Saturday, February 27, 2016

Cybersquatting by Website Designer

Cybersquatting by a website designer is seldom a thought of concern by potential clients who are in the midst of working or are considering the work of a website designer for their start up a business.  Terms are rarely dickered with to ensure the handling of the domain selection and eventful registration.  When an unauthorized individual obtains control of a domain a business may be jeopardized.  Holders of domains by virtue of them having registered them in their names, run the risk of being deemed cybersquatters.
The ACPA, known as Anticybersquatting Consumer Protection Act was promulgated to address domain names being registered using a trademark.  The ACPA was addressing as well the potential for consumer confusion created by these domains and the harmful effect on the original business owner.  The ACPA seeks to prevent the divergence of business away from the original owner.  Any person registering a domain that is identical or confusingly similar to another individual’s or company’s trademark for commercial gain purposes is liable under the ACPA.
In Jysk Bed’N Linen, Inc. v. Monosij Dutta-Roy, the U.S. District Court for the Northern District of Georgia granted Jysk Bed’N Linen an injunction that required the defendant to transfer the domain names he had registered in his own name to the Jysk Bed’N Linen.   Jysk Bed’N Linen’s motion for summary judgment was also granted by the District Court on defendant’s counterclaims.  Before the 11th Circuit Court of Appeals was the appeals by the defendant of the District Court decisions under pursuant to 28 U.S.C. § 1291.
The 11th Circuit determined that there were items pending for the District Court to resolve and that it did not have jurisdiction over Jysk’s claims brought against defendant pursuant to  §§ 43(a) and (c) of the Lanham Act, 15 U.S.C. §§ 1125(a) and (c), and pertinent state law.   However, the 11th Circuit did rule on where it had jurisdiction regarding the review of the District Court’s injunction pursuant to 28 U.S.C. § 1292(a)(1) imposed on the defendant.  After the 11th Circuit analyzed the evidence before it in light of the 4 factors for determining the merits of an injunction, the Court affirmed the injunction rule by the District Court.  The Court found that the defendant abused its discretion, the plaintiff had a strong likelihood of success on the merits, without the injunction the plaintiff’s business would be irreparably harmed, little to no harm would be incurred by the defendant, and the public interest would be negatively affected without the injunction.

The lesson that should be adhered to is to confirm actual ownership of the domain upon registry.  By course of business events involving matters unrelated to domain ownership, plaintiff learned that it did not own its domain.  It also learned that its domain “” had expired.  Its website was operational.  The plaintiff also learned that defendant had registered three other domains using the plaintiff’s mark ‘BY DESIGN.’  These events are obviously unsettling to any business that is beginning in its first three to five years of operation, where establishing a brand is so important along with customer recognition.  At any levels of business duration, the sanctity of a business’ domain and trademark is crucial to stay competitive.  The last course of events that any business needs or anticipates is for a contractor to abscond with its intellectual property.

*Jysk Bed’N Linen, Inc. v. Monosij Dutta-Roy, Case No. 13-15309 (11th Cir., Dec. 16, 2015).

Lorenzo Law Firm is “Working to Protect your Business, Ideas, and Property on the Web."
Copyright 2016, all rights reserved Lorenzo Law Firm, P.A.

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