The ACPA creates a new section within the Lanham Act which deals specifically with domain name disputes and is designed to penalize and prevent "bad faith intent" to profit from someone else's trade-mark by registering a related domain name. The ACPA provides that a person shall be liable in a civil action by the owner of a mark if, without regard to the goods or services of the parties, that person has a bad faith intent to profit from that mark and registers, traffics in, or uses a domain name that is confusingly similar to that mark. As such, cybersquatters who offer to sell domain names to trade-mark owners at a markup or who actually use a domain name in a way that damages the goodwill of a company's trade-mark, may be forced to relinquish the domain name if "bad faith intent" can be proven. The ACPA provides nine factors that a court will consider when assessing bad faith intent. Where bad faith intent is found, the court may order the forfeiture or cancellation of the domain name or the transfer of the domain name to the owner of the mark.
Most interesting with respect to the ACPA is that it provides US trade-mark owners with an in rem action, which allows the trade-mark owner to sue the property in dispute (and not the individual) in the judicial district in which the domain name register, domain name registry, or other domain name authority that registered or assigned the domain name is located, as long as such authority is located within the United States. This is extremely useful in cases where there would otherwise be a problem for the court in exercising personal jurisdiction over a foreign domain name registrant. And while the prevailing view in US courts at this time is that a domain name is not property, Congress has conveniently deemed a domain name property for the purposes of the ACPA.
Also of interest, is that the ACPA does not include express limitations with respect to the scope of domain names (specific top level domains, i.e., .com, .org, and .net) that can be affected by the ACPA. Instead, the focus is on a registrar's, registry's or other domain name authority's location. The definition of the latter includes a situs where documents sufficient to establish control and authority regarding the disposition of the registration and use of the domain name are located. It would, therefore, appear that when US trade-marks are at stake, any domain name, by the fact of its having been registered or processed in sufficient manner on American soil, may be within the scope of the ACPA. In light of the reach of the in rem action and due process limitations, the ACPA provides that the in rem action is only available where jurisdiction over the person is not available or the complainant has been unable to locate the registrant after a good faith search, which includes sending an e-mail to the contact address as provided on the registration information for the domain name and publishing notice of the action as the court may direct after the action is filed.
When a complaint is filed pursuant to the ACPA and written notification is provided by a trade-mark owner to a registrar in the form of a copy of the filed and stamped complaint, the registrar shall expeditiously deposit with the court documents sufficient to establish the court's control and authority regarding the disposition of the registration and use of the domain name. Following such deposit, the registrar must refrain from transferring, suspending or otherwise modifying the domain name during the pendancy of the action, except upon order of the court. The obligation of the registrar under the ACPA dovetails with the obligations of registrars who as a result of being accredited by The Internet Corporation for Assigned Names and Numbers (ICANN), have agreed to comply with ICANN policies, one of which is the Uniform Dispute Resolution Policy (UDRP). The UDRP provides that registrars will upon presentation of, inter alia, an order by a court of competent jurisdiction, cancel or transfer a domain name registration. Note that the UDRP has also been adopted by registrants otherwise not under the control of ICANN. In every case where the UDRP is adopted, domain name registrants agree, upon registration of a domain name, to allow registrars in certain circumstances to cancel or transfer their domain name registration. In this manner, enforcement mechanisms have been created contractually and location of the registrar, registry or authority, becomes important.
Canadians, as such, who have acquired US rights in a trade-mark may use the ACPA to pursue a domain name registrant regardless of the domain name registrant's location. In a best case scenario the US trade-mark owner will obtain control over the domain name in dispute even when such domain name is not in use, if the requirements under the ACPA are met (i.e., location of registrar, registry or authority). An order will issue from the US court with respect to the domain name which the registrar is contractually bound to abide by.
Canadian defendants, as well as other foreign defendants, should be prepared to pack their bags for the US when served with a complaint under the ACPA. In the recent decision of Heathmount A.E. Corp. v. Technodome.com and Destinationtechnodome.com, the US District Court of Virginia, home of the Network Solutions Inc. registrar and domain name registry, on December 29, 2000, dismissed a Canadian defendant's motion to dismiss on grounds of forum non conveniens and international comity, an action filed by a Canadian resident with rights to a US trade-mark. The Federal Court judge held that in the interests of justice, the cybersquatting dispute should be adjudicated before a US court.
In the view of the US District Court judge, countries without cybersquatting legislation offer the owners of US trade-marks avenues for relief which are, at best, speculative. In addition, while foreign courts often apply the laws of other jurisdictions, the de facto inexperience of jurisdictions without a body of case law involving domain names and without specific anti-cybersquatting laws suggests an inability to competently apply foreign legislation such as the ACPA. In response to the defendant's arguments that the proof required to defend the action was located in the foreign jurisdiction where both the plaintiff and defendant resided, and that an annual salary of C$30,000 precluded the defendant from presenting an adequate defense before a US court, the US District Court stated that unless the defendant was able to show that it will "literally be financially impossible to litigate in this district" and that "witnesses and documents will be entirely unavailable here", such argument was unpersuasive.
By creating standards that are relative to the US position, and in light of the fact that the US is an intellectual property exporter and a world leader in domain name litigation and the passing of specific anti-cybersquatting legislation, it would appear that wrestling a domain name dispute from the hands of a US court may be difficult for some time to come. The US in international discussions has openly encouraged foreign jurisdictions to pass anti-cybersquatting legislation, which would inevitably lead to reciprocity in terms of enforcement of court orders. The benefit to US interests is clear. As such, the decision in Heathmount is interesting for the weight the US placed on the absence in a foreign jurisdiction of anti-cybersquatting legislation and its disregard for a foreign jurisdiction's trade-mark legislation and common law causes of action. Regardless of such broad policy concerns, however, the more immmediate impact of the approach in Heathmount is fourfold. It protects the interests of trade-mark owners by offering Canadians who use trade-marks in the US with an avenue of protection, and its in rem provision allows for the claw-back of domain names owned by registrants located throughout the world. Unfortunately, it removes an opportunity from our courts to further develop a body of law involving domain names, and it will do nothing to quell the ire of domain name registrants who continue to believe their legitimate interests in domain names are being subordinated to those of trade-mark owners.
Alan Gahtan is a partner with Toronto-based Mann & Gahtan LLP in association with US-based Brown Raysman Millstein Felder & Steiner LLP where he practices information technology and e-commerce law with an emphasis on B2B exchanges.