What is the Anti-Cybersquatting Consumer Protection Act of 1999 and does it prohibit gripe sites?

Monday, May 9, 2005

The act provides a cause of action to a trademark holder when someone registers a domain name of a well-known trademark — or something very similar to it — and then attempts to profit from it by ransoming the domain name back to the trademark holder or by using the domain name to divert business from the trademark holder to the domain-name holder. Cybersquatters buy up the domain names of well-known companies in the hopes of profiting by selling the online “real estate” back to the trademark holder. Whether a cybergriper violates the anti-cybersquatting law depends on whether the griper has a bad-faith intent to profit from the purchase of the domain name.

However, there is no per se commercial-use requirement in the anti-cybersquatting law. As the 9th Circuit recently wrote in its 2005 decision Bosley Medical Institute, Inc. v. Kremer: “Allowing a cybersquatter to register the domain name with a bad faith intent to profit but get around the law by making noncommercial use of the mark would run counter to the purpose of the act.”

The statute contains a list of nine factors that courts must consider to determine whether someone had a bad faith intent to profit. One of the relevant factors is whether the domain name holder, the alleged cybersquatter, had a “bonafide non-commercial or fair use of the mark in a site accessible under the domain name.”

Many commentators have criticized the use of the anti-cybersquatting law to cover true gripe sites developed not to profit but to release critical consumer commentary. For example, law professor Hannibal Travis writes in a 2005 article in the Virginia Journal of Law and Technology that “trademark rights should be limited to policing commercial competition, rather than non-commercial Internet speech.”