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IP and Tech Law Alert: Dispute Looms Over Launch of .SUCKS Domain

May 21, 2015

The recent decision by the Internet Corporation for Assigned Names and Numbers (ICANN) to create a number of new domains -- including a .SUCKS domain -- is driving a wedge between trademark owners, ICANN, and those that seek to register names under the new domains.

The tension originates with the opportunity for registration of names under numerous new top-level domains, including the controversial .SUCKS domain. The early registration period, or sunrise period, allows brand owners who have registered marks to purchase the name before the names become available to the general public. The two month sunrise period began on March 30, 2015, with general availability beginning on June 1, 2015. One major cause of friction is the $2,499 fee registered trademark owners must pay the company running .SUCKS in order to secure their company's domain name. That fee is significantly higher than other recent top-level domain offerings have been.

For years, there has been similar tension between trademark owners, on one side, and cybersquatters, typosquatters, and cyberpirates on the other. Generally, cybersquatters or cyberpirates register a name identical or confusingly similar to a mark owned by another, typically for the purpose of profiting from the registration’s transfer to the mark’s owner. In the case of typosquatters, common misspellings of famous marks are generally registered for similar purposes.

Trademark owners, when faced with use of their marks in a domain name, often choose to purchase the domain name from the cybersquatter or cyberpirate. Others opt to address the issue through the Uniform Domain-Name Resolution Policy (UDRP). The UDRP is an administrative proceeding, administered through a number of dispute resolution regimes, such as the World Intellectual Property Organization’s (WIPO) arbitration fora. Still others litigate in federal court under the Anti-Cybersquatting Consumer Protection Act (ACPA).

Under the UDRP and under the ACPA, relevant considerations include whether the domain name is identical or confusingly similar to a trademark or service mark in which the complaining party has rights; whether the registrant has legitimate or bona fide interests in the domain name’s use; and whether the domain name’s registrant registered and/or is using the domain name in bad faith, such as to divert traffic to its own products or to sell the name to the owner of the mark for an inflated price.

A recent WIPO administrative panel decision, Saks & Company LLC v. Saksfifthavenue-boutique.org, illustrates a common scenario. In that case, the Complainant was a well-known and respected retail store chain. It owned numerous registrations for the famous SAKS and SAKS FIFTH AVENUE marks and domain names, and had used those marks for more than 100 years. The Respondent, in contrast, registered the domain name but had no rights in the SAKS or SAKS FIFTH AVENUE marks. Indeed, the domain name appeared to be an avenue for Respondent to sell its own goods and/or to collect potential customer information from those that visited the Respondent’s website.  Given that the domain name at issue appeared to be an attempt to lure Complainant’s customers to Respondent’s site, the WIPO panel had no trouble finding that Respondent’s use and registration of the domain name was in bad faith. The panel, after concluding that the Respondent’s domain name was identical or confusingly similar to Complainant’s marks and that Respondent lacked any rights or legitimate interests in the domain name, ordered the domain name be transferred to Complainant. See WIPO Domain Name Decision: D2015-0372.

Like the disputes between mark owners and registrants of similar domain names, the current dispute between mark owners, ICANN and registrants of .SUCKS involves claims of trademark and service mark infringement, bad faith use or registration, and free speech considerations. Trademark owners claim the .SUCKS domain invites legalized extortion (especially in view of the high registration fees during the sunrise period); the other side claims the name itself rightly suggests a place for someone to vent their complaints or views about a product, brand or company. And, as in many domain name disputes, some trademark owners will seek to register a .SUCKS domain name or will purchase it from a registrant who obtained it first. Still others will challenge the registrations under the ACPA and/or seek a transfer of the offending name in WIPO or other arbitration regimes. Indeed, threats of litigation are already being traded by business groups and domain owners, particularly after recent requests by business groups and intellectual property associations and law firms asked the Federal Trade Commission and its Canadian counterpart to investigate the company behind the .SUCKS domain.

Take Away: With the general availability of the .SUCKS domain names beginning on June 1, trademark and service mark owners may have fewer opportunities to obtain the [company name].SUCKS name in which their marks may exist. It is not yet clear how domain names incorporating identical or similar registered marks will be viewed with the addition of the .SUCKS domain. However, it is virtually certain that at least some litigation will result over the competing interests.