As with any case of intangible assets, trademark law can be a complicated matter. When bringing trademarks into the world of web developing, things become a lot more hazy: Precedents on domain name issues remain scant and are still being determined on a case-by-case basis. Common guidelines exist, however, to help trademark owners and web developers navigate the tangled world of domain-name legal issues.
Definition of Trademark
The United States Patent Office defines a trademark as words or symbols used to identify the source of a good or service. In laymen's terms, it's a tool consumers use to differentiate quality, value and craftsmanship between providers of similar goods and services. With corporate identities so heavily invested in trademarks, U.S. law grants wide protection to their owners to help defend their brand and keep their identity unique.
Registrant's Responsibility
As part of your domain name registration, you're required to electronically certify that you aren't registering the website name and won't infringe upon trademark rights of another party. It also provides limited protection for registrants with a legitimate use of the domain name: If you're Old McDonald and want to create a website to promote your farm, you can register OldMcDonaldsFarm.com without running afoul of the burger chain with a similar name.
Cybersquatting
Most of the original guidelines developed for trademark by Network Solutions, Inc. were designed to prevent third parties from registering trademarked domain names simply to resell them to the trademark owner or to house irrelevant material on a high-traffic corner of the Internet.
In 1999, Congress passed the Anticybersquatting Consumer Protection Act, which established a streamlined process to strip domain name holders of websites set up to exploit another's trademark. Trademark owners simply must show ownership of the phrase and that the registrant is using it in bad faith.
Bad Faith
Registrants have no claim to a domain name if it's found it was registered in bad faith, which essentially determines it was not registered for a legitimate use of that domain. Examples of bad-faith registrations include claiming celebrity names simply to resell them, use of the trademark, if the domain is used to sell goods or services similar to those of the trademark holder, or if the registrant is using the domain in an attempt to fool consumers. Developers found to be using a domain in bad faith may be forced to surrender it to the trademark owner.
Trademarks vs. Fair Use
Registration of a trademark doesn't prevent everyone but its owner from using the term online. Web developers may sometimes be allowed to use a trademark in their domain name if it falls under the banner of fair use. Fair-use protection is granted to websites that promote bona fide discussion or an agenda that's tied specifically to an identified trademark. For example, while registering GeorgeWashington.com could be considered cybersquatting, those opposed to his presidential policies could have registered StopGeorgeWashington.com without fear of trademark or cybersquatting issues.