Failing to Police Your Trademark Online: A Cautionary Tale

Police line do not cross

Trademark holders have to police their trademarks to keep them.

In mid-2015, the Academy of Motion Picture Arts and Sciences (AMPAS) brought to trial a lawsuit against GoDaddy.com to stopped its “parked pages” program. I blogged previously about this lawsuit and what it means for business owners.

Before this lawsuit, there was no legal findings about whether or not parked pages were even legal. The verdict in GoDaddy’s favor changes that and has important implications for trademark holders nationwide.

The GoDaddy verdict is a stark reminder to all trademark holders that not diligently policing your mark online could cost you thousands. Worse, if you fail to police your mark, you may lose your rights to protect it altogether.

Parked pages usually occur when valuable domains are bought and then “parked” with ads to obtain revenue while the domain waits to be sold. This is abused by cybersquatters who buy domains with names similar to the trademarked names of a business before the business can buy it.

For example, as of this writing, coke.co is a parked page whereas coke.com goes to coca-cola’s website. The individuals who do run these pages create them on the hopes that web surfers will accidentally go to one of these pages and click on an advertisement. Or, they hope that the trademark holder will buy the domain name for a handsome mark-up.

When a page is parked, the domain registar and host (a company like GoDaddy) gets a portion of the advertisement revenue.

In its lawsuit, AMPAS argued that there were 56 Oscar-related domain names at issue. These domain names include the domains 2011Oscars.com, Oscar4re.com and Oscarcam.com. AMPAS also estimated that GoDaddy.com generated revenues of at least 8 million dollars from internet goers clicking on advertising links associated with these domains.

It is important to note that AMPAS did not contend that GoDaddy owned any of the domains mentioned in its lawsuit. Instead, AMPAS argued that the trademark violators were aided and abetted by GoDaddy who profited from the parked pages. AMPAS complained that GoDaddy allowed infringers to purchase the domain names and failed to police the sites to ensure legal compliance.

The judge didn’t agree. He decided that there was not enough evidence that GoDaddy intended to traffic in trademark violations in its parked pages. In other words, the judge decided that GoDaddy did not deliberately violate AMPAS’s trademarks.

GoDaddy really scored big when the court went a step further. The judge said that GoDaddy also provided enough evidence to prove that the domain was use fairly or otherwise lawfully, which is a defense to trademark claims.

GoDaddy proved this by showing that each time AMPAS sent a complaint to GoDaddy, it took the parked page down, usually within hours.

Domain purchasers also swear to legal compliance with trademark laws as part of their purchase of a GoDaddy automated domain registration. So the court decided that the blame lays on the trademark infringers, and not on GoDaddy.

The court said that all trademark holders must diligently police their own trademarks.

“[AMPAS] confuses GoDaddy’s technical capacity to filter for trademarks with AMPAS’s legal duty to police its own trademarks. At its core, AMPAS’s [] claim would impose upon GoDaddy (and presumably any other company offering parking, hosting, or other basic internet services) the unprecedented duty to act as the internet’s trademark police. The [law] did not impose such sweeping obligations.”

This lawsuit has an important lesson for trademark holders. Trademark holders who believer that their trademarks are being infringed have limited options. They may complain to the domain holder. They may register the page with an organization that seeks to block parked pages. They may try to purchase all domain names that are similar to their trademark before cybersquatters do. Or, they can try suing the domain owner for trademark violations.

The most important lesson is that the trademark holder has the responsibility to monitor their trademark at all times. Not ensuring that others are misusing your mark can cost you millions! It is a daily requirement of any trademark holder. Failure to do so may cost you rights to your own trademark.

How do you police and protect your trademarks?

  • Monitor the internet for use of your trademark or similar words and domains
  • Monitor press sources
  • Monitor public records for infringing filings in any of the state or local governments (not just the USPTO)
  • Monitor domain registrars
  • Monitor search traffic patterns for your domain and similar words, phrases or domains
  • Send cease and desist letters to any potential infringers, and follow up with legal action

If you want to learn more about trademarks, attend one of our webinars for entrepreneurs. Sign up for our next webinar at http://trademarkswebinar.com.

Are Unregistered Domains A Violation of Trademarks?

Young lady laying on the floor using a black laptopThis could be the end of GoDaddy.

Five years ago, the Academy of Motion Picture Arts and Sciences (AMPAS) filed suit against GoDaddy.com.

GoDaddy allows customers to buy domains and “park” them.  Parking them means that the domain points to a web page that has advertisements on them from Google.

When clicked, the owner of the web page gets a portion of that ad revenue. When the page is parked using GoDaddy, both the owner of the page and GoDaddy split the ad revenue.

AMPAS owns The Oscars. It’s website is registered to the domain oscars.com. But someone else registered “theoscars.com” and was holding it ransom. This is sometimes called cyber-squatting; but it is legal in most cases.

Usually, in this situation, someone in AMPAS’s shoes would pay tens of thousands of dollars to recover “theoscars.com” from the registered owner. Or, they would ignore it.

Unfortunately for AMPAS, they are suffering from 56 Oscar-related parked domains. These domains include 2011Oscars.com, Oscar4re.com and Oscarcam.com.

So AMPAS sued GoDaddy. AMPAS claimed that GoDaddy pocketed roughly $90 million in revenue just from their parked pages directed at The Oscars alone. To put this in perspective, GoDaddy annually generates a revenue over $1 billion dollars. If AMPAS wins, that would be nearly 10% of GoDaddy’s annual revenue in damages. That’s a lot of ad clicks.

While this case may seem like it is the fighting of giants and unrelated to the rest of us, that is not so. The ruling could seriously impact millions of business owners. Here’s how:

  • You may now have recourse if you found out that someone was using a domain name that is similar to your trademarked name. Should you sue?
  • GoDaddy’s business would take a crippling hit, possibly scuppering it and the millions of websites it serves. At the very least, expect prices to go up.
  • GoDaddy and other domain registrars may become forced to police trademark violations by registrants, which means more work for all of us.
  • If you own trademarks, you may be required to put in claims on domains in order to keep your marks protected (and not considered “abandoned”).
  • The cyber-squatting industry may die. But more likely, it will continue overseas, outside the jurisdiction of the United States. This will make American companies like GoDaddy suffer, as it will put them at a competitive disadvantage.

Domain hijacking is a common problem that most business owners deal with. If you’ve registered a domain recently, you probably noticed spam that came a few days later trying to sell you similar domain names.

For example, our CEO is publishing a book on election law for third parties titled Just Pursuits. We put up a sales page at JustPursuits.com. About a week later, we were hit with a demand to pay thousands of dollars for “justpursuit.com” (the s is dropped off the end).

In more serious cases, someone will put up a malicious page to try and force you to buy the domain. This happens to celebrities and politicians a lot. For example, Carly Fiorina (former CEO of Hewlett Packard who is running for President) got this gem: CarlyFiorina.org. (Not only are different spellings a problems, the top-level domain suffix like .com, .net, and .org can create problems.)

By the way, only non-profits are supposed to register .org domains. But this is not policed, really.

Ms. Fiorina’s .org spoof page isn’t too bad. There are worse ones depicting pornography, foul language, or other scurrilous materials.

If you haven’t experienced this, try typing in your domain name with minor changes and see what comes up. Are there other sites out there with similar names to your own? If there are, this case means a great deal for you.


 

Given the impact this case will have on how it does business, GoDaddy has gone through trial in this case. A verdict is still pending.

GoDaddy has not played nice during the lawsuit, either. For example, GoDaddy accused AMPAS of rigging the court system to have U.S. District Judge Audrey Collins, whose daughter is a professional actress, oversee all of the GoDaddy cases. The Honorable Collins has made some decisions that were unfavorable to GoDaddy. GoDaddy got “bench slapped” for that one, but ultimately achieved a new judge assignment.

But both sides know what is at stake. AMPAS says that it seeks to establish cybersquatting as a “serious problem that should not be tolerated even if it is being perpetrated by a company that generates over a billion dollars in revenue….

For its part, GoDaddy says that the guns are aimed at the wrong target. “GoDaddy is not a cybersquatter. It is not a pirate,” its attorney said in opening statements at trial. And GoDaddy also tried to help AMPAS. Within three days after receiving AMPAS’s complaint about parked pages, GoDaddy redirected 37 domain names to no-ads templates. Given the current state of domain registration governance (something controlled by an international body), this may have been the best that GoDaddy could do for AMPAS.


 

While we await the verdict on this matter, it important to realize that it may have serious implications for us all. Currently, there is no solid law on what to do about cyber-squatters and parked pages. The legal system has simply not caught up with this issue.

There are dozens of conflicting interests at stake when it comes to domains and cybersquatting. This is an issue that impacts small and big business and even international relations.

Companies who feel their trademarks rights are being violated by parked domains have limited options, such as complaining to the domain holder, registering their page with an organization seeking to block parked pages or attempting to purchase all similar domain names so no one else may register them. Many businesses may find themselves playing a frustrating game of whack-a-mole.

We will update you with the verdict and its implications after it is reached and as the law on this evolves.