Legal Brief - December

Domain Owner Granted Trademark Rights to a Domain Similar to a Well-known Mark

by Ben Kradin :: Legal Staff, Sedo.com

A US District Court for the Eastern District of Virginia recently affirmed a default judgment that stated a domain name owner had, in fact, accumulated common-law trademark rights to the domain name Reabok.com, despite its clear association to the famous brand name, Reebok® (See: Warren Weitzman v. Lead Networks Domains Pvt. Ltd., 2010).

Weitzman, the Plaintiff, owned and maintained over 12,000 domains. Lead Networks, the Defendant, blocked access to several of the Weitzman’s domain names due to concerns over trademark infringement. Weitzman brought suit against Lead Networks in Virginia, claiming that it violated his rights and redirected his money by illegally preventing his access to his domain names.

Lead Networks failed to show up to contest Weitzman’s claim at the time of trial, meaning the Court did not have to consider the case from the Defendant’s point of view. Weitzman automatically won the case with a “default judgment” as a result of Lead Networks’s lack of response. Weitzman consequently succeeded in achieving common law property rights to a potentially infringing domain name due to Defendant’s not appearing at trial.

Critics argue, however, that the most glaring fact surrounding this holding is that the decision was made through a default judgment. This may be a loophole in the Anti-Cyber-squatting Consumer Protection Act (ACPA) that works against the purpose of the law.

It has been argued that default judgments usually fall short of achieving significant legal weight by the courts as they implicitly fail to accurately represent a tried case (i.e. a contested case by both sides on the merits of Weitzman’s particular alleged misuse of his domain name). Moreover, critics claim that Weitzman’s use of his domain name was clearly free-riding on the goodwill of famous Reebok marks because he drew revenue from a web page displaying advertisements for Reebok’s goods.

Whether or not this judgment will erode the effectiveness of the ACPA, a frequent and sometimes harsh, legal weapon used by brand owners, remains unclear. This holding certainly brings to light a potential loophole in the ACPA, but only future judicial interpretation will determine the fairness of a result of a default judgment stemming from an ACPA claim.