Do Trademarks Always Trump Domain Names? Not always.

Online start-ups are faced with the daunting task of selecting a domain name that will withstand legal challenges.
There’s a general belief among online start-ups that a trademark owner will always trump a domain name registrant with the same or confusingly similar domain name. That’s not always the result… as two recent 2010 UDRP decisions point out.
The UDRP
What is the UDRP, and why is it important?
The UDRP acronym stands for the Uniform Domain Name Dispute Resolution Policy. The UDRP is a set of procedures and rules that are supposed to help determine who should prevail in a dispute over domain name ownership.
The UDRP is important because it provides a faster and cheaper way to resolve a domain name dispute than a full-blown lawsuit in a court of law. Instead of litigation, it’s an administrative proceeding where the contestants present written arguments to a panelist-arbitrator who issues a binding decision. In-person hearings (including hearings by teleconference, videoconference, and web conference) are permitted only in exceptional cases, and are therefore rare.
The UDRP has not been without its critics. Most of the criticism centers on the fact that the UDRP was established to benefit trademark owners in taking non-trademark owners to task in domain name disputes. And UDRP critics often point out the fact the UDRP decisions seem to come out overwhelmingly in favor of trademark owners.
There are three requirements for a trademark owner-complainant to prevail over a domain name-respondent in a UDRP proceeding:
1 – the domain name registered by the respondent is identical or confusingly similar to a trademark or service mark in which the complainant has rights;
2 – the respondent has no rights or legitimate interests in respect of the domain name; and
3 – the domain name has been registered and is being used in bad faith by the respondent.
The Arizona State Trailer Sales Case
This case involved requirement no. 1 above.
The complainant, Arizona State Trailer Sales, argued that the respondent’s littledealerrv.com domain name was confusingly similar to the complainant’s registered mark, LITTLE DEALER LITTLE PRICES and the complainant’s common law marks, LITTLE DEALER LITTLE PRICES RV and LITTLE DEALER .
The respondent argued that it should prevail because its registration of its littledealerrv.com domain name occurred prior to the complainant’s registration of its trademark.
The respondent won. The UDRP panelist noted that a complainant has to show that the respondent’s domain name is identical or confusingly similar to complainant’s mark. “This provision necessarily implies that Complainant’s rights must predate the registration of Registrant’s domain name”, the panelist concluded.
The take-away – the respondent won because it registered its domain name before the complainant registered its trademark.
The University of Texas Case
The University of Texas at Austin (UT) case involved requirement no. 3 above.
UT showed that it owned the texassports.com domain name, as well as the following registered trademarks: TEXAS, UNIVERSITY OF TEXAS, TEXAS LONGHORNS, and LONGHORNS. UT also showed that its TEXAS mark is registered for “Entertainment services, namely, providing college athletic and sporting events.”
UT argued among other things that the use of respondent’s texassports.org domain was in bad faith because it was used as a “parking” website for information related to University of Texas sports and sporting events.
The respondent won. The panel found that UT did not prove “bad faith”. The panel reasoned that because the term “Texas Sports” is geographically descriptive, the respondent was free to register its domain name using the term on a “first-come, first-served basis”.
The panel also found that UT did not have a registration for the term “Texas Sports”, and therefore there was no likelihood of consumer confusion.
Conclusion
Selecting a domain name that will withstand legal challenges is a strategic undertaking for any online start-up.
The important lesson is that although the UDRP may help in deciding in favor of a respondent in a domain name dispute with a trademark owner, the recommended approach is to avoid the dispute altogether by undertaking a thorough search of pre-existing trademarks before selecting a domain name.
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