an unsuspecting consumer to pornographic content, to the destructive worldwide slander of a centuries-old brand name.

In the legislative history, cybersquatting is described as a “nefarious” activity, an fraudulent activity, and as a get-rich scheme. Prior to the enactment of the ACPA, the first definition of cybersquatters in the federal courts was articulated by the Norther District of Illinois:.

These individuals attempt to profit from the Internet by reserving and anticybersquattiing reselling or licensing domain names back to the companies that spent millions of dollars developing the goodwill of the trademark. See Sporty’s Farm L.

Prior to the passage of the ACPA, courts referred to cybersquatters as those who warehoused domain names and then sold them at extortion prices. Chasser, “Early cases include Intermatic, Inc. In that particular case, the defendant registered intermatic. The defendant, in anticybersquatring to this domain registration, also had registered approximately other domain names, many based on trademarks of well-known businesses, including deltaairlines.

The term ‘ domain name ‘ means any alphanumeric designation which is registered with or assigned by any domain name registrar, domain name registry, or other domain name registration authority as part of an electronic address on the Internet. Federal courts have concluded that UDRP decisions are not binding on them. Judicial review of a WIPO decision is de novo. On-line extortion in any form is unacceptable and outrageous.

Whether it’s people extorting companies by registering company names, misdirecting Internet users to inappropriate sites, or otherwise attempting to damage a trademark that a business has spent decades building into a recognizable brand, anyone engaging in cyber-squatting activity should be held accountable for their actions. Cybersquatters register well-known brand names as Internet domain names in order to force the rightful owners of the marks to come forward and pay for the right to engage in electronic commerce under their own name.