Cybertelecom

The next element is a determination that the domain name owner acted in bad faith intent to profit (it is not clear whether this necessitates that the activity be commercial in nature). [Lucas] [Interstellar Starship 946] [Anlin Slip 11] This is where the unique nature of online activity is key. In order to facilitate court’s determinations of bad faith, Congress provided nine factors for consideration:

the trademark or other intellectual property rights of the person, if any, in the domain name; [Chatam]
1. [Rearden Sec. II (where defendant used name in domain name for website where it provides numerous services and where defendant applied for trademark in name, defendant had demonstrated some intellectual property rights in domain name)]
the extent to which the domain name consists of the legal name of the person or a name that is otherwise commonly used to identify that person (See also Personal Names);
1. Virtual Works, Inc. v. Volkswagen of America Inc., 238 F.3d 264, 269 (4th Cir. 2001) "domain names that are abbreviations of a company's formal name are quite common. To view the use of such names as tantamount to bad faith would chill Internet entrepreneurship with the prospect of endless litigation." See also [Rearden Sec. II (recognizing "Rearden" as an legitimate abbreviation of "Rearden Commerce")]
the person's prior use, if any, of the domain name in connection with the bona fide offering of any goods or services;
1. Bosley Medical Institute, Inc. v. Kremer, 403 F.3d 672, 681 (9th Cir. 2005) (quoting H.R. Rep. No. 106-412 at 11 (1999) "This factor is not intended to create a loophole that otherwise might swallow the bill, however, by allowing a domain name registrant to evade application of the Act by merely putting up a noninfringing site under an infringing domain name."
2. See also [Rearden Sec. II]
the person's bona fide noncommercial or fair use of the mark in a site accessible under the domain name; [Lucas 6th Cir 2004] [Gallo SDTX 2001] [Lampke]
1. “the use of a domain name for purposes of comparative advertising, comment, criticism, parody, news reporting, etc., even where done for profit, would not alone satisfy the bad-faith intent requirement . . . . This factor is not intended to create a loophole that otherwise might swallow the bill, however, by allowing a domain name registrant to evade application of the Act by merely putting up a noninfringing site under an infringing domain name.” H.R. REP. NO. 106–412, at 11 (1999).
2. Lamparello v. Falwell, 420 F.3d 309, 313 (4th Cir. 2005) (“Congress leftlittle doubt that it did not intend for trademark laws to impinge the First Amendment rights of critics and commentators.”);
3. Harrods Ltd. v. Sixty Internet Domain Names, 157 F. Supp. 2d 658, 673 (E.D. Va. 2001) (“To ensure that speech protected by the First Amendment is not jeopardized by the ACPA, a court should consider a registrant's ‘legitimate noncommercial or fair use of the mark in a website that is accessible under the domain name at issue'”).
the person's intent to divert consumers from the mark owner's online location to a site accessible under the domain name that could harm the goodwill represented by the mark, either for commercial gain or with the intent to tarnish or disparage the mark, by creating a likelihood of confusion as to the source, sponsorship, affiliation, or endorsement of the site; [Toronto]

Where trademark owner did not have an online location, creation of gripe site to complain about plaintiff "could not have been intended to divert customers from the mark owners' online location. [Lucas Nursery p 810]
Where defendant created a gripe site about trademark owner, but only posted defendant's complaint, did not include a link to defendant's website, did not include contact information, used a privacy service so that even the domain name registration would not reveal who defendant was, court found that it could not be found that defendant sought to divert traffic from plaintiff's site to defendant's site. [Career Agents Network Slip p 11, 14]
Where domain name owner created a gripe site that complained about plaintiff, and domain name owner provided now means of learning who domain name owner was, it could not be said that domain name owner was still trying to divert business from plaintiff to domain name owner where the parties did not compete directly with each other in the marketplace. [Career Agents Network Slip p 12]
[Rearden Sec. II where litigants lines of business are vastly different, "there does not exist a strong likelihood of confusion amongst the relevant consuming public regarding the products and services offered by the parties."
Where defendant, allegedly a former attorney at plaintiff Levinson Axelrod (levinsonaxelrod.com), registered levinsonaxelrod.net and allegedly wrote material critical of plaintiff on that site, along with information that defendant had set up its own legal services and was allegedly soliciting clients, plaintiff has made out a claim for relief based on bad faith intent to divert customers, and defendant's motion to dismiss is denied. Levinson Axelrod v. Heyburn, Civ No 09-5627 (DNJ May 3, 2010)
Some courts have found that merely the attempt to confuse potential visitors and divert traffic to your website could constitute a bad faith intent to profit. [Utah 1048-49 ("A defendant could also intend to profit by diverting customers from the website of the trademark owner to the defendant's own website, where those consumers would purchase the defendant's products or services instead of the trademark owner's.")] Other course have rejected arguments that gripe sites could be construed as using the "mark in commerce" or were created in order to gain an advantage in negotiations.

the person's offer to transfer, sell, or otherwise assign the domain name to the mark owner or any third party for financial gain without having used, or having an intent to use, the domain name in the bona fide offering of any goods or services, or the person's prior conduct indicating a pattern of such conduct; [VW] [Anlin Slip 11 (offering to sell five domains for $100,000)]
Rearden Sec. II Recognizing that attempts to settle legal conflicts is not tantamount to attempts to sell and extort a mark owner
the person's provision of material and misleading false contact information when applying for the registration of the domain name, the person's intentional failure to maintain accurate contact information, or the person's prior conduct indicating a pattern of such conduct;

The use of a privacy service to cloak the domain name owners contact information in WHOIS does not constitute misleading information " The record indicates that Defendants provided accurate contact information, but that they utilized a privacy protection service so as to not make their contact information readily available to the general public. Use of the privacy protection service is not the same thing as providing false or misleading contact information.". [Career Agents Network Slip p 10]

the person's registration or acquisition of multiple domain names which the person knows are identical or confusingly similar to marks of others that are distinctive at the time of registration of such domain names, or dilutive of famous marks of others that are famous at the time of registration of such domain names, without regard to the goods or services of the parties; [Gallo] and
1. Harrods Ltd. v. Sixty Internet Domain Names, 302 F.3d 214, 239 (4th Cir. 2002) "Congress warned that the ACPA `does not suggest that the mere registration of multiple domain names is an indication of bad faith.' This is presumably because many companies legitimately register many, even hundreds, of domain names consisting of various permutations of their own trademarks in combination with other words. `Just as they can have several telephone numbers, companies can register multiple domain names in order to maximize the chances that customers will find their web site.'"
2. Rearden Sec. II finding factor favors defendant where all of multiple domain names registered incorporate some part of the defendant's company name
the extent to which the mark incorporated in the person's domain name registration is or is not distinctive and famous within the meaning of subsection (c)(1) of this section.

There is no particular manner in which a court has to consider these factors, nor is the court limited to or required to follow these factors – they are merely guidelines. 15 U.S.C. § 1125(d)(1)(B)(i). A court is left to weigh the different factors pursuant to the unique facts of individual cases. Different factors may have different strengths in different situations. [H.R.Rep. No. 106-412, at 10 (1999) (Conf.Rep.) ("These factors are designed to balance the property interests of trademark owners with the legitimate interests of Internet users and others who seek to make lawful uses of others' marks, including for purposes such as comparative advertising, comment, criticism, parody, news reporting, fair use, etc.")] Harrods, 302 F.3d at 234 (“[T]here is no simple formula for evaluating and weighing these factors . . . courts do not simply count up which party has more factors in its favor after the evidence is in.”)

One colorful case was People for the Ethical Treatment of Animals v. Doughney. It provides a good walk through of how a court conducts a “bad faith” analysis. Doughney registered the domain name PETA.org prior to organization People for the Ethical Treatment of Animals (PETA). Doughney’s site was entitled “People Eating Tasting Animals” and provided information on a wide range of hunting, meat eating, and leather and fur topics. His site included multiple links to third party commercial websites on related topics. Partly it was a parody site in response to a view point with which Doughney clearly disagreed and partly it provided information on a hobby that Doughney thought merited a website. It was clear from the moment that you arrived at Doughney’s website that you were not at the PETA organizations website.

Nevertheless, PETA was the owner of the registered trademark PETA. In its “bad faith” analysis, the Court first noted that that Doughney had no trademark interest in PETA at the time he registered the domain name. This is of course an interesting catch-22. One cannot gain trademark interests in a mark until one uses it – but here the Court demands a trademark interest prior to use.

The Court also noted that Doughney had never used PETA.org prior to the establishment of his website. But this factor of course discriminates against entities with solely online presences. Those entities that have physical existences prior to online existences would have superior rights those with solely online existences. In the physical world, Cannon Towels, Canon Camera, and Cannon Fish Market can all coexist (you are unlikely to confuse those entities). But all of those entities could have superior rights to me, according to this Court, if I set up cannon.org– using the mark for the very first time in relationship with my new online venture. What is untrue of the physical world becomes discrimination in favor of meat space over cyberspace in the online world.

Ultimately, the Court found that Doughney was a cybersquatter and ordered that the domain name be transferred to PETA.

Generally, however, a key factor for this analysis is whether a domain name holder engages in the practice of domain name warehousing and whether a domain name holder has attempted to speculate or profit from the domain name. A good example of this is Morrison & Foerster, LLP, v. Wick. Wick was a self pronounced anti-corporate-America individual who sought his revenge by acquiring a large number of domain names of different corporate entities. Wick decided that one of his targets would be law firms that represent corporate America. Among other names, he registered mofo.com, the nickname and trademark of Morrison and Foerster. Wick explained in testimony

[Mofo] Wick then proceeded to offer to sell the warehoused domain names to the corporations in question. He set up the website www.NameIsForSale.com and on some of the warehoused domain name sites he put up the message

Finally, note a trap within the bad faith elements. Reasonable people who find themselves in disputes frequently are able to come to reasonable settlement. Reasonable courts like to encourage this type of behavior. But ACPA could cause trouble for legitimate settlement of disputes. Say there is a situation where one individual legitimately holds the domain name and another legitimately wants the domain name. In order to resolve their dispute, the parties may wish to come to an amicable agreement. But it might be a mistake for the domain name holder to say, “This domain name is valuable to me but it is more valuable to you, so I will sell it to you for $5000.” This $5000 might appropriately go towards new branding including new stationary, new work with search engines, and new advertisements. If the owner of the domain name attempts to settle, the individual who want the domain name could hold it against the owner, arguing that the owner was attempting to speculate and profit from the domain name, which could amount to “bad faith.” This is exactly what happened to Doughney who sought to settle his case with PETA; there was no other way that the court could establish that his parody site was for profit. [Lucas] In other words, a reasonable domain name owners who attempt to settle disputes could have their good behavior backfire on them. [See also Northland]

Purpose

Elements of Cause of Action

Distinctive Or Famous Trademarks

Bad Faith Intent to Profit

Settling