FAQ: Domain Names

Q: I want to select a domain name. How do I do that without infringing anyone else's rights?

An acquaintance of mine, Tim Byars, owned and operated a video consulting business as a sole proprietor for the past nine months under the name overdrive.com. His bank account, business cards, envelopes, invoices, stationary, marketing and presentation materials, sole proprietor and county business licenses all used this name. In December 1995, two large companies contacted him alleging his domain name infringed their trademarks. The first corporation, Randall Publishing Company, Inc., insisted his domain name infringed the trademark Overdrive they had used on trucking magazines for over thirty years. The second entity, OverDrive Systems, insisted his domain name infringed the trademark OverDrive they had used on World Wide Web Publishing tools and services for about a decade. Both organizations were willing to commit substantial resources, including attorneys' fees and court expenses, to this matter. As a small business owner, Byars had neither the time nor the money to fight these battles. After a month of debate, he transferred his domain name to Overdrive Systems and reprinted all his business materials. How can you prevent a similar situation from happening to you?

Last month, we discussed registering a domain name on the Internet. In my example, the domain name overdrive.com is a service mark. A service mark is a word, phrase, picture, symbol, or shape which identifies and distinguishes your services from other services in the marketplace. A service mark is the same as a trademark except it's used to identify services, not goods. The federal and state laws and procedures governing service marks and trademarks are the same so I'll use the word "mark" generically to discuss both.

As a mark, a domain name can infringe other marks used in everyday commerce. In the past, Network Solutions, Inc. ("NSI"), which provides domain name registration services, did not participate in domain name disputes. Their new policy, effective July 1995, requires all applicants to represent the use of their domain name doesn't infringe a third party's mark or company name. A third party can present evidence to NSI that they've used a mark, federally registered with the United States Patent and Trademark Office, which is the same or similar to your domain name, before you registered it. NSI then can require you to relinquish your domain name, although they will assist you in registering a new domain name. During domain name disputes, NSI can place names in a Hold category in which the name cannot be registered to anyone. Disputes with NSI are resolved by arbitration but you must pay NSI for any legal fees or damages it may incur.

So, before you commit substantial resources to a domain name, and risk paying NSI and some third party's legal fees and damages, you should research whether your proposed domain name infringes upon another's mark. Unfortunately, there are currently no free methods to perform such an investigation. Thomson & Thomson is a company which provides professional search services for marks. They can check availability of your domain name against other domain names, trademarks, service marks, and company names. In addition, they can check if a previously-registered domain name conflicts with or could be confused with your current or proposed marks. Their search professionals are experts at ferreting out potentially conflicting names. Their search reports provide comprehensive data on the marks, including current status, date registered, goods or services upon which the marks are used, and owner names and addresses. You might wish to supplement their search with your own rummage through the Internet using your favorite browser as their databases are only updated every two weeks and NSI registers thousands of domain names daily.

You've now got your report. How can you determine if your domain name infringes another's mark? In real life, there is no black-and-white test for mark infringement. The touchstone for infringement is consumer confusion. In other words, would a consumer, surfing the Internet and spying your domain, think it belonged to a third party? Courts look at many, if not all, of the following eight factors. As you review your report, make a list of these factors and determine how many fall in your favor. If half or less than half are on your side, it might be time to think of a new domain name.

Factor Explanation

1) Strength of the mark. Arbitrary or fanciful marks (Exxon, Kodak, Pepsi) are granted broader protection than merely suggestive or descriptive marks (Bug-Mist, Sno-Rake).

2) Proximity of the goods or services. If your goods or services are similar to the mark1s goods or services (cut-glass articles and plastic tableware found similar) courts can find infringement easier than if the goods or services are unrelated.

3) Similarity of the marks. If your domain name is identical or sounds identical to an existing mark (Kelco and Quelco), courts can find infringement easier than if the names are widely dissimilar.

4) Evidence of actual consumer confusion. Did you or they receive phone calls inquiring about the other's goods or services?

5) Marketing channels. Are your goods or services marketed or sold through the same stores or channels as the mark's goods or services?

6) Degree of purchasing care a consumer uses in selecting the goods or services. Do consumers buy your goods or services and the mark's goods or services quickly (cheaper goods) or do consumers exercise care before purchasing (expensive goods)?

7) Intent of the second, or later, user of the mark. Did you know of the first use of the mark or did you have some nefarious scheme to infringe the mark?

and

8) Likelihood of market expansion by the first user of the mark into different product or service areas. Is the owner of the mark likely to diversify his product or service lines into other areas which may overlap with your product or service lines?

In the Byars example, there wasn't a likelihood of consumer confusion between the trucking magazine, Overdrive, and Byars' video consulting service, overdrive.com. While the marks were quite similar (score one for the trucking magazine), all the other factors favor my friend (score seven for him). The mark wasn't strong (overdrive is a common term in the trucking business), the services weren't similar (trucking and video consulting), there was no evidence of actual consumer confusion, and the marketing channels were vastly dissimilar (print venues versus video services channels). In addition, buyers of the magazine or the video consulting service exercised care before purchasing such niche goods and services. Byars had no prior knowledge of the mark. Before he registered his domain name, he used an Internet search browser (Alta Vista) which found neither the Overdrive trucking magazine nor the OverDrive Web publishing tool because each started their Internet Web pages only months after he registered his domain name. Finally, the ultimate factor is obviously in Byars' favor because it's unlikely a trucking magazine would expand into the video consulting business.

In January 1996, NSI notified Byars that OverDrive Systems, the Web publishers, possessed a federally registered trademark for the mark Overdrive. NSI requested Byars provide evidence he had used his domain name prior to their use of the mark. Alas, he had no such evidence. Without going through the eight-step infringement test, he relinquished his domain name to save money and time. To prevent this from happening to you, you should have a search performed of your potential domain name and analyze the reported marks using the eight-step test. A search report from Thomson & Thomson costs between $80 and $340.

If you can't afford the money, I recommend you search the Internet for any potentially conflicting marks. Also, try to select a completely arbitrary and unusual domain name in an effort to not step on anyone's toes. The more unique the mark, the less likely it's been used before, and the stronger your own mark protection. If, after using your domain name, you're notified by NSI of a conflict, you may wish to engage in the eight-step test to make your own determination of possible infringement. If the owner of the mark can prove he used his federal mark prior to your domain name use, you may need to attend arbitration to demonstrate your own non-infringement. If you don't win at arbitration or if, after performing the eight-step test, the factors don't favor your name, you may have to incur the expense of reprinting your business materials. Tread carefully both when you select your domain name and, if you have a search performed, when you analyze the results. As Byars knows, the expense of a mark misstep, even inadvertent, can cost thousands of dollars.

Courtesy of Marie D'Amico.