Cybersquating & business name Trademark - Chicken before the egg

[Edvin]

Greetings,

In California I'm planning on opening a "small" brick&mortar business as first time entrepreneur.
As you can imagine, I'm breaking my piggy bank to invest in myself for a long endeavor.

After much research I've settled on a business name that is available for me to:

1) Trademark at federal level
2) Acquire LLC entity name for state
3) Acquire Doing Business As (DBA)
​

However, I found a cybersquater that is asking $xx,xxx US dollars for the respective domain name

I plan to proceed with the business name and use a an alternative domain name (i.e. add "center" to the domain name).

My question is the following:
Do I have any grounds for trademarking the name and then issuing "cease & desist letter"?
I learned that Lanham Act (https://keytlaw.com/netlaw/recover-domain-name/) places duty on mark owners to take appropriate action to protect their marks when they discover the infringement.

Thanks in advance.
Edvin

 

[quincy]

Greetings,

In California I'm planning on opening a "small" brick&mortar business as first time entrepreneur.
As you can imagine, I'm breaking my piggy bank to invest in myself for a long endeavor.

After much research I've settled on a business name that is available for me to:

1) Trademark at federal level
2) Acquire LLC entity name for state
3) Acquire Doing Business As (DBA)
​

However, I found a cybersquater that is asking $xx,xxx US dollars for the respective domain name

I plan to proceed with the business name and use a an alternative domain name (i.e. add "center" to the domain name).

My question is the following:
Do I have any grounds for trademarking the name and then issuing "cease & desist letter"?
I learned that Lanham Act (https://keytlaw.com/netlaw/recover-domain-name/) places duty on mark owners to take appropriate action to protect their marks when they discover the infringement.

Thanks in advance.
Edvin

You can register a domain name that uses your trademark as long as the domain name is available. The domain name does not have to be identical to the one held by someone else. Once you start your business and use your trademark in commerce, you can register your mark with the USPTO (or you can file an Intent to Use trademark application now to reserve the name).

When you establish rights in your trademark through its use as an identifier for your goods or services, you can be in a position to wrest away the domain name you want from the current holder of the domain name if you can show consumer confusion will be or has been generated by the other domain name that has your trademark in its name.

The other way to get the domain name you want is to purchase it from the holder. He is not a cybersquatter if he purchased the domain name before you used the name for your business.

 

[Edvin]

... show consumer confusion ...

Thanks for the quick reply Quincy...

Sounds like "buy this domain" is "not" grounds for "consumer confusion" when it is held for sole purpose of monetizing it at premium as appose to selling it at market value. Interestingly, it seems that any other commerce behind the domain name can be considered ground for confusion.

 

[FlyingRon]

When you establish rights in your trademark through its use as an identifier for your goods or services, you can be in a position to wrest away the domain name you want from the current holder of the domain name if you can show consumer confusion will be or has been generated by the other domain name that has your trademark in its name.

Probably not. Domain names are not driven by trademark law. Despine the assertion that the person is "cybersquatting" if the domain was registered long before the company and trademark was established, they are not under the UDRP a cybersquatter. The UDRP cybersquatting requires a definite bad faith registration. For instance, if they saw that a company "SPRINT" had not registered SPRINT.COM and specifically went and registered it with the attempt to deprive SPRINT from such that would be cybersquatting (this is not an idle example, a good friend who worked for MCI at the time actually did this).

Just because a guy has registered a domain "EdsStore.COM" even though he's not intending ot use it doesn't mean that someone who later creates a business EdsStore can snatch the domain.

Further, UDRP isn't cheap or quick. The arbitration fee is running between $1500 and $4000 these days.

What he can do is prevent a company from using that domain in commerce in a way that would confuse. That would shut down the use, but would not hand over the domain.

 

[Edvin]

...can prevent a company from using that domain ... shut down the use, but would not hand over the domain.

Great info...

 

[quincy]

Probably not. Domain names are not driven by trademark law. Despine the assertion that the person is "cybersquatting" if the domain was registered long before the company and trademark was established , they are not under the UDRP a cybersquatter. The UDRP cybersquatting requires a definite bad faith registration. For instance, if they saw that a company "SPRINT" had not registered SPRINT.COM and specifically went and registered it with the attempt to deprive SPRINT from such that would be cybersquatting (this is not an idle example, a good friend who worked for MCI at the time actually did this).

We are not disagreeing. I made that same distinction myself.

Just because a guy has registered a domain "EdsStore.COM" even though he's not intending ot use it doesn't mean that someone who later creates a business EdsStore can snatch the domain.

Again, we are not disagreeing. I mentioned the need to show consumer confusion has been generated by the use of a domain name that has another's trademark in its name. If consumer traffic is directed away from a trademark holder's website, that can be evidence of confusion.

Further, UDRP isn't cheap or quick. The arbitration fee is running between $1500 and $4000 these days.

No argument there.

What he can do is prevent a company from using that domain in commerce in a way that would confuse. That would shut down the use, but would not hand over the domain.

Agreed - and previously noted. Or he could purchase the domain name, negotiating a price. He is in a better position to negotiate a price once he has an established trademark. He has no bargaining power right now.

 

[quincy]

Thanks for the quick reply Quincy...

Sounds like "buy this domain" is "not" grounds for "consumer confusion" when it is held for sole purpose of monetizing it at premium as appose to selling it at market value. Interestingly, it seems that any other commerce behind the domain name can be considered ground for confusion.

The domain name holder cannot be shown to have registered the name for profit when the trademark at the time the domain name was purchased did not exist.

A domain name is simply a web address. There are many domain names that are similar - look at all of those similar to freeadvice.com, for example. This only becomes an issue when the domain name works to confuse consumers or tries to capitalize off a famous trademark.

 

[Edvin]

...negotiating a price. He is in a better position to negotiate a price once he has an established trademark...

Thanks for the advice, that is my current plan.
After trademarking the business name I'll attempt to negotiate it for a reasonable amount (say $200) before I invest in my marketing material.
Otherwise, they can hold on to a domain name that no-one can use because of trademark infringement.

 

[PayrollHRGuy]

Not necessarily noone. If a business that is not confusing in commerce to your business but with the same or similar name could want it.

To use an example that has been used previously in the thread, let's say Sprint Taxi Service wants to use the domain sprintDOTcom they could if it were available.

 

[quincy]

Thanks for the advice, that is my current plan.
After trademarking the business name I'll attempt to negotiate it for a reasonable amount (say $200) before I invest in my marketing material.
Otherwise, they can hold on to a domain name that no-one can use because of trademark infringement.

I think your plan is a sound one.

And, as earlier noted, similarities in domain names often are a nonissue. On the whole, consumers are relatively smart. They are unlikely to be confused by similar names that offer different goods or services.

And, when there IS confusion and consumers are duped into believing one site is another, to the detriment of a trademark holder, there are legal solutions available if necessary.

Good luck.