UnIP (UnIntellectual Property): Trademark for Domain Registered but Not Used

This United States District Court for the District of Arizona case is certainly one that has garnered a lot of attention in the domainer community, as well as amongst domain name and internet law attorneys like myself. The dispute centers around the domain name airfx.com. Plaintiff, the registrant of airfx.com, filed this lawsuit with one claim for reverse domain hijacking under 15 U.S.C. 1114(2)(D)(v) of the ACPA after Defendant had prevailed in its UDRP. Defendant counterclaimed for cybersquatting and trademark infringement under the Lanham Act.

In finding for Plaintiff on summary judgment, the Court narrowly defined the scope of the term “registration” of the ACPA to mean the first registration of the domain name, even if by an unrelated third party. It held that because the previous owner of the domain registered airfx.com “long before [defendant] registered its service mark,” plaintiffs’ registration and ownership of airfx.com “does not violate § 1125(d)(1).” It then turned its attention to whether Plaintiff had engaged in any actionable use of the domain name (keep in mind that the ACPA provides for liability for the registration, use, or trafficking in the domain name). In doing so, the Court analyzed use in the context of the trademark infringement claim under the Lanham Act. It first confirmed that the mere act of registering a domain name, without more, does not constitute the requisite commercial use so as to establish trademark infringement liability. Second, it held that Plaintiff had not made an actionable use in commerce of the domain either so as to have liability under the ACPA. This Court found as such because Plaintiff never sold an AirFX product, had no advertising or marketing activities, and had no manufacturing activities. While it had the GoDaddy.com provided parked page on its website at airfx.com, the Court found this to be insufficient.

So, does this decision take the wind out of the sails of those alleging cybersquatting? If the trademark or service mark must predate the registration of the domain, doesn’t that limit newer companies’ and brands’ ability to rely upon the ACPA, especially if there is no use or trafficking, recognizing that so many domains are registered that it is difficult to find a brand whose corresponding domain is available? Did the Court get this right, and will this opinion stand if appealed? The decision as it relates to the Lanham Act requiring an actionable use in commerce to qualify for a trademark, and that a domain registration in and of itself is not enough, is not surprising or novel. However, such a narrow view of the ACPA’s registration prong, and the issuance of an award for reverse domain hijacking, appears to set a new precedent. As such, trademark owners (whether overzealous or not) should be mindful of this in the future.

AIRFX.com v. AirFX LLC, CV 11-01064-PHX-FJM, 2012 WL 3638721 (D. Ariz. Aug. 24, 2012).


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