[bctt tweet=”With more than 3 million trademarks currently registered with the USPTO, that is a large minefield to navigate; and new names are imagined and reserved daily.” username=”drosslaw”]
Creating the right name for your business website is a challenge in itself. You want your name to be memorable, easily pronounced and spelled, brief and, perhaps most importantly, indicative of the services you offer.
Business owners today not only have to think of a good domain name to capture traffic, they must also create something sufficiently unique in their industry space to avoid legal repercussions. With more than 3 million trademarks currently registered with the USPTO, that is a large minefield to navigate; and new names are imagined and reserved daily.
The stakes for a domain name misstep – and business name misstep, in general – are high: domain takedown, potential damages for trademark infringement, dilution, or even an ACPA or URDP suit for cybersquatting if the likeness was intentional in order to drive traffic to your site (I’ll urge you now to never, ever do this). Online and e-commerce businesses are especially vulnerable to domain takedowns because of the nature of the business structure. All that to say this: you want to begin building your online presence on the right foot.
When you do hit upon your perfect name, the dangers avoided in the naming process become resources for you to use to protect the online space that you’ve carved out for yourself. You’ll have the power to capitalize your online presence through licensing, sale, or affiliation agreements. You’ll be able to prevent others from using your name (even subsequent trademark applicants!). Most importantly, you’ll be able to build your internet footprint to serve your business with peace of mind.
AVOIDING INFRINGEMENT IN DOMAIN SELECTION
The best way to ensure that you don’t set yourself up for failure (or litigation) is by conducting the right market research. Such a search includes the USPTO’s TESS system for federal trademarks, state business and trademark databases, and a broad internet search (also called a common law search).
You can hire an attorney to see you through this process; but if you’re a DIYer, you’ll need to utilize basic trademark law to identify what to avoid in the naming process. Understanding trademarks will also help you identify names that can be protected. Being a proactive business owner, you should plan for this investment by picking a protectable name.
The Purpose of a Trademark. The heart of trademark law is distinguishing one good or service provider from another. A trademark gives its owner exclusive use of a name or logo within a particular industry in order to help consumers identify the source of a good or service (namely, you). The following rules of law serve this overarching purpose.
Distinctiveness. A trademark will not be issued for simply any combination of words; if this were the case, much of our vocabulary would be privately owned and removed from commercial public use. Imagine trying to pitch your app idea without being able to use the words “phone,” “internet,” or, of course, “app.” Instead, a trademark must be distinctive; it can’t simply name or describe the good or service. A good mark must be one of the following:
- “Suggestive” – words that suggest a characteristic or quality of the good or service in a way that requires the consumer to use his or her imagination (e.g. “ivory” hand soap)
- “Arbitrary” – words that bear no correlation to the good or service (e.g. “Dove” hand soap)
- “Fanciful” – words that do not exist in any language (e.g. “Gojo” soap)
Note: it is possible for a “merely descriptive” mark to be distinct enough for trademark protection if it becomes associated with the good or service by the general public. However, this is a rare avenue to distinctiveness.
Likelihood of Confusion. Here is the meat of the matter for a hopeful domain name registrant. Since trademarks are source identifiers, names that are likely to confuse consumers about the source of a product or service infringe upon a trademark. Only names with no or low likelihood of confusion with registered marks are safe to use. Trademarks are also industry-specific, which is why it’s possible for Delta Airlines and Delta Faucets to both hold trademarks.
CONDUCTING YOUR RESEARCH
You should search for the identical word or phrase that you want to use for your domain, as well as alternative spellings and similar words or phrases. The idea is to make sure that there are no marks that look or sound the same as yours within your industry.
Finding a similar mark doesn’t necessarily mean you are prohibited from using your brainchild. If you do find a similar mark, you should ask yourself the following questions to vet the results:
- Does my website offer goods or services that compete with the discovered mark? If so, you operate in the same market space and are at higher risk for confusion.
- Are the goods or services associated with each mark offered in the same sales channels? If your new blend of coffee and a similarly-named company’s coffee filters would appear on the same shelf at the local grocery store, you operate in similar sales channels (even if you’re not in the same industry).
- Would a customer be expected to type in my name instead of the discovered mark in order to get to their site? If so, your domain name would divert business from the trademark owner and you run the risk of trademark infringement and even cybersquatting.
- Is the other company well-known? Extremely well-known companies (think Apple and Microsoft) have accrued significant good will in their trademarks. In these cases, even similar marks that do not operate in the same industry may be denied protection or prosecuted for what’s called trademark dilution.
If you come across conflicts in your search, you should bring your results to a trademark attorney for analysis before registering your domain name. If you’re dead-set on a particular name, you may be able to approach the trademark owner about a license or, with the trademark owner’s permission, a statement of concurrent use.
PROTECTING YOUR DOMAIN NAME
OK, so you’ve done your due diligence. You’ve picked a name that ticks off every box on your wishlist, conducted a clean search, and set up shop online. If you’ve planned ahead and a trademark is financially palatable, it’s wise to take the extra step and register. Otherwise, you may have to compete with similar domain and business names, which means a weaker brand for your business.
If you’re content with your domain name and nothing more, knowing your rights as a domain owner will help you protect your space (and monetize it). There’s plenty of money to be had in licensing, selling, or affiliating the name of your domain if it’s in-demand. But a popular name will also mean that you have to protect it from others who might try to leapfrog your rights.
Beating any trademark applicant to the market gives you “prior user” status with regards to your domain name. Under the common law, trademark rights are based on priority of use within a given territory – essentially, he who uses a mark first, prevails. Trademark registration is prima facie (meaning preliminary or, literally, “at first sight”) evidence that the mark was in use as of the application date. A trademark applicant has priority against all other users – except those who can show that they used the same or similar mark prior to the application date.
When you start operating under your domain name, you’ll have a common law trademark in that name. At a minimum, you’ll have exclusive rights to the mark in your geographic market and any zone of natural expansion. If you have a strong enough online presence, your market may be nationwide and you’ll be able to summarily defeat a federal trademark application that is confusingly similar to your domain name. Nipping a trademark application in the bud during the opposition process will require you to be diligent in researching new entries to federal and state registries. Mark monitoring services like ours are available if you’d rather not police your brand personally. Attacking a trademark after registration is more difficult (especially after five years of registration where additional safe harbors kick in) but it is possible.
DEFENDING AGAINST BIG BUSINESS CYBER BULLIES
Cyber bullying in the context of domain names is, unfortunately, very real. The Anti-Cybersquatting Consumer Protection Act (ACPA) and its international equivalent, the Uniform Domain Name Dispute Resolution Policy (UDRP) are two bodies of law with noble goals: to prevent cybersquatters from using domain names to financially exploit a registered mark.
However, these laws are sometimes used to nefarious ends. Monetary damages under the ACPA and UDRP can top $100,000 and case law is relatively silent as to whether priority of use matters in cybersquatting cases. Add the expense of defending a cybersquatting lawsuit, and you can see why it’s easy for large corporations to strong-arm small businesses into relinquishing domain name rights for a meager sum of money (or nothing at all). This kind of domain name bullying happens even when the defendants are legitimate domain name owners operating in good faith.
You can reduce the likelihood of cyber bullying by taking these steps to properly develop your website:
- Set up and operate an active website at the web address
- Display your domain name prominently throughout the site
- Brand your goods or services with the domain name – or include a call to action to “Visit us online” at the web address
- Where possible and reasonable, sell your goods and services directly through the website
- Grow your site’s organic exposure through advertising, marketing, and SEO optimization
Forewarned is forearmed; but the information is only valuable if you put it into timely practice. Be proactive in every way and you’ll soon find that you’re not just building a business, but a competitive advantage as well.
Thank you for your readership and continuing interest in Daniel Ross & Associates! Feel free to reach out to us or post a comment below to continue the discussion.
