No, you cannot “acquire” a trademark and seize a Domain

One of several common misconceptions regarding domains revolves around laws and regulations. Even experienced businesspeople can sometimes mistakenly believe that a domain name is always a right and never a privilege. This inevitably leads to conflicts, where parties without a reasonable claim act as if they have one.

In the infancy of the internet, trademark owners feared that their online identity would be held hostage and that they would be powerless to do anything about it. A “cybersquatter” would register their name and engage in extortion or worse. It was occasionally a legitimate fear.

To keep this hostage situation in check, two new legislations and frameworks were created. The Anti-Cybersquatting Consumer Protection Act (ACPA), which is part of U.S. trademark law, and the extrajudicial dispute resolution procedure known as the Uniform Domain Name Dispute Resolution Policy (UDRP).

The main purpose of the UDRP was to serve as a fast-track process for addressing blatant cases of cybersquatting. When IP experts developed it, they were very cautious with the wording and instructions to minimize the potential abuse of the process for purposes other than intended. One result was the requirements that must be met for a domain registration to be classified as being in “bad faith.”

“Bad faith” could be demonstrated not only in how the domain name is used but also at the time of its initial registration. This wording, known as the “conjunctive” bad faith criterion, can be likened to a sort of priority rule. A complaint based on a trademark right that arose after the registration of the domain name simply cannot form the basis of a claim. Complaints that are contrary to this clear rule, yet still made as an attempt to acquire a domain one is not entitled to, can instead result in a finding of “Reverse Domain Hijacking,” created to discourage similar attempts and protect legitimate domain holders from careless or malicious attempts to seize their domain.

It really only takes a moment’s thought to understand that requiring “bad faith” at the time of registration is a fairly reasonable demand. How could a domain registration be acquired with the intention of capitalizing on a non-existent trademark? And what would happen if domain registrations, not just critical branding identities but also critical business infrastructure, were at risk of being questioned and seized on dubious grounds and with little notice?

Despite this, the myth of the “domain squatter” or “internet pirate” as the only plausible explanation for a domain name being taken is surprisingly persistent. Domain investors and resellers in the secondary market are therefore subjected to unfounded threats and scare tactics daily, solely because they happen to possess a desirable digital asset.

The most accurate label to describe the rather banal business model of buying and selling sought-after items is still “squatter.” This often misplaced epithet is today one of the main reasons why knowledge about actual circumstances regarding regulations and domain names is painfully limited.

An effect of ill-informed attempts to assert claims without legal support can sometimes be the opposite of what is intended. The relevant domain name may remain forever out of reach, or at best, it will only receive a new price tag that can be bitter medicine.