Trademark Owner's Strategy: Litigation Versus the UDRP

Pepperdine Dispute Resolution Law Journal Pepperdine Dispute Resolution Law Journal

Volume 13 Issue 2 Article 4

4-15-2013

Trademark Owner's Strategy: Litigation Versus the UDRP Trademark Owner's Strategy: Litigation Versus the UDRP

Jessica Sganga

Follow this and additional works at: https://digitalcommons.pepperdine.edu/drlj

Part of the Dispute Resolution and Arbitration Commons, Intellectual Property Law Commons, and the

Internet Law Commons

Recommended Citation Recommended Citation

Jessica Sganga,

Trademark Owner's Strategy: Litigation Versus the UDRP

, 13 Pepp. Disp. Resol. L.J. Iss. 2

(2013)

Available at: https://digitalcommons.pepperdine.edu/drlj/vol13/iss2/4

This Comment is brought to you for free and open access by the Caruso School of Law at Pepperdine Digital

Commons. It has been accepted for inclusion in Pepperdine Dispute Resolution Law Journal by an authorized

editor of Pepperdine Digital Commons. For more information, please contact bailey[email protected].

[Vol. 13: 301, 2013]

PEPPERDINE DISPUTE RESOLUTION LAW JOURNAL

301

Trademark Owner's Strategy:

Litigation Versus the UDRP

Jessica Sganga*

NTRODUCTION

The Internet has widened the gap between the producer and the

consumer. Online consumers have no assurances as to whom they are

dealing with or what they are actually buying, except for the domain name.

Domain names fulfill the same role that trademarks historically played in

more traditional modes of business.

Accordingly, “the use of one’s

trademark as a domain name has been increasingly important in securing a

business’ Internet dominance”;

likewise, precluding others from using one’s

trademark in a domain name has become critical.

* Jessica Sganga received her Juris Doctor from Pepperdine University School of Law in 2013.

1. “Web users often assume, as a rule of thumb, that the domain name of a particular

company will be the company name followed by ‘.com.’” Brookfield Communications’, Inc. v. W.

Coast Entm’t’ Corp., 174 F.3d 1036, 1045 (9th Cir. 1999).

2. The Intersection of Trademarks and Domain Names, International Trademark Association

(Aug. 1997), http://www.ntia.doc.gov/legacy/ntiahome/domainname/email/INTA-whitepaper.htm.

3. Yasaman Navai, Sporty’s’ Farm L.L.C., v. Sportsman Market Inc.-Protecting Against

Cybersquatting or Extending the Allowable Reach of Trademark Law on the World Wide Web, 11

DePaul-LCA J. Art & Ent. L. 191 (2001). The right domain name is an integral part of any

marketing strategy, especially with the rise of search engines. See Strategic Domain Name

Marketing Company, Psyence.net, http://www.strategicdomainnamemarketing.com (last visited Feb.

25, 2012). WordTracker and Overture’s Inventory provide information about which phrases are

most popular in searches. Id.

4. In order to protect their trademarks, many companies register domain names that are

similar to their name. For instance, Google owns at least one thousand domain names. See Google

Domain Names, pingdom (Apr. 23, 2008), http://royal.pingdom.com/2008/04/23/google-domain-

names-–-the-funny-strange-and-surprising/. This list includes many more than the obvious domain

names like google.com, blogger.com, and gmail.com. Id. The list includes possible misspellings:

gewgol.com, glougle.com, goolgel.com, glugli.com, geggle.com, georgle.com, glogoo.co, and

gmale.com. See id. The list also includes potential new services: google4kids.com,

googlebackups.com, googleauction.com, googlebroadband.com, googlecasinogames.com,

googlefamily.com, googlejokes.com, googlelovers.com, googlepersonals.com, googlereligion.com,

googlegym.com, googledaycare.com, bankgoogle.com, and googlepaperproducts.com. Id.

Sganga: Trademark Owner's Strategy: Litigation Versus the UDRP

Published by Pepperdine Digital Commons, 2013

302

Any individual can register an available domain name for a low price;

consequently, domain names can impinge on the rights of trademark owners.

A trademark owner may seek redress against a domain name registrant from

the Lanham Act, the Federal Trademark Dilution Act (FTDA), the

Anticybersquatting Consumer Protection Act (ACPA), and the Uniform

Domain-Name Dispute-Resolution Policy (UDRP). Each avenue offers

trademark owners a unique path; however, these avenues are not mutually

exclusive. Part I of this paper outlines the domain name registration process.

Additionally, Part I describes the history of the Lanham Act, including the

enactment of the FTDA. Part II outlines the rise of the ACPA. Part III

describes the UDRP, including some criticisms of it. Part IV exposes the

strategic decisions a trademark owner can make—federal court versus the

UDRP—by looking at Facebook’s recent enforcement campaign to control

the prefix “face” and suffix “book” for social networking sites. Part V

discusses the implications of the new generic top-level domains and

Uniform Rapid Suspension System (URS) Procedure’s release. Part VI

briefly concludes by discussing the implications of this study and suggesting

avenues for future research.

I. T

HE LANHAM ACT

Since the 1990s, United States trademark owners have been bringing

actions against domain name registrants under sections 32 and 43 of the

Lanham Act.

The Lanham Act prohibits uses of trademarks that are likely

to cause confusion about the source of a product or service.

Section 32

permits suits against any unauthorized “use in commerce . . . of a registered

mark in connection with the sale, offering for sale, distribution, or

advertising of any goods or services on or in connection with which such use

is likely to cause confusion, or to cause mistake, or to deceive.”

Section 43

allows suits against any person using:

in commerce any word, term, name, symbol, or device, or any combination thereof, or

any false designation of origin, false or misleading description of fact, or false or

5. For example, Dotster charges $14.99 per year to register a .com, .net, or .org domain

name. Domain Pricing, Dotster, http://www.dotster.com/domreg/extension-popup.bml (last visited

Feb. 25, 2012). Dotster allows a user to type in a desired domain name, and the site instantaneously

tells the user if the domain is already taken and suggests alternative variations to the domain name.

Id.

6. Shiveh Roxana Reed, Sensible Agnosticism: An Updated Approach to Domain-Name

Trademark Infringement, 61 Duke L.J. 211, 228–29 (2011).

7. Lanham Trade-Mark Act, 15 U.S.C. §§ 1051–1141n (1946); 15 U.S.C. §§ 1114, 1125(a)

(2006).

8. 15 U.S.C. § 1114(1)(a).

Pepperdine Dispute Resolution Law Journal, Vol. 13, Iss. 2 [2013], Art. 4

https://digitalcommons.pepperdine.edu/drlj/vol13/iss2/4

[Vol. 13: 301, 2013]

PEPPERDINE DISPUTE RESOLUTION LAW JOURNAL

303

misleading representation of fact, which—is likely to cause confusion, or to cause

mistake, or to deceive as to the affiliation, connection, or association of such person with

another person, or as to the origin, sponsorship, or approval of his or her goods, services,

or commercial activities by another person.

The Lanham Act seeks to “prevent consumer confusion that enables a

seller to pass ‘off his goods as the goods of another.’”

To determine

whether a likelihood of confusion exists under the Lanham Act, circuit

courts have developed various multifactor tests.

In general, these tests

include non-exhaustive lists of factors pertaining to the likelihood of

consumer confusion.

A claimant need not prove that a domain name

registrant acted with bad faith, although it is still a factor in these tests.

Additionally, infringement claims are subject to a commercial use

requirement.

As a result, registration of a domain name with another’s

trademark, but not using it in commerce, does not invoke protection of the

Lanham Act.

Section 35(a) of the Lanham Act governs what damages a successful

claimant is entitled to recover: “(1) defendant’s profits, (2) any damages

sustained by the plaintiff, and (3) the costs of the action.”

In exceptional

9. 15 U.S.C. § 1125(a)(1).

10. Lang v. Ret. Living Publ’g’ Co., Inc., 949 F.2d 576, 582–83 (2d Cir. 1991) (quoting

Programmed Tax Sys., Inc. v. Raytheon Co., 439 F. Supp. 1128, 1132 (S.D.N.Y. 1977)); see

Mishawaka Rubber & Woolen Mfg. Co. v. S.S. Kresge Co., 316 U.S. 203, 205 (1942) (explaining

that the main purpose of the Lanham Act is to prevent the use of identical or similar marks in a way

that confuses the public about the actual source of goods and services).

11. Reed, supra note 6, at 229. For example, the Ninth Circuit applies an eight-factor test to

determine whether confusion is likely: (1) strength of the mark; (2) proximity of the goods; (3)

similarity of the marks; (4) evidence of actual confusion; (5) marketing channels used; (6) type of

goods and the degree of care likely to be exercised by the purchaser; (7) defendant’s intent in

selecting the mark; and (8) likelihood of expansion of the product lines. AMF Inc. v. Sleekcraft

Boats, 599 F.2d 341, 348–49 (9th Cir. 1979).

12. Reed, supra note 6, at 229. “These factors may apply differently, however, when the

trademark is used to refer to the plaintiff trademark owner’s product or service, rather than to the

defendant domain name registrant’s own product or service. In the Ninth Circuit, for example, a

three-factor nominative-fair-use test replaces the traditional likelihood-of-confusion test in these

cases.” Id.

13. See Reed, supra note 6, at 229.

14. 15 U.S.C. § 1114; Prestonettes, Inc. v. Coty, 264 U.S. 359, 368 (1924). Under the First

Amendment, commercial speech may be regulated in ways that would be impermissible if the same

regulation were applied to noncommercial expressions. Florida Bar v. Went For It, Inc., 515 U.S.

618, 623 (1995).

15. Brookfield Communications, Inc., 174 F.3d at 1052 (9th Cir. 1999) (holding that an intent

to use it commercially does not invoke the protection of the Lanham Act either).

16. 15 U.S.C. § 1117(a) (2006).

Sganga: Trademark Owner's Strategy: Litigation Versus the UDRP

Published by Pepperdine Digital Commons, 2013

304

cases, a district court may award reasonable attorney fees to the prevailing

party.

A claimant may also seek injunctive relief.

In 1996, Congress codified existing common law by enacting the

Federal Trademark Dilution Act (FTDA), which allows the owner of a

famous mark to obtain an injunction against another person who, at any time

after the owner’s mark has become famous, commences use of a mark or

trade name in commerce that is likely to cause dilution by blurring or

tarnishment.

A claimant does not need to show a likelihood of confusion,

competition, or actual economic injury.

Under the FTDA, where willful

intent to dilute is demonstrated, the owner of the famous mark is also

entitled to recover “(1) damages (2) the dilutor’s profits, and (3) costs.”

II. ANTICYBERSQUATTING CONSUMER PROTECTION ACT

While the Lanham Act and FTDA provided recourse for conflict arising

in the Domain Name System (DNS), the legal remedies for cybersquatting

victims became “expensive and uncertain.”

Cybersquatters are defined as

those who: “(1) register well-known brand names as Internet domain names

in order to extract payment from the rightful owners of the marks; (2)

with the hope of selling them to the highest bidder; (3) 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;

(4) target distinctive marks to defraud consumers, including to engage in

counterfeiting activities.”

“Because the element of direct competition or

The court shall assess such profits and damages or cause the same to be assessed under its

direction. In assessing profits the plaintiff shall be required to prove defendant’s sales

only; defendant must prove all elements of cost or deduction claimed. In assessing

damages the court may enter judgment, according to the circumstances of the case, for

any sum above the amount found as actual damages, not exceeding three times such

amount. If the court shall find that the amount of the recovery based on profits is either

inadequate or excessive the court may in its discretion enter judgment for such sum as the

court shall find to be just, according to the circumstances of the case. Such sum in either

of the above circumstances shall constitute compensation and not a penalty. Id.

Intentional use of a counterfeit mark provides different damages under Lanham Act, however. See

15 U.S.C. § 1117(b).

17. See 15 U.S.C. § 1117.

18. See 15 U.S.C. § 1125(c)(1) (2006).

19. 15 U.S.C. § 1125(c)(1) (2006).

20. Id.

21. Sporty’s Farm L.L.C. v. Sportsman’s Mkt., Inc., 202 F.3d 489, 500 (2d Cir. 2000).

22. Id. at 495 (quoting H.R.Rep. No. 106-412, at 6).

23. Lucas Nursery & Landscaping, Inc. v. Grosse, 359 F.3d 806, 809 (6th Cir. 2004) (internal

quotations omitted (citing S.Rep. No. 106-140, at 56).

Pepperdine Dispute Resolution Law Journal, Vol. 13, Iss. 2 [2013], Art. 4

https://digitalcommons.pepperdine.edu/drlj/vol13/iss2/4

[Vol. 13: 301, 2013]

PEPPERDINE DISPUTE RESOLUTION LAW JOURNAL

305

consumer confusion is often absent in trademark suits against

cybersquatters, [cybersquatting victims initially] relied on the FTDA for

help.”

However, the FTDA did not expressly prohibit the act of

cybersquatting, and cybersquatters began taking the necessary precautions to

shield themselves from liability under the FTDA.

Specifically, “‘many

cybersquatters [were] careful to no longer offer the domain name for sale in

any manner that could implicate liability . . . .’”

To remedy the perceived shortcomings of the FTDA in cybersquatting

cases,

Congress enacted the Anticybersquatting Consumer Protection Act

(ACPA) in 1999.

The ACPA, in effect, amended the Lanham Act by

creating a particular federal remedy for cybersquatting.

Specifically, the

ACPA prohibits a person from registering a domain name with bad faith

intent to profit from a mark that is confusingly similar to a registered or

unregistered mark, or dilutive of a famous mark.

The bad faith

requirement of the ACPA creates a higher burden of proof than the Lanham

Act, and the merit of an ACPA claim does not depend on whether trademark

24. Yasaman Navai, Sporty’s Farm L.L.C. v. Sportsman Market Inc.-Protecting Against

Cybersquatting or Extending the Allowable Reach of Trademark Law on the World Wide Web, 11

EPAUL-LCA J. ART & ENT. L. & POL’Y 191, 199 (2001).

25. See Virtual Works, Inc. v. Volkswagen of Am., Inc., 238 F.3d 264, 267 (4th Cir. 2001).

26. Sporty’s Farm L.L.C., 202 F.3d at 495 (quoting S.Rep. No. 106-140, at 7).

27. See Sporty’s Farm L.L.C., 202 F.3d at 496.

28. See 15 U.S.C. § 1125(d)(1)(A) (2006).

A person shall be liable in a civil action by the owner of a mark, including a personal name which is

protected as a mark under this section, if, without regard to the goods or services of the parties, that

person--

(i) has a bad faith intent to profit from that mark, including a personal name which is

protected as a mark under this section; and

(ii) registers, traffics in, or uses a domain name that--

(I) in the case of a mark that is distinctive at the time of registration of the domain

name, is identical or confusingly similar to that mark;

(II) in the case of a famous mark that is famous at the time of registration of the

domain name, is identical or confusingly similar to or dilutive of that mark; or

(III) is a trademark, word, or name protected by reason of section 706 of Title 18 or

section 220506 of Title 36. Id.

29. See 15 U.S.C. § 1125(d)(1)(A) (2006).

30. See 15 U.S.C. § 1125(d)(1)(A) (2006). “Bad faith intent to profit” are terms of art in the

ACPA, and thus, courts should not equate them with “bad faith” in other contexts. Sporty’s Farm

L.L.C., 202 F.3d at 499. Recall, “bad faith” was a factor in the Lanham Act likelihood of confusion

tests but not necessary to a finding of infringement. Id.

Sganga: Trademark Owner's Strategy: Litigation Versus the UDRP

Published by Pepperdine Digital Commons, 2013

306

infringement exists under the Lanham Act or whether trademark dilution

exists under the FTDA.

In determining whether a defendant acted with a bad faith intent to

profit from the use of a mark, a court may look at the nine, non-exhaustive

factors the ACPA provides to assist courts.

Additionally, the ACPA

exempts defendants who “believed and had reasonable grounds to believe

that the use of the domain name was a fair use or otherwise lawful.”

As for remedies, the ACPA provides that “a court may order the

forfeiture or cancellation of the domain name or the transfer of the domain

name to the owner of the mark”

for any “domain name registered before,

on, or after the date of the enactment of [the] Act.”

The ACPA also

provides an award of damages for violations of the Act, so long as the

31. See Reed, supra note 6, at 230-31.

32. See 15 U.S.C. § 1125(d)(1)(B)(i). These factors are:

(I) the trademark or other intellectual property rights of the person, if any, in the domain

name;

(II) the extent to which the domain name consists of the legal name of the person or a

name that is otherwise commonly used to identify that person;

(III) the person’s prior use, if any, of the domain name in connection with the bona fide

offering of any goods or services;

(IV) the person’s bona fide noncommercial or fair use of the mark in a site accessible

under the domain name;

(V) the person’s intent to divert consumers from the mark owner’s online location to a

site accessible under the domain name that could harm the goodwill represented by the

mark, either for commercial gain or with the intent to tarnish or disparage the mark, by

creating a likelihood of confusion as to the source, sponsorship, affiliation, or

endorsement of the site;

(VI) the person’s offer to transfer, sell, or otherwise assign the domain name to the mark

owner or any third party for financial gain without having used, or having an intent to

use, the domain name in the bona fide offering of any goods or services, or the person’s

prior conduct indicating a pattern of such conduct;

(VII) the person’s provision of material and misleading false contact information when

applying for the registration of the domain name, the person’s intentional failure to

maintain accurate contact information, or the person’s prior conduct indicating a pattern

of such conduct;

(VIII) the person’s registration or acquisition of multiple domain names which the person

knows are identical or confusingly similar to marks of others that are distinctive at the

time of registration of such domain names, or dilutive of famous marks of others that are

famous at the time of registration of such domain names, without regard to the goods or

services of the parties; and

(IX) the extent to which the mark incorporated in the person’s domain name registration

is or is not distinctive and famous within the meaning of subsection(c)(1) of section 43.

Id.

33. 15 U.S.C. § 1125 (d)(1)(B)(ii).

34. 15 U.S.C. § 1125(d)(1)(C).

35. 15 U.S.C. § 1117.

Pepperdine Dispute Resolution Law Journal, Vol. 13, Iss. 2 [2013], Art. 4

https://digitalcommons.pepperdine.edu/drlj/vol13/iss2/4

[Vol. 13: 301, 2013]

PEPPERDINE DISPUTE RESOLUTION LAW JOURNAL

307

domain name was registered after the enactment of the ACPA.

Further, the

ACPA does not preclude an award of damages under any pre-existing law.

The ACPA also protects against reverse domain name hijacking.

reverse domain name hijacking claim exists when trademark owners

“overreach” in exercising their ACPA rights.

In a reverse hijacking claim,

“a plaintiff (registrant) must show that (1) the plaintiff’s name was

“suspended, disabled, or transferred” under a registrar’s policy, (2) the

trademark owner has notice of the action, and (3) plaintiff’s use or

registration of the domain name is not unlawful.”

A plaintiff can seek

declaratory and injunctive relief, in addition to damages.

III. U

NIFORM DISPUTE RESOLUTION POLICY

To deal with the rising litigation related to domain names, ICANN

instituted the Uniform Dispute Resolution Policy (UDRP) on August 26,

1999.

The UDRP is a non-binding, alternative dispute resolution (ADR)

process designed to solve disputes between trademark

owners and domain

name registrants.

More specifically, ICANN drafted the UDRP to fight

36. See 15 U.S.C. § 1125(d)(1)(C).

37. 15 U.S.C. § 1125(d)(3) (providing that any remedies created by the new act are “in

addition to any other civil action or remedy otherwise applicable”).

38. See Eric Goldman, District Court Denies Motion to Dismiss on Reverse Domain Name

Hijacking Claim, T

ECHNOLOGY & MARKETING BLOG (Oct. 31, 2011), http://blog.ericgoldman.org/

archives/2011/10/district_court.htm (discussing a district court’s denial of a motion to dismiss on a

reverse domain name hijacking claim). Reverse hijacking argument claims are rare. Id.

39. Goldman, supra note 38.

40. Id.

41. 15 U.S.C. § 1125. In order to obtain damages, however, the claimant must show that the

person claiming rights to the domain name made “knowing and material” misrepresentations. Id.

42. FAQs on the UDRP, I

NTERNIC, http://www.internic.net/faqs/udrp.html (last visited Feb.

25, 2012). In 2011, 2,764 cases were submitted to the UDRP. Total Number of Cases per Year,

WIPO, http://www.wipo.int/amc/en/domains/statistics/cases.jsp (last visited March 1, 2012).

43. “Unless personal names have achieved trademark status they are not protected under the

UDRP . . . . In contrast, the Lanham Act provides a remedy for cyberpiracy of personal names that

do not qualify for trademark protection . . . .” Gerald M. Levine, Injunctive Relief Against Domain

Name Registrants for Unauthorized Registration of Personal Name, UDRP

COMMENTARIES (Jan.

12, 2012), http://www.udrpcommentaries.com/injunctive-relief-against-domain-name-registrants-

for-unauthorized-registration-of-personal-name/.

44. See FAQs on the UDRP, supra note 42. UDRP panel decisions, unlike arbitration, are not

binding. See Elizabeth C. Woodard, The UDRP, ADR, and Arbitration: Using Proven Solutions to

Address Perceived Problems with the UDRP, 19 F

ORDHAM INTELL. PROP. MEDIA & ENT. L.J. 1169,

1179 (2009). “Using classic arbitration was considered [by WIPO] but dismissed on the grounds

Sganga: Trademark Owner's Strategy: Litigation Versus the UDRP

Published by Pepperdine Digital Commons, 2013

308

cybersquatting.

As discussed above, cybersquatting is the practice of

registering well-known brand names as Internet domain names in order to

force the rightful owners of the marks to pay for the right to engage in

electronic commerce under their own brand name.

Cybersquatting is

profitable because it is inexpensive to register the mark of an established

company as a domain name, and such companies often pay substantial sums

of money to obtain the domain name with their mark.

ICANN also

intended the UDRP to prevent typosquatting, which involves “identifying

legitimate popular web sites and purposefully registering deceptively similar

or deliberately misspelled domain names in order to lure visitors into visiting

unrelated—and often pornographic—web sites.”

Typosquatters, like

cybersquatters, profit “if owners of the legitimate domain name are willing

to purchase the deceptive domain name to prevent further confusion” and

lost profits.

The UDRP essentially is an expedited administrative proceeding that the

owner of a trademark initiates “by filing a complaint with an approved

that it does not allow for judicial review of decisions, an element that WIPO considered crucial to

ensure the fairness of the new process. WIPO therefore concluded that an entirely new system of

ADR was required.” Id. Consequently, the UDRP is a unique blend of different forms of ADR. Id.

Some argue, however, “the desire to treat the UDRP process as less than binding arbitration

ultimately works against the UDRP’s goal of establishing a quick and inexpensive resolution

mechanism,” because the domain name registrant can file a lawsuit at any time. Chad D. Emerson,

Wasting Time in Cyberspace: The Udrp’s Inefficient Approach Toward Arbitrating Internet Domain

Name Disputes, 34

U. BALT. L. REV. 161, 175–76 (2004).

45. “The UDRP was not the first attempt to solve the cybersquatting problem using ADR. A

single registrar had previously created its own system of ADR for cybersquatting disputes, in an

effort to avoid being brought into lawsuits between trademark owners and cybersquatters. Once

more registrars were accredited, however, the U.S. government decided that cybersquatting was so

pervasive that it was necessary to create a new ADR system dedicated to hearing cybersquatting

claims.” Woodard, supra note 44, at 1178-–79.

46. See Navai supra note 24.

47. Generally, cybersquatters do not sell the same type of product as the trademark holder

does. See, e.g., Virtual Works, Inc. v. Volkswagen of Am., Inc., 238 F.3d 264, 267 (4th Cir. 2001)

(holding Internet service provider Virtual Works’s domain name “vw.net” was confusingly similar

to the Volkswagen company’s famous “VW” mark and domain name owner was motivated by bad

faith).

48. Christopher G. Clark, The Truth In Domain Names Act of 2003 and A Preventative

Measure to Combat Typosquatting, 89 C

ORNELL L. REV. 1476, 1480 (2004). For example,

“www.whitehouse.com” used to direct a viewer, such as an innocent child looking for the White

House’s website, to an adult pornography website. See In Re Parisi, SERIAL 75291235, 2004 WL

2368410 (Trademark Tr. & App. Bd. May 28, 2004). Additionally, any person can register a

Columbia top-level domain (.co). As such, it is easy to redirect a user who makes the mistake of

typing “.co” instead of “.com.”

49. Clark, supra note 48, at 1481.

Pepperdine Dispute Resolution Law Journal, Vol. 13, Iss. 2 [2013], Art. 4

https://digitalcommons.pepperdine.edu/drlj/vol13/iss2/4

[Vol. 13: 301, 2013]

PEPPERDINE DISPUTE RESOLUTION LAW JOURNAL

309

dispute-resolution service provider.”

The UDRP begins with the

registration agreement that the domain name registrant signs with the

registrar. All registration agreements include a clause that all claims

allegedly arising from abusive registrations of domain names will be decided

pursuant to the UDRP.

Consequently, a domain name registrant

(“Respondent”) is required to submit to a mandatory administrative

proceeding if a third party (“Complainant”) asserts to the applicable

Provider that:

(i) The disputed domain names registered by the Respondent are identical or confusingly

similar to a trademark or service mark in which the Complainant has rights;

and

(ii) The Respondent has no rights or legitimate interests with respect to the disputed

domain names; and

(iii) The disputed domain names have been registered and are being used in bad faith.

In order to force the transfer or cancellation of a domain name, the

Complainant must prove the existence of all three elements by a

preponderance of evidence.

The following scenarios demonstrate a

Respondent’s rights or legitimate interests with respect to the disputed

domain name:

(i) before any notice . . . of the dispute, [the Respondent’s] use of, or demonstrable

preparations to use, the domain name or a name corresponding to the domain

name in connection with a bona fide offering of goods or services; or

(ii) [the Respondent] (as an individual, business, or other organization) [has] been

commonly known by the domain name, even if [it has acquired] no trademark

or service mark rights; or

50. Uniform Domain-Name Dispute-Resolution Policy, ICANN, http://www.icann.org/en/

udrp/udrp.htm (last visited Feb. 25, 2012). “Around 60% of the UDRP disputes have been heard by

the World Intellectual Property Organization’s [(WIPO)] Domain Name Dispute Resolution Service

(DNDRS), arguably because plaintiffs are comfortable with WIPO’s aesthetic of the ‘sacredness’ of

intellectual property. The others are the CPR Institute for Dispute Resolution (CPR), National

Arbitration Forum (NAF) and the Asian Domain Name Dispute Resolution Centre (ADNDRC). The

latter replaced Canada-based eResolution (eRes), which withdrew in late 2001.” ICANN profile:

UDRP, C

ASLON ANALYTICS, http://www.caslon.com.au/icannprofile7.htm (last visited Feb. 25,

2012); see List of Approved Dispute Resolution Service Providers, ICANN, http://www.icann.org/

en/dndr/udrp/approved-providers.htm (last visited Feb. 25, 2012) (providing a list of ICANN’s

approved UDRP service providers).

51. See Uniform Domain-Name Dispute-Resolution Policy, infra note 52.

52. Uniform Domain Name Dispute Resolution Policy, ICANN, http://www.icann.org/en/

udrp/udrp-policy-24oct99.htm (last visited Feb. 25, 2012).

53. See id.; Dennis S. Prahl & Eric Null, The New Generic Top-Level Domain Program: A

New Era of Risk for Trademark Owners and the Internet, 101 T

RADEMARK REP. 1757, 1784 (2011).

Sganga: Trademark Owner's Strategy: Litigation Versus the UDRP

Published by Pepperdine Digital Commons, 2013

310

(iii) [the Respondent] is making a legitimate noncommercial or fair use of the domain

name, without intent for commercial gain to misleadingly divert consumers or

to tarnish the trademark or service mark at issue.

The following non-exhaustive

list constitutes evidence of the

registration and use

of a domain name in bad faith:

(i) circumstances indicating that [the Respondent] registered or acquired the domain

name primarily for the purpose of selling, renting, or otherwise transferring

the domain name registration to the complainant who is the owner of the

trademark or service mark or to a competitor of that complainant, for valuable

consideration in excess of your documented out-of-pocket costs directly

related to the domain name; or

(ii) [circumstances indicating that the Respondent] registered the domain name in order

to prevent the owner of the trademark or service mark from reflecting the

mark in a corresponding domain name, provided that respondent has engaged

in a pattern of such conduct; or

(iii) [circumstances indicating that the Respondent] registered the domain name primarily

for the purpose of disrupting the business of a competitor;

(iv) [circumstances indicating that the Respondent] is using the domain name [to]

intentionally attempt to attract, for commercial gain, Internet users to its

website or other on-line location, by creating a likelihood of confusion with

the complainant’s mark as to the source, sponsorship, affiliation, or

endorsement of [the Respondent’s] website or location or of a product or

service on its website or location.

The Respondent must respond to a UDRP complaint within twenty

days.

However, if the Respondent does not respond to the complaint

54. Uniform Domain Name Dispute Resolution Policy, supra note 52.

55. Because this list is non-exhaustive, panels have found bad faith in circumstances beyond

those enumerated. See, e.g., Tourism and Corporate Automation Ltd. v. TSI Ltd., AF-0096, [2000]

GENDND 66 Disputes.org/eResolution Consortium Admin. Panel March 16, 2000 (WorldLII)

(finding an employee who left his job “more or less unhappily,” then registered a domain name

identical to the trademark of his former employer with no demonstrable plans to use the name acted

in “bad faith”).

56. Initially, the UDRP’s bad faith use requirement concerned trademark attorneys because

“use” under the Lanham Act means “used in commerce.” See supra note 16. However, the “use”

requirement has not been troublesome: “Three of the four factors outlining bad faith do not require

any use per se . . . and many of the early decisions under the UDRP have similarly found bad faith in

the absence of any traditional use of the domain, indeed even in the absence of an active website.”

Analysis of Key UDRP Issues, B

ERKKMAN CENTER FOR INTERNET & SOC’Y AT HARV. U.,

http://cyber.law.harvard.edu/udrp/analysis.html (last visited Feb. 25, 2012).

57. “For example, in Bragg v. Condon (plasticdocshop.com, cosmeticdocshop.com)

FA0092528, the respondent registered two domain names using a competitor’s trademark soon after

learning of the competitor’s confidential business strategy; and in Easyjet Airline Company Ltd v.

Steggles (easyjet.net) D2000-0024, the respondent’s web site used the disputed domain name to link

to two of the complainant’s competitors.” Analysis of Key UDRP Issues, supra note 56.

58. Uniform Domain Name Dispute Resolution Policy, supra note 52.

59. Rules for Uniform Domain Name Dispute Resolution Policy, ICANN, http://www.icann.

org/en/dndr/udrp/uniform-rules.htm (last visited Feb. 25, 2012). Some commentators have argued

Pepperdine Dispute Resolution Law Journal, Vol. 13, Iss. 2 [2013], Art. 4

https://digitalcommons.pepperdine.edu/drlj/vol13/iss2/4

[Vol. 13: 301, 2013]

PEPPERDINE DISPUTE RESOLUTION LAW JOURNAL

311

within the requisite twenty days, the UDRP requires adjudication based only

on the complaint.

As a result, default judgments are frequently granted in

the UDRP proceedings.

In several cases, the UDRP panel has interpreted a

respondent’s default as an actual admission of the complaint’s assertions.

Assuming the respondent does respond, he or she can prevail by negating

any one of the complaint’s three required elements.

Under the UDRP, a “Panel shall decide a complaint on the basis of the

statements and documents submitted and in accordance with the Policy,

these Rules and any rules and principles of law that it deems applicable.”

The Panel’s decision may include transferring the domain name to the

complainant or the respondent may keep the domain name.

A complainant

may also seek cancellation of the domain name.

The UDRP does not

award injunctive relief or monetary damages.

However, because UDRP

proceedings are not binding, a dissatisfied complainant or respondent can

that UDRP is pro-claimant, and thus an unfair process, because of the twenty-day response time.

See Woodard, supra note 464, at 1188–89. While the rules of most arbitration providers give

respondents thirty days to answer a complaint, the Federal Rules of Civil Procedure only allow

defendants twenty-one days to answer a complaint. Id. at 1190; Fed. R. Civ. P. 12.

60. Rules for Uniform Domain Name Dispute Resolution Policy, supra note 59.

61. One study found that 54% of UDRP claims result in default judgments, and that 96% of

those default judgments favor the complainant. See Woodard, supra note 44, at 1192.

62. See Alcoholics Anonymous World Servs., Inc. v. Raymond, D2000-0007 (WIPO

Arbitration and Mediation Ctr. Admin. Panel March 6, 2000) (holding that “Respondent’s failure to

respond to the Complaint allows the inference that the evidence would not have been favorable to

Respondent”).

63. See Uniform Domain Name Dispute Resolution Policy, supra note 52.

64. Rules for Uniform Domain Name Dispute Resolution Policy, supra note 59. This

provision, Rule 15(a), was “promulgated to give the panel full discretion in deciding which law, if

any, to apply to any particular dispute.” Analysis of Key UDRP Issues, supra note 56. “Panelists in

a UDRP proceeding are given significantly more freedom to select important aspects of the decision-

making process than panelists in other types of ADR, most of which require the governing law of the

proceeding to be mutually agreed upon by the parties in advance.” Woodard, supra note 44, at

1195–96. Panels do rely on previous UDRP opinions as persuasive authority to help address

procedural and substantive matters though. See, e.g., Alcoholics Anonymous World Servs., Inc.,

D2000-0007.

65. Frequently Asked Questions: Internet Domain Names, WIPO, http://www.wipo.int/amc/

en/center/faq/domains.html#12 (last visited Feb. 25, 2012). “The panel decisions are mandatory in

the sense that accredited registrars are bound to take the necessary steps to enforce a decision, such

as transferring the name concerned.” Id.

66. Id. Based on WIPO’s statistical analysis of all cases decided, 1.57% end with cancellation

of the domain name, 85.07% end with transfer of the domain name, and 13.36% end with denial of

the complaint. Case Outcome (Consolidated): All Years, WIPO, http://www.wipo.int/amc/en/

domains/statistics/decision_rate.jsp?year= (last visited Oct. 30, 2012).

67. Frequently Asked Questions: Internet Domain Names, supra note 65.

Sganga: Trademark Owner's Strategy: Litigation Versus the UDRP

Published by Pepperdine Digital Commons, 2013

312

file a complaint in federal court.

WIPO claims that such appeals rarely

occur.

While providing a form of recourse after a panel decision is

necessary, some UDRP participants arguably do not feel like the costly

process of litigation is much recourse.

Accordingly, “[c]ritics have argued

that the UDRP would operate more effectively and fairly if it included an

internal review board—essentially an appellate body—that could hear

appeals.”

IV. F

ACEBOOK’S STRATEGY: LITIGATION VERSUS THE UDRP

The previous sections briefly explain how conflict under the DNS may

be resolved—through the Lanham Act, FTDA, ACPA, and the UDRP. A

critical examination of Facebook’s recent enforcement campaign to control

the prefix “face” and suffix “book” for social networking sites offers a

deeper understanding of these options. Facebook currently owns seventy-

nine active trademarks, including “Facebook,” “FB,” “Like,” “Face,” and

“Wall.”

To date, Facebook has filed sixteen UDRP complaints resulting in

68. “The accredited domain name registrars . . . implement a decision after a period of ten

days, unless the decision is appealed in court in that time.” Frequently Asked Questions: Internet

Domain Names, supra note 65. Appealing a panel decision in court is only possible if jurisdiction

exists; however, being able to appeal a UDRP panel decision to a judge was an integral part of

ICANN’s original vision in developing UDRP. See Woodard, supra note 44, at 1179.

69. Frequently Asked Questions: Internet Domain Names, supra note 65. Any decision made

by a panel under the UDRP is no more than an agreed-upon administration that is not given any

deference in federal court. See Barcelona.com, Inc. v. Excelentisimo Ayuntamiento De Barcelona,

330 F.3d 617, 626 (4th Cir. 2003) (“[B]ecause a UDRP decision is susceptible of being grounded on

principles foreign or hostile to American law, the ACPA authorizes reversing a panel decision if

such a result is called for by application of the Lanham Act.”).

70. See Woodard, supra note 44, at 1200.

71. Id. at 1200-01. “These critics claim that such a board is necessary to ‘provide uniformity

to the process,’ reduce inconsistencies among UDRP decisions,

and ‘establish principles and

precedent under the UDRP, which other lower level Panels would be required to follow.’” Id. Other

critics have proposed a change to the UDRP appeal process, such that when there is a split panel,

either side can request one additional three-person panel review. See How to Save UDRP from Bad

Panel Decisions, D

OMAIN NAME WIRE (May 1, 2008), http://domainnamewire.com/2008/05/01/

how-to-save-udrp-from-bad-panel-decisions/.

72. See Trademark Electronic Search System (TESS), U

NITED STATES PATENT AND

TRADEMARK OFFICE, http://tess2.uspto.gov/bin/gate.exe?f=searchss&state=4004:dbrjkr.1.1 (search

for live marks with “facebook” under “Owner name and address” field). On March 15, 2012,

Facebook expanded its trademark rights over the word “book” by revising its “Statement of Rights

and Responsibilities.” See Statement of Rights and Responsibilities Updates, F

ACEBOOK, https://

www.facebook.com/note.php?note_id=10151420037600301 (last visited Oct. 12, 2012). All

Facebook users must now agree to the following: “You will not use our copyrights or trademarks

(including Facebook, the Facebook and F Logos, FB, Face, Poke, Book and Wall), or any

confusingly similar marks, except as expressly permitted by our Brand Usage Guidelines or with our

prior written permission.” Id.

Pepperdine Dispute Resolution Law Journal, Vol. 13, Iss. 2 [2013], Art. 4

https://digitalcommons.pepperdine.edu/drlj/vol13/iss2/4

[Vol. 13: 301, 2013]

PEPPERDINE DISPUTE RESOLUTION LAW JOURNAL

313

the transference of thirty-seven domain names to Facebook and the

termination of two domain names.

In all of these cases, the challenged

domain name included “facebook” in its entirety, and the panels used

Facebook’s fame and notoriety as evidence of registration and use in bad

faith.

Facebook has also enforced its trademark against Bearbook,

PlaceBook, Shagbook, FacebookOfPorn, Faceporn, Lamebook, and

Teachbook; however, Facebook did not use the UDRP in these disputes.

Bearbook and PlaceBook both changed their names after receiving cease

and desist letters from Facebook.

The letters demanded that both

companies abandon their unregistered trademarks because their names

confuse users and dilute the Facebook registered trademark.

Bearbook,

now called Bruizr, is a social networking site for the hirsute, gay

community,

and PlaceBook, now called TripTrace, is a start-up site that

provides a variety of location-based services.

Neither company had the

funds to fight Facebook in a trademark battle.

While Facebook had the

option of pursuing its cause of action in federal court or the UDRP,

Bearbook and Placebook were ultimately left with no way to defend

themselves (besides fighting a costly, long battle in federal court).

This scenario raises the inadequacy of recourse for “trademark bullying”

victims.

“A trademark bully is a trademark owner who uses intimidation

73. Recent Case Activity, UDRPSEARCH, http://www.udrpsearch.com/search?query=facebook

&search=parties (last visited Oct. 12, 2012).

74. See id.

75. See Eric Goldman, Facebook’s Trademark Suit Against Teachbook Survives Motion to

Dismiss, T

ECHNOLOGY & MARKETING BLOG (Oct. 1, 2011), http://blog.ericgoldman.org/archives/

2011/10/facebooks_trade.htm.

76. See Bearbook Gets Bullied Into Changing To Bruizr, B

EAROTIC (May 10, 2011),

http://www.bearotic.com/2011/05/10/bearbook-gets-bullied-into-changing-to-bruizr/; MG Siegler,

Facebook Bullies PlaceBook Into Changing Their Name—Or The Way It’s Pronounced,

ECHCRUNCH (Aug. 10, 2010), http://techcrunch.com/2010/08/10/facebook-placebook/.

77. See Bearbook Gets Bullied Into Changing To Bruizr, supra note 76; Siegler, supra note

76.

78. See, e.g.,

BRUIZR, http://bruizr.com/tour.aspx (last visited Feb. 28, 2012).

79. See Siegler, supra note 76.

80. See Bearbook Gets Bullied Into Changing To Bruizr, supra note 76; Siegler, supra note

76. It is also possible that they realized their likelihood of success was slim.

81. See Gerald M.Levine, Determining When Trademark Protection Becomes Bullying, UDRP

COMMENTARIES (Mar. 5, 2011), http://www.udrpcommentaries.com/determing-when-trademark-

protection-becomes-bullying/ (“In connection with a study mandated by The Trademark Technical

and Conforming Amendment Act of 2010, the USPTO requested feedback from U.S. trademark

owners, practitioners, and others regarding their experiences with litigation tactics . . . . Those

Sganga: Trademark Owner's Strategy: Litigation Versus the UDRP

Published by Pepperdine Digital Commons, 2013

314

tactics in order to eliminate potential competitors and remove them from the

market place.”

Trademark bullies enforce their trademark rights beyond

any reasonable interpretation of trademark law and capitalize on the fact that

most of their victims will be unable to pay the litigation costs associated

with defending a trademark infringement or dilution charge.

Trademark

bullying victims may bring a reverse hijacking claim under the ACPA or

seek a declaratory judgment;

but, if the victim does not have the funds to

defend itself in court, it is unlikely that it will not have enough funds to file

either of these claims. Under the UDRP, the victim of a trademark bully

may not file a UDRP complaint against the trademark owner.

However, if

a trademark bully files a UDRP complaint, and the panel finds that the

complaint was brought in bad faith, such as in an attempt to reverse hijack or

to harass the domain name holder, the panel “shall declare in its decision

that the complaint was brought in bad faith and constitutes an abuse of the

administrative proceeding.”

Unlike Bearbook and Placebook, Shagbook—an adult dating website—

refused to willingly abandon its name.

On May 24, 2010, Shagbook

applied for a trademark with the United States Patent and Trademark Office

(USPTO).

The USPTO published the mark “shagbook” in the Trademark

Official Gazette on January 25, 2011;

thereafter, Facebook filed an

opposition to stop Shagbook from registering a trademark under that name.

In Shagbook’s answer to the opposition, Shagbook alleged that the term

answering the ABA-IPL survey believed that the issue ‘should be left to the judiciary on a case-by-

case basis.’”).

82. Benjamin Ashurov, What is a trademark bully?, T

RADEMARK BULLY, http://www.

trademarkbully.com/?page_id=23 (last visited March 1, 2012).

83. Id. (listing Facebook as number one on the “Biggest Bully List”).

84. See supra text accompanying notes 38–40.

85. Rules for Uniform Domain-Name Dispute-Resolution Policy, supra note 50. If Bearbook

filed a UDRP complaint against Facebook, Bearbook would have to prove that Facebook registered

its domain name in bad faith.

86. Id.

87. Joe Mullin, Shagbook Attacks Facebook’s Trademark, Calling It Generic,

PAIDCONTENT

(Aug. 4, 2011), http://paidcontent.org/article/419-shagbook-attacks-facebooks-trademark-calling-it-

generic/.

88. Trademark Status and Document Retrieval, U

NITED STATES PATENT AND TRADEMARK

OFFICE, http://tdr.uspto.gov/search.action?sn=85046798# (last visited Oct. 12, 2012).

89. Id. “Any party who believes it will be damaged by the registration of the mark may file a

notice of opposition (or extension of time therefor) with the Trademark Trial and Appeal Board. If

no party files an opposition or extension request within thirty (30) days after the publication date,

then within twelve (12) weeks of the publication date a certificate of registration should issue.” Id.

90. Trademark Trial and Appeal Board Inquiry System, USPTO TTABVUE, http://ttabvue.

uspto.gov/ttabvue/v?pno=91200221&pty=OPP (last visited Oct. 12, 2012).

Pepperdine Dispute Resolution Law Journal, Vol. 13, Iss. 2 [2013], Art. 4

https://digitalcommons.pepperdine.edu/drlj/vol13/iss2/4

[Vol. 13: 301, 2013]

PEPPERDINE DISPUTE RESOLUTION LAW JOURNAL

315

“facebook” is generic, and thus, incapable of trademark protection.

Shagbook’s registration of “shagbook” and Facebook’s opposition of

“shagbook” are still pending in the USPTO.

However, Shagbook’s

cancellation of “facebook” was dismissed and terminated on March 29,

2012.

Facebook most likely has not filed a UDRP complaint against Shagbook

because the strength of Facebook’s UDRP complaint depends on the

outcome of the pending opposition proceeding. If the opposition is

sustained, Facebook has more leverage to demand that Shagbook abandon

its domain name. If, however, the opposition is not sustained, and

“shagbook” registers, a UDRP panel would likely not prevent a trademark

registrant from using its own trademark as a domain name.

Unlike with Shagbook, the UDRP is a viable option for Facebook’s

dispute with FacebookOfSex.com, a site launched by adult social

networking company FriendFinder.

On April 13, 2011, Facebook filed suit

in the Northern District of California against FriendFinder and its

subsidiaries, claiming “FacebookOfSex” is too similar to Facebook’s

trademarked name.

The suit, which includes trademark dilution and

cybersquatting claims, seeks injunctive relief, revenue from the site, actual

damages, and punitive damages.

The action is still pending in the district

court, but the parties stipulated to stay the action in order to reach a

settlement.

91. Id. Shagbook claimed Facebook has been “trademark bullying” by “abusively using

oppositions, litigation, and threats of the same to maintain a competitive market advantage.” Mullin,

supra note 87; see Stephen Hodson, Could Facebook’s lawsuit against Shagbook cost it the

‘Facebook’ trademark, T

HE INQUISITR (Aug. 5, 2011), http://www.inquisitr.com/132617/could-

facebooks-lawsuit-against-shagbook-cost-it-the-facebook-trademark/.

92. Trademark Trial and Appeal Board Inquiry System, supra note 90.

93. Trademark Status and Document Retrieval, U

NITED STATES PATENT AND TRADEMARK

OFFICE, http://tsdr.uspto.gov/#caseNumber=78574726&caseType=SERIAL_NO&searchType=

statusSearch (last visited Oct. 12, 2012).

94. Michael H. Berkens, Facebook Finally Sues Owner Of FacebookofSex.com But Still Not

XXXBook.com or XXXMatch.com, T

HE DOMAINS (Apr. 18, 2011), http://www.thedomains.com/

2011/04/18/facebook-finally-sues-owner-of-facebookofsex-com-but-still-not-xxxbook-com-or-

xxxmatch-com/.

95. Id.

96. Id.

97. Facebook, Inc. v. Various, Inc. et al Document 55, J

USTIA DOCS (Nov. 8, 2011), http://

dockets.justia.com/docket/california/candce/4:2011cv01805/239648/. “The Whois information for

Facebookofsex.xxx was updated this week and now reflects Facebook, Inc. as the registrant of the

domain. The web address was first registered back on December 10, 2011 by a resident of Quebec,

shortly after general availability of .XXX domain names began.” J.B., Facebook snags adult

Sganga: Trademark Owner's Strategy: Litigation Versus the UDRP

Published by Pepperdine Digital Commons, 2013

316

Facebook most likely would have prevailed in a UDRP proceeding here.

Facebook and FacebookOfSex are confusingly similar because the domain

name includes the “facebook” mark in its entirety. FriendFinder has no

rights or legitimate interests with respect to FacebookOfSex. And

circumstances indicate that FacebookOfSex has been registered and is being

used in bad faith; specifically, because “FaceBookOfSex includes many of

the same features as Facebook, such as profiles with photos and personal

info, the ability to upload and share contact, and live chats,” a likelihood of

confusion is created with respect to Facebook’s affiliation.

The UDRP,

however, does not award damages as a remedy.

FriendFinder’s estimated

2011 revenues are $333 million, and FacebookofSex.com received over 4

million monthly visitors;

100

such solvency makes FacebookOfSex.com a

good target for litigation.

101

Moreover, “[t]ech companies concerned with

their online image have won much more marginal trademark disputes [in

federal court] than this one.”

102

In this case, Facebook probably strategized

that the UDRP’s expediency does not trump the litigation’s potential

damages.

Unlike with FriendFinder, the UDRP may be the best (or only

available) forum for Facebook’s dispute with Faceporn.com. Faceporn.com

is a pornographic website that allows “its users to create profiles, join

groups, upload photos and video, and conduct live chats.”

103

Retro Invent is

a Norwegian company doing business as Faceporn.com, and Thomas

Pedersen, a resident of Norway, is the principal of Retro Invent.

104

entertainment domain name Facebookofsex dot-XXX, FUSIBLE (Feb. 25, 2012), http://fusible.com/

2012/02/facebook-snags-adult-entertainment-domain-name-facebookofsex-dot-xxx/.

98. Joe Mullin, Facebook Sues FriendFinder, Peeved Over FacebookOfSex.com Website,

PAIDCONTENT (Apr.15, 2011), http://paidcontent.org/article/419-facebook-sues-friendfinder-peeved-

over-facebookofsex.com-website/.

99. See Frequently Asked Questions: Internet Domain Names, supra note 65.

100. Michael H. Berkens, FriendFinder Pulls Down FacebookofSex.com, T

HE DOMAINS (Apr.

29, 2011) http://www.thedomains.com/2011/04/29/friendfinder-pulls-down-facebookofsex-com/.

101. Ironically, CEO Marc Bell theorizes that FriendFinder’s shares have received a boost from

the recent Facebook IPO filing. See Eric Savitz, FriendFinder Finds New Friends; Stock Triples In

2 Weeks (Updated), F

ORBES (Feb. 9, 2012), http://www.forbes.com/sites/ericsavitz/2012/02/09/

friendfinder-finds-new-friends-stock-triples-in-2-weeks/2/.

102. Mullin, supra note 98.

103. Venkat Balasubramani, Facebook Fails In Its Argument That Faceporn Is Under US

Jurisdiction For Using A .com, T

ECHDIRT (Dec. 7, 2011), http://www.techdirt.com/articles/2011

1206/11351416992/facebook-fails-its-argument-that-faceporn-is-under-us-jurisdiction-using-

com.shtml.

104. Facebook, Inc. v. Pederson Document 46, J

USTIA DOCKETS & FILINGS, http://docs.justia.

com/cases/federal/district-courts/california/candce/3:2010cv04673/233043/46/ (last visited March 1,

2012). Faceporn.com is currently “offline for a redesign.” FaceBook.com Sues FacePorn.com,

Special VPS (Oct. 22, 2010), http://www.specialvps.com/facebookcom-sues-faceporncom/.

Pepperdine Dispute Resolution Law Journal, Vol. 13, Iss. 2 [2013], Art. 4

https://digitalcommons.pepperdine.edu/drlj/vol13/iss2/4

[Vol. 13: 301, 2013]

PEPPERDINE DISPUTE RESOLUTION LAW JOURNAL

317

Facebook sued Pedersen and Retro Invent for trademark dilution and

infringement, in addition to cybersquatting, in the Northern District of

California.

105

Facebook moved for a default judgment after neither

defendant responded; however, on November 29, 2011, the district court sua

sponte issued an order to show cause for lack of personal jurisdiction.

106

December 12, 2011, Facebook filed its response to the order to show

cause.

107

On March 2, 2012, the presiding magistrate judge issued a report

and recommendation to deny Facebook’s motion for default judgment,

finding that Facebook failed to show that the defendants purposefully

directed their conduct at California.

108

This is an opportune scenario for utilizing the UDRP: “Recourse to

the courts involves perplexing jurisdiction .†.†. issues, which the UDRP was

meant to avoid.”

109

As a domain name registrant, Retro Invent is required to

submit to the UDRP, regardless of jurisdiction.

110

Facebook filed its

complaint on October 15, 2011.

111

Nearly a year has passed, and Retro

Invent still owns the domain name Faceporn.com.

112

The UDRP

105. Facebook, Inc. v. Pederson, JUSTIA DOCKETS & FILINGS, http://docs.justia.com/cases/

federal/district-courts/california/candce/3:2010cv04673/233043/46/ (last visited March 1, 2012).

106. Id. Facebook alleges that Faceporn is a highly interactive website that has 250 users in

California and 1000 users in the United States, and that Faceporn targeted “a U.S. audience” by

registering its website with a domain name ending in.”.com.” These allegations alone, without facts

showing that Faceporn’s California viewer base was “an integral component” of Faceporn’s business

model and profitability, falls short of meeting Facebook’s burden to establish that the exercise of

personal jurisdiction over Defendants is proper, as “[n]ot all material placed on the Internet is, solely

by virtue of its universal accessibility, expressly aimed at every state in which it is accessed. . . .” Id.

107. See id.

108. See id.

109. Julia Hornle, The Uniform Domain Name Dispute Resolution Procedure: Is Too Much of A

Good Thing A Bad Thing?, 11 SMU

SCI. & TECH. L. REV. 253, 284 (2008).

110. See supra note 54.

111. See Facebook, Inc. v. Pederson, supra note 104.

112. Whois faceporn.com, W

HOIS, http://www.whois.com/whois/faceporn.com (last visited

Oct. 12, 2012). One has to wonder why the district court has been sitting on this jurisdictional issue

for so long. On September 30, 2011, the district court judge randomly assigned Facebook’s motion

for default judgment to a magistrate judge; the magistrate judge issued the order to show cause

regarding personal jurisdiction. Facebook, Inc. v. Pederson Document 46, supra note 105. As to

dispositive pretrial matters, magistrate judges may enter findings and recommendations, which are

reviewed by the district judge de novo. See § 3505 The District Courts, 13 Fed. Prac. & Proc. Juris.

§ 3505 (3d ed.). However, a magistrate judge may conduct all proceedings and order the entry of

judgment upon consent of the parties. See id. Here, the parties did not consent to magistrate

jurisdiction. Therefore, the magistrate judge cannot dismiss this case for lack of personal

jurisdiction. Rather, the magistrate judge can issue a recommendation to the district court. The

Sganga: Trademark Owner's Strategy: Litigation Versus the UDRP

Published by Pepperdine Digital Commons, 2013

318

Administrative Procedure, on the other hand, is generally completed within

sixty days of the date the WIPO Center receives the complaint.

113

Facebook

technically could have simultaneously filed a complaint in the district court

and with WIPO. It is, however, important to note that “in the event of any

legal proceedings initiated prior to or during an administrative proceeding in

respect of a domain name dispute that is the subject of the complaint, the

Panel shall have the discretion to decide whether to suspend or terminate the

administrative proceeding, or to proceed to a decision.”

114

In sum, Facebook

may have had a more satisfactory result with the UDRP, assuming Facebook

could prove confusing similarity and bad faith.

115

The UDRP was not a viable option for Facebook in its dispute with

Lamebook. Lamebook is a Facebook parody blog that “invites users to

submit funny or embarrassing photos, status updates, wall posts and other

tidbits from Facebook profiles.”

116

This case is unique because Lamebook

preemptively filed suit against Facebook in the Western District of Texas,

seeking declaratory judgment on November 4, 2010.

117

Four days later,

Facebook sued Lamebook in the Northern District of California.

118

The

California case was dismissed without prejudice, and the parties settled the

Texas case on August 24, 2011.

119

The parties agreed Lamebook would

docket does not reflect that the district court has reviewed the magistrate judge’s report and

recommendation though.

113. WIPO Guide to the Uniform Domain Name Resolution Policy (UDRP), WIPO,

http://www.wipo.int/amc/en/domains/guide/#b2 (last visited March 1, 2012). Some critics have

argued that “aggrieved parties . . . should proceed straight to court without stopping at the UDRP” if

they “truly want to save time and money.” Emerson, supra note 44, at 163. This criticism is based

on a domain name registrant’s ability to circumvent, or even completely avoid, mandatory

participation in the UDRP by initiating a lawsuit. Id. at 173. Here, however, it is highly unlikely

Retro Invent would bring a lawsuit against Facebook, considering Retro Invent is not answering

Facebook’s complaint.

114. Rules for Uniform Domain-Name Dispute Resolution Policy, supra note 52. “In the event

that a Party initiates any legal proceedings during the pendency of an administrative proceeding in

respect of a domain-name dispute that is the subject of the complaint, it shall promptly notify the

Panel and the Provider.” Id.

115. Because both Facebook and Faceporn are eight letter words with two syllables, and

Faceporn does offer a service—albeit one that includes porn—very similar to Facebook, Facebook

could argue that Faceporn is likely to create Internet user confusion. Moreover, Facebook owns the

trademark “Face.”

116. Catharine Smith, Lamebook SUES Facebook, T

HE HUFFINGTON POST (May 25, 2011),

http://www.huffingtonpost.com/2010/11/08/lamebook-sues-facebook_n_780482.html.

117. Complaint at 1, Lamebook LLC v. Facebook, Inc., No. 10-0833 (W.D. Tex. Nov. 4, 2010).

118. Facebook Inc. v. Lamebook LLC, J

USTIA DOCKETS & FILINGS, http://dockets.justia.com/

docket/california/candce/3:2010cv05048/233994/ (last visited March 1, 2012).

119. Id. “It’s unclear whether Facebook settled because it was concerned about the possible

outcome of litigating a case in Lamebook’s hometown of Austin, Texas, or whether it wanted to

avoid the potential negative publicity associated with the case. Or maybe Facebook was concerned

that, given Lamebook’s argument that it was a parody website, the case would have turned out

Pepperdine Dispute Resolution Law Journal, Vol. 13, Iss. 2 [2013], Art. 4

https://digitalcommons.pepperdine.edu/drlj/vol13/iss2/4

[Vol. 13: 301, 2013]

PEPPERDINE DISPUTE RESOLUTION LAW JOURNAL

319

keep its name, but add this prominent disclaimer to its site:

120

“This is an

unofficial parody and is not affiliated with or associated with, or endorsed or

approved by, Facebook.”

121

Here, Lamebook could not have filed a UDRP complaint because there

was no declaratory judgment equivalent in the UDRP. However, by

definition, “any such declaration [by the district court] shall have the force

and effect of a final judgment or decree . . . .”

122

Because a UDRP decision

is not binding in federal court, a UDRP declaratory judgment equivalent

would be futile.

Facebook also sued Teachbook, an online community for teachers, in

the Northern District of California on August 18, 2010, choosing not to use

the UDRP.

123

On May 3, 2011, the district judge granted Teachbook’s

motion to dismiss for lack of personal jurisdiction because Teachbook does

not allow people from California to join the site.

124

On May 6, 2011,

Facebook re-filed its complaint in the Northern District of Illinois.

125

September 26, 2011, Teachbook moved to dismiss the complaint for failure

to state a claim upon which relief can be granted, which the district court

denied.

126

A year later, Facebook and Teachbook reached a settlement

agreement.

127

Under this agreement, Teachbook changed its name to

TeachQuest.

128

similar to the prominent Louis Vuitton Malletier, S.A. v. Haute Diggity Dog, LLC case (507 F.3d

252), which found that the defendant Haute Diggity Dog did not infringe or dilute the Louis Vuitton

trademark with its Chewy Vuiton line of products. Regardless of the reason, the settlement is

surprising considering how protective Facebook is of its intellectual property rights.” Keri S. Bruce,

Facebook and Lamebook Settle Trademark Dispute, A

DLAW BY REQUEST (Sept. 20, 2011),

http://www.adlawbyrequest.com/2011/09/articles/in-the-courts/facebook-and-lamebook-settle-

trademark-dispute/.

120. Id.

121. L

AMEBOOK, www.lamebook.com (last visited March 1, 2012).

122. 28 U.S.C. § 2201. The main reason for seeking declaratory judgment is to avoid being

sued.

123. Docket – Facebook v. Teachbook (CA), S

CRIBD, http://www.scribd.com/doc/55132878/

Docket-Facebook-v-Teachbook-CA (last visited March 1, 2012).

124. Order Granting Motion to Dismiss at 4, Facebook, Inc. v. Teachbook.com LLC, No. 10-

3654 (N.D. Cal. May 3, 2011), ECF No. 35.

125. Facebook, Inc. v. Teachbook.com LLC, 11-CV-3052, 2011 WL 4449686 at *1 (N.D. Ill.

Sept. 26, 2011).

126. Id.

127. Facebook, Teachbook reach settlement in lawsuit,

ESCHOOL NEWS (Sept. 7, 2012),

http://www.eschoolnews.com/2012/09/07/facebook-teachbook-reach-settlement-in-lawsuit/.

128. Id.

Sganga: Trademark Owner's Strategy: Litigation Versus the UDRP

Published by Pepperdine Digital Commons, 2013

320

While the UDRP may have alleviated the jurisdictional and timeliness

problems Facebook encountered here, it is unclear whether Facebook could

have prevailed with a UDRP panel.

129

Evidence of bad faith is lacking

because it is unclear if Teachbook is using its domain name to intentionally

attempt to attract Internet users to its website, by creating a likelihood of

confusion as to its affiliation with Facebook. Teachbook’s site, aesthetically

at least, looks nothing like facebook.com.

130

Furthermore, Facebook has no

incentive to risk losing in the UDRP, where Teachbook can afford to defend

itself.

131

So long as Facebook has a valid claim (and is not “trademark

bullying”), Facebook can use the financial strain of a long lawsuit as part of

its strategy. Just as Lamebook and FriendFinder settled, Teachbook

eventually settled too.

The previous cases illustrate when litigation can be useful, and

conversely, when the UDRP can be useful. If removing the site is the

complainant’s primary goal, the UDRP can be a more efficient mechanism

than federal court. A trademark owner must strategically choose its forum.

V. N

EW GTLDS AND THE UNIFORM RAPID SUSPENSION SYSTEM

PROCEDURE

However, understanding how to best protect one’s trademark in the

DNS is about to become even more important with ICANN’s release of its

new generic top-level (gTLDs) domains. Developed to increase

competition, ICANN accepted applications for new gTLDs from January 12,

2012 to May 30, 2012.

132

The basic cost of submitting an application was

$185,000 per gTLD.

133

The submission process is projected to last at least

five months, as ICANN must determine if each applicant has the financial,

technical, and operational capabilities to run a TLD on its own.

134

Prior to

ICANN’s approval of a new gTLD, third parties have a seven-month

129. “I doubt this kind of claim would hold up under UDRP rules (unless a “friendly” panelist

got the case), which is probably why Facebook has resorted to the US courts.” Kevin Murphy,

Facebook sues TeachBook.com for cybersquatting, D

OMAININCITE (Aug. 24, 2010), http://

domainincite.com/facebook-sues-teachbook-com-for-cybersquatting/.

130. See W

AYBACK MACHINE, www.archive.org (type in teachbook.com).

131. See id.

132. Reveal Day 13 June 2012 – New gTLD Applied-For Strings, ICANN

NEW GTLDS, http://

newgtlds.icann.org/en/program-status/application-results/strings-1200utc-13jun12-en (last visited

Oct. 12, 2012). On June 13, 2012, ICANN released which gTLDs companies applied for during this

round. Id. Not surprisingly, Apple applied for the gTLD “apple.” Id.

133. Matthew Humphris, gTLDs explained: What’s the process and how much will you have to

pay ICANN?, G

EEK.COM (Jun. 20, 2011) http://www.geek.com/articles/geek-pick/gtlds-whats-the-

process-and-how-much-pay-icann-20110620/.

134. Id.

Pepperdine Dispute Resolution Law Journal, Vol. 13, Iss. 2 [2013], Art. 4

https://digitalcommons.pepperdine.edu/drlj/vol13/iss2/4

[Vol. 13: 301, 2013]

PEPPERDINE DISPUTE RESOLUTION LAW JOURNAL

321

opportunity to file an objection to an application on several grounds,

including an objector’s trademark rights.

135

To assist with the release of the new gTLDs, ICANN developed the

Uniform Rapid Suspension System (URS) Procedure.

136

The URS is an

expedited supplement

137

to the UDRP, designed to remedy clear-cut, blatant

cases of infringing conduct.

138

The final resolution of a URS proceeding

takes a mere twenty days.

139

The URS includes an initial administrative

review that is conducted within two business days of a complaint’s filing.

140

If the complaint is in order, the URS Provider will notify the domain name’s

registry that it must “lock” the domain name, thereby precluding the domain

name from being transferred or altered.

141

The proposed standards for URS

examiners to apply in rendering their decisions are the same as those in the

UDRP, but the burden of proof is higher.

142

Complainants in URS

proceedings must prove their cases with clear and convincing evidence.

143

a URS complainant prevails, the contested domain name would be

suspended for the duration of the registration period, not transferred.

144

Further, the cost of the URS will be much less than the UDRP. URS fees

will be about three hundred dollars per decision,

145

whereas the UDRP filing

135. Objection and Dispute Resolution, ICANN NEW GTLDS, http://newgtlds.icann.org/en/

program-status/objection-dispute-resolution (last visited Oct. 12, 2012).

136. See WIPO Observations on New gTLD Dispute Resolution Mechanism, WIPO,

http://www.wipo.int/amc/en/domains/newgtld/#2 (last visited Oct. 12, 2012).

137. Complainants may use either or both procedures. See For GNSO Consideration: Uniform

Rapid Suspension System (URS), ICANN 1, http://www.icann.org/en/topics/new-gtlds/draft-

proposed-procedure-urs-04oct09-en.pdf (last visited March 2, 2012).

138. Id.

139. Dennis S. Prahl & Eric Null, The New Generic Top-Level Domain Program: A New Era of

Risk for Trademark Owners and the Internet, 101 T

RADEMARK REP. 1757, 1783 (2011). A

Registrant will have fourteen days to respond to a URS complaint. Id.

140. Id.

141. For GNSO Consideration: Uniform Rapid Suspension System (URS), supra note 137, at 6–

142. Id. at 8.

143. Id. “Proving bad faith by clear and convincing evidence could be difficult . . . . The URS’s

heightened burden of proof arguably overcompensates and protects the respondent too much, as

ACPA proceedings have invoked a lower burden of proof with success.” Prahl & Null, supra note

139, at 1783–85.

144. For GNSO Consideration: Uniform Rapid Suspension System (URS), supra note 137, at 8.

If the complainant wanted the domain name transferred, the complainant would have to file a UDRP

complaint as well. Id.

145. “Both WIPO and the National Arbitration Forum NAF have publicly stated that, with IP

attorney arbitrator fees averaging $650 per hour, there is no way they can procure the services of

Sganga: Trademark Owner's Strategy: Litigation Versus the UDRP

Published by Pepperdine Digital Commons, 2013

322

fee is usually about a thousand dollars.

146

“Once it’s finally implemented,

the URS will provide a very streamlined process, considerably faster and

cheaper than the UDRP (and vastly faster and cheaper than the litigation

route).”

147

While the UDRP, and now the URS, are designed as alternatives to

litigation, the URS may promote more litigation. Because the URS is so

inexpensive and quick, trademark owners could use the URS to suspend an

infringing site and then file in federal court to obtain damages. For a mere

three hundred dollars, Facebook could have suspended

FacebookOfPorn.com within twenty days of filing a URS complaint and

then filed in federal court. While the URS holding will not affect a federal

court’s decision, at least during the action’s pendency, FacebookOfPorn.com

would have been suspended. A favorable URS holding could also help

leverage a substantial settlement. Furthermore, a trademark owner

dissatisfied with a URS decision may feel motivated, or at least financially

capable, to “try again”—either in the UDRP or through litigation. Or a

successful URS complainant may want to file a UDRP complaint to cancel

or transfer the domain name. Because the standard of proof is higher in the

URS, arguably, a successful URS complainant should be a successful UDRP

complainant. Will the UDRP panels respect the decisions of the URS

panels? How the URS fits into a trademark owner’s strategy will be

interesting.

VI. C

ONCLUSION

Internet users assume, and implicitly trust, that a company’s name or

brand will correlate to its domain name. Because domain names play such

an integral role in consumer perception of a site’s source, trademark owners

credible experts at that price, much less cover their own administrative costs.” Philip Corwin,

ICANN Names WIPO as Exclusive Arbitrator of Legal Rights Objections to New gTLDs, I

NTERNET

COMMERCE ASSOCIATION (Feb. 17, 2012), http://www.internetcommerce.org/WIPO_LRO.

146. Id.

147. Kevin Goldberg, ICANN’s New Uniform Rapid Suspension System, C

OMMLAWBLOG

(Dec. 13, 2011), http://www.commlawblog.com/2011/12/articles/intellectual-property/icanns-new-

uniform-rapid-suspension-system/.

ICANN is woefully behind on developing the implementation details for [URS] . . . .

ICANN staff had indicated . . . that a URS [Implementation Advisory Group] would be

launched within a month after that October 2011 gathering, but more than a quarter year

later we have yet to see any progress on this front. That unexplained delay may well be

due to ICANN’s implausible promise to trademark owners that the URS would carry a

fee of only $300.

Corwin, supra note 145. WIPO also expressed its doubts, calling the process “overburdened.” See

WIPO Observations on New gTLD Dispute Resolution Mechanism, supra note 136.

Pepperdine Dispute Resolution Law Journal, Vol. 13, Iss. 2 [2013], Art. 4

https://digitalcommons.pepperdine.edu/drlj/vol13/iss2/4

[Vol. 13: 301, 2013]

PEPPERDINE DISPUTE RESOLUTION LAW JOURNAL

323

must police the use of their trademark in domain names. A trademark owner

may seek redress against a domain name registrant from the Lanham Act,

the FTDA, the ACPA, and the UDRP. Soon, trademark owners may enforce

their rights against domain name registrants through the URS as well.

Trademark owners must strategically choose how they want to enforce

their trademark rights against domain name registrants. Generally, a

trademark owner takes one of these two routes: 1) the trademark owner files

a complaint in federal court, pleading trademark infringement under the

Lanham Act, trademark dilution under the FTDA, and/or cybersquatting

under the ACPA; or 2) the trademark owner files a UDRP complaint. Soon,

trademark owners will have a third option—the URS. And, as discussed in

the previous section, trademark owners may feel compelled to combine the

use of the URS with the UDRP or litigation.

A critical examination of Facebook’s recent enforcement campaign to

control the prefix “face” and suffix “book” for social networking sites offers

a deeper understanding of a trademark owner’s strategy. Beyond the

elements of proof necessary for any of these options, a trademark owner

must weigh the potential for damage recovery in litigation versus the

expediency and lower cost of the UDRP. As evidenced by Facebook’s

enforcement campaign, sometimes the price of the UDRP can actually weigh

against its use. And, while the line between trademark bullying and

aggressive trademark protection is a fine one, Facebook’s campaign

demonstrates that the threat of litigation is a powerful tool that leaves many

alleged infringers with little recourse other than a costly litigation battle.

Should ICANN implement a mechanism to allow domain name

registrants to cheaply file trademark-bullying complaints after receiving

cease and desist letters? This, in effect, would be analogous to filing a

declaratory judgment claim with the UDRP. The futility of a non-binding

declaratory judgment was discussed in the previous section; nevertheless, it

may stop some trademark owners from pursuing their cause of action in

court. Further steps should be taken to develop an inexpensive mechanism

for trademark bullying victims to defend themselves.

Sganga: Trademark Owner's Strategy: Litigation Versus the UDRP

Published by Pepperdine Digital Commons, 2013