A small partnership whose sole line of business appears to have been registration of hundreds of Internet domain names registered an Internet address name that was virtually identical to the name of a famous winery. When the winery got nowhere with demands that the domain name be released or transferred to it, it sued under the federal Anticybersquatting Consumer Protection Act (ACPA). Cybersquatting is the registration of a domain name of a well-known trademark by someone who does not hold the trademark but hopes to profit from selling the name back to the trademark owner.
Unfazed by the lawsuit, the partnership went on the offensive. On a website that used the name in dispute, the defendant published under the heading “Whiney Winery” a discussion of the lawsuit and an attack on the winery and corporations generally. This online response to being sued was the first and only time that the registrant of the disputed domain name actually used it.
A federal court awarded a judgment to the winery under the ACPA. There was no question that the winery had a valid trademark that was famous and distinctive, and that the domain name registered by the defendant was identical or confusingly similar to the mark. The defense rested instead on the contention that the partnership did not have the bad-faith intent to profit from another’s mark, as is required for liability under the ACPA.
The court weighed various factors that go into deciding if “bad-faith intent to profit” is shown, and the partnership did not fare well. When it registered the domain name, it had no intellectual property rights in the name, and it never had used the name in a legitimate offering of goods or services. Although it had not yet offered to sell the domain name to the winery, it had made such offers to sell names to other trademark owners, generally accepting no less than $10,000 per name. The partners admitted that they hoped the winery eventually would contact them so that they could “assist” the winery in some way. The icing on the cake in establishing bad faith was the hosting of a website and using the winery’s trademarked name as a forum for attacking the winery’s goodwill and tarnishing its trademark.