Franchisors Brandish Pair of Powerful Weapons in the War on Cybersquatters.

Just before the start of the new millennium, President Clinton signed into law a bill that will combat what is commonly referred to as "cybersquatting." The new law, known as the Anti-cybersquatting Consumer Protection Act (ACPA), expands the reach of U.S. trademark law to cover the practice

Also in late 1999, Internet Corporation for Assigned Numbers and Names (ICANN), adopted its Uniform Domain Name Dispute Resolution Policy (UDRP) (which can be found at www.icann.org/udrp/udrp.htm). With these two developments, trademark owners' arsenals are bristling with new weaponry to attack the problem of cybersquatting.

Cybersquatting occurs when a person registers an Internet address, known as a domain name, that contains the name or trademark of another party. Many franchisors have encountered this problem and had been frustrated in their attempts to recover their own domain name. There are two kinds of top level domain names: the commonly-used .com, .org., and .net suffixes, known as generic top level domain names (or gTLD's), and country-code top level domain names (or ccTLD's), such as .ca (Canada), .de (Germany), .fr (France), .it (Italy), and .jp (Japan). The ACPA covers all top level domains, gTLDs and ccTLDs.

Before the ACPA was enacted, or ICANN's rules adopted, trademark owners, such as franchisors, seeking to attack cybersquatters often faced an uphill battle. One option for addressing problems with gTLD's was to use the Network Solutions, Inc. (NSI) domain name dispute procedures. Under these procedures, a franchisor had to prove that its trademark registrations were identical to the offending domain name. Many franchisors who use characters such as an apostrophe (') or an ampersand (&) in their registered marks were stymied by NSI's policy, since a domain name cannot include such characters and, accordingly, could be confusingly similar but not identical. Attempts to initiate a conventional federal trademark lawsuit required a franchisor, among other things, to obtain jurisdiction (often over a party that gave false information to the domain name registry) and prove the elements of an infringement claim (e.g., commercial use).

The ACPA

As domain names have become a more important part of branding and commercial identification, akin to but different than traditional trademarks, so too does the ACPA provide relief that is akin to, but different than, the relief available in traditional trademark infringement actions. In general terms, the ACPA allows a trademark owner to bring a claim under the Lanham Act if another party registers, traffics in, or uses the trademark owner's name or mark (or one that is confusingly similar to, or dilutive of, the mark); and has done so with a "bad faith intent to profit." The law applies not only to registered marks, but also to unregistered trademarks and individuals' names.