Cease & desists for domain trademark infringement -- Webmaster options/rights?

[christougher]

Hi all. Please note this is a theoretical question and not based on any real experience.

I'm wondering what the options are for webmasters who receive cease & desist letters concerning trademarks in their domain names.

I'm aware corporations have a legal obligation to defend their trademarks. But I've done a little research and it seems that, if a webmaster were to face a lawsuit because of a trademark in a domain name, the case would center around whether the website confuses visitors into believing the site is affiliated with the trademark owner.

Take, for example, a blog named MicrosoftWindowsReview.com (again, this is theoretical). Microsoft Windows is clearly trademarked. However, let's say the web design was completely dissimilar to any Microsoft look, showed no MS logos, and had a tagline clearly indicating something like "a critical look at Windows by a non-fan" or something to that effect.

It might seem obvious that this does not confuse visitors into thinking the blogger is affiliated with Microsoft.

So my question is... what options would a webmaster with no budget (like a college student, say) have? If they were to ignore cease & desist letters and face a lawsuit, how would they be represented if they could not afford a lawyer?

Further, if they were to lose a lawsuit and they are worth nearly nothing, what would the consequences be? Turn over the name/site? What if they couldn't afford to pay "damages" if they were to lose?

Again, nothing like this has happened to me, but I am curious about it. I'm not asking for legal advice... I'd just like some insight into this. Thanks!

[Ted S]

Wonderful question and man do I like hypothetical.

In order to discuss your hypothetical and the question in general it’s important to understand the various claims that can be made by a trademark holder in the event of a domain name dispute.

Trademark infringement – This claim is the most common way of defending a mark and is what you most often see discussed here. To establish infringement, the offending name must be creating consumer confusion which can either be established through logical inferences or through actual cases. Merely having a similar name is generally not enough in these cases – the offending name and site would need to get in the way of the trademarked name. Trademark infringement closely looks at geographical areas (i.e. companies that serve different areas), niche (companies with similar names may coexist if they serve different markets) and the generic nature of the name (it’s much more difficult to establish infringement if your company is named “ABC Products” than “Zulu Hulu Crazy Mumus”.

Cybersquatting - This claim is unique to domain names and revolves around the idea that a domain is registered in order to sell it back to the company whose name it is. However, many other things have triggered successful cybersquating claims such as offers to sell a trademarked name to the trademark holder even when it was clearly registered for purposes other than selling. Having a domain sitting idle without a clear purpose can be another issue with cybersquating claims.

Dilution – Trademark dilution is not something you often see questions about on forums but it is incredibly important in understanding trademark issues as they relate to domains. Dilution protection exists only for companies who can show their mark is “famous” within their category. This does not mean the company has to be known by 90% of the population but rather that people in the industry have a strong and consistent knowledge of the name. In the event a name is deemed famous, dilution claims allow the company far broader protection than is seen with infringement claims. Dilution is what major companies are able to use when a domain is similar but not necessarily confusing. Here the claim is that even though consumers may know the difference between the two businesses/ sites, the existence of the second site is its self harmful to the major brand because of that brand’s size and fame.

Dilution is the claim that would likely be used in your example. Microsoft is likely to be considered a famous mark, and has been in the past, thus a company offering a service in the niche of computers or outside of it would be at serious risk not because consumers were directly confused but because the company would [potentially] be taking away from the strength of Microsoft’s brand. Confusion is not always required.

In regards to your second question, since trademark infringement is a civil matter, if someone were to ignore a C&D letter and go to court they would likely be forced to find representation or represent themselves. The fact that they are short on money does not negate or diminish the claim from the trademark holder nor is it a criminal case where they must be given adequate representation. To this end there are many organizations that provide free counsel to certain types of cases (i.e. the ACLU for issues of free speech). There are also attorneys who will work on payment plans or on contingency fees in the event of a successful counter-claim and money being won. But at the end of the day it is, generally, on you to find your representation.

When judgments are issued it is generally based on actual damages plus the ability to deliver and pay. This is not to say a judgment can not be issued that is above and beyond the resources someone has but simply that you don’t see punitive damages for millions of dollars if the person being sued has never had millions of dollars and does not have the ability to come up with it either. In the event the judgment is more than you have a payment plan is arranged. Many civil suits, domain name and otherwise, end with people having garnished wages for years and years.

So at the end of the day what’s important to understand here in regards to your hypothetical is that just because you’re not violating the “classic” claim does not mean you’re off the hook.

Of course I’m Not an Attorney and while I have been through a good deal of education on this subject, there’s a lot more to each of these issues than I’ve gone into. I would highly recommend that anyone interested in, or concerned about, this sort of issue picks up the book Cyber Law.

[rcj662]

Great points made by Ted s.

I would stay away from any trademark if possible. Even if you win in court the cost could be more than the domain is worth.

[Dave Zan]

So my question is... what options would a webmaster with no budget (like a college student, say) have? If they were to ignore cease & desist letters and face a lawsuit, how would they be represented if they could not afford a lawyer?

One option to explore should you find yourself in that situation:

http://internetjustice.org/

[christougher]

Hey thanks so much for educating me on this, Ted!

Thanks to rcj and Dave, too. If anyone else has any other points to bring up it would be just as much appreciated.