Lipton, Weinberger & Husick (“LWH”) recently scored another success against domainer, Marchex, Inc. Here’s some background.
Domainers – those who speculate in domain names – set up web sites for purposes of selling a domain or obtaining pay-per-click revenues. When the domain is identical or similar to another company’s trademark, trademark owners will attempt to enforce their rights. Some of the larger domainers are willing to accept push back from trademark owners as the cost of doing business. Once such domainer, Marchex, Inc. (“Marchex”), which sells domains from its considerably large portfolio through its Archeo Domains Marketplace, concedes in its corporate filings that defending trademark disputes is part of its business.
Some years ago, LWH won a case against Marchex on behalf of its client, Superior Play Systems (“SPS”). SPS’ goal was to obtain the superiorplaysystems.com domain name from Marchex. The key to prevailing in that case was that SPS was using SUPERIOR PLAY SYSTEMS as a common law trademark years before Marchex acquired the superiorplaysystems.com domain. Had Marchex performed a simple Internet search before registering its domain, it would have learned that it was identical to another companies’ trademark. That was a good enough reason for the arbitrators to order Marchex to transfer the domain name to its rightful owner, Superior Play Systems (NAB Claim No. FA1103001379684).
This month, LWH had another success against Marchex. In this case, like the Superior Play Systems situation, Marchex apparently purchased the “bequick.com” domain name during the same period that our client, BeQuick Software, Inc. (“BeQuick”), was already using BEQUICK as a common law trademark. Rather than litigate, BeQuick decided to purchase bequick.com from Marchex. A series of purchase offers were made, culminating in an offer of $12,500, which BeQuick justified to Marchex as similar if not in excess of other sales of similar domain names. Marchex rebuffed the offer, ignored the justification, and refused to counter offer. Holding out for high five figures, Marchex invited BeQuick to make yet another offer. Rather than continue to bid against itself, BeQuick authorized LWH to reclaim its domain name by filing a Uniform Domain Name Dispute Resolution Policy (“UDRP”) complaint against Marchex with the National Arbitration Forum. Once the complaint was filed, Marchex quickly settled and BeQuick obtained its domain name.
Despite these successes, domainers often prevail because owning a domain name — even if it is similar to another company’s trademark — is not necessarily infringement or constitute “bad faith” under UDRP precedents. Domainers have created very successful businesses selling domains and parking them for pay-per-click revenue. Under the right circumstances, however, when a domainer acquires a domain without due diligence, exercises bad faith in the sales process, or creates confusion in the market place, a trademark owner may have a good shot at reclaiming its domain.
Adam G. Garson, Esq.