Avoid Trademark Infringement When You Choose a Domain Name

If you choose a domain name that conflicts with any one of the millions of commercial names that already exist, you risk losing it. And if you've put money and sweat into marketing your website and then are forced to give the domain name up, your Web-based business is likely to suffer a damaging, if not fatal, blow.

The rules for understanding whether a legal conflict exists comes from trademark law. Here are the basics you need to understand:

  • Names that identify the source of products or services in the marketplace are trademarks.
  • Trademarks that are clever, memorable or suggestive are protected under federal and state law.
  • Trademarks that are descriptive and have achieved distinction through sales and advertising can be protected under federal and state law.
  • One trademark legally conflicts with another when the use of both trademarks is likely to confuse customers about the products or services, or their source.
  • In case of a legal conflict with a later user, the first commercial user of a trademark owns it.
  • If a legal conflict is found to exist, the later user will probably have to stop using the mark and may even have to pay the trademark owner damages.

Customer Confusion
Applying these principles to your domain name selection, you are at risk of losing your chosen domain name if the owner of an existing trademark convinces a judge or arbitrator that your use of the domain name makes it likely that customers would be confused as to the source or quality of the products.

Sometimes similar domain names can cause customers to buy different goods or services than what they intended to buy. For instance, suppose, on the recommendation of a friend, you decide to purchase Lee's famous Flamebrain barbecue sauce, which is sold only on the Web. You intend to type "flamebrain.com" into your browser but accidentally enter "flamerbrain.com" instead. You get a website run by Henry, who has both copied Lee's idea to offer a barbecue sauce for sale on the Web and, with a very minor variation, the name of Lee's sauce. You order two bottles, completely unaware that you ordered the wrong product from the wrong website. You get a barbecue sauce that is much inferior to Lee's famous sauce.

Protected Trademarks
Customer confusion matters only if a domain name that's similar to the one you want to use is a protected trademark. To be protected, a trademark must be distinctive. A name may be distinctive because it is made up (chumbo.com for an online software store), arbitrary in the context of its use (apple.com for computer products), fanciful (ragingbull.com for investment advice) or suggestive of the underlying product or service (salon.com for an online magazine). If a domain name uses surnames, geographic names or common words that describe some aspect of the goods or services sold on the website (healthanswers.com for online health information) it is ineligible for trademark protection unless the owner can demonstrate distinction through substantial sales and advertising.
Many domain names -- for instance, coffee.com, drugs.com and business.com -- are potentially powerful domain names, but they're generic. That is, they describe whole categories of products or services. Generic terms can never be trademarks.
To learn more, see Trademark Protection.

Avoiding Trouble
The way to choose a domain name that satisfies your own marketing needs and doesn't get in the way of anybody else's trademark rights is to search as many existing trademarks as possible, spot possible conflicts and then pick a name that's unlikely to generate a nasty lawyer's letter.

The first place to go for possible conflicts is the trademark database. Searching this database gives you all registered trademarks and all trademarks for which registration is pending. You should search not only for your proposed mark but also for other marks that are logically close, such as synonyms and variant spellings, such as barbeque and barbecue.

If your search turns up any names that are the same or similar to your proposed domain name, ask these questions:

  • Will your website offer goods or services that compete with the goods or services being sold under the similar domain name?
  • Will your website offer goods or services that typically are distributed in the same channels as the goods or services being sold under the similar domain name? This would be the case, for instance, if you plan to offer sports equipment on your website, and the owner of the possibly conflicting name sells sports clothing.
  • Could your website divert business away from the site with the similar name? Is your domain name so similar to the other domain name that users might end up on your website by mistake?
  • Is the other name well known?

Domain Name Bullies
Sometimes a powerful company tries to force a smaller one to give up a domain name that was legally acquired in good faith by the smaller company. Because trademark conflicts are ultimately resolved in court, a business that can easily afford to pay lawyers is in a powerful position to sue the smaller company for trademark infringement (assuming there is any basis for doing so, which there usually is). When the smaller company realizes that it will cost tens of thousands of dollars to defend the suit, the big guy proposes a settlement under which the small company parts with the name for a relatively meager sum. In other words, the powerful company ends up getting what it wants simply because the court system is manifestly unfair to those who can't afford attorneys. If you have problem with this issue you can visit Domain Name Rights Coalition and as well as use output from Wotra domain monitoring service.

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