By John L. Duoba, Staff
Writer, CCH Business Owner's Toolkit
The House of Representatives on October 26 voted to ban
cybersquatting, a speculative practice on the Internet involving
the bad-faith purchase of domain names that are identical or
confusingly similar to existing registered trademarks.
According to government records, more than 4 billion web
addresses have been registered, and the problem of
cybersquatting has grown tremendously as more and more companies
make the transition to e-commerce, only to find their protected
trademark is already taken. Often, the domain names are
purchased with the intent of reselling them at a premium to the
current trademark holder or the highest bidder.
"Cybersquatters register protected brand names as
Internet domains in order to extract payment from the rightful
owners of the trademarks," said Rep. James Rogan (R-Cal.),
a co-sponsor of the bill. "They are then forced to pay for
the right to engage in electronic commerce under their own brand
name. In essence, the commerce-rich Internet is used as a tool
for pirates, crippling legitimate businesses, and fattening the
wallets of cyber-frauds."
Still, others have used these domain names to generate
traffic from confused or mistaken web surfers. These deceptively
similar sites usually seek to do one of two things: accumulate
additional page views and increased ad revenue, or purposefully
damage the image of the brand name.
"(This) legislation will protect American businesses
from unnecessary legal costs and promote the growth of
electronic commerce by punishing those individuals who register
domain names in an attempt to profit from the goodwill
associated with an existing trademark," said Rep. Rick
Boucher (D-Va.), another co-sponsor.
The Trademark Cyber-piracy Prevention Act, passed by voice
vote, is similar to one passed by the Senate in August, which
amends the Trademark Act of 1946. It prohibits registration,
trafficking in, or use of a domain name that is identical to,
confusingly similar to, or dilutive of a mark that is
distinctive at the time of registration.
The bill would clarify the rights of trademark owners with
respect to bad faith abusive domain name registration practices
and provide deterrence to prevent this practice. Under the bill,
trademark owners could seek cancellation of an infringing domain
name if they can prove they attempted but were not able to
locate the owner of the name. It also sets forth the standards
to be used in court for determining whether a registrant acted
in good faith when purchasing a domain name.
In addition, the House-approved version revises the fee
structure charged by the federal government for registering and
protecting trademarks and patents, and it instructs the Commerce
Department to establish a new domain category with the suffix
".us" to be used only by elected local, state or
federal government officials and those citizens running for
these offices. It is hoped that the new domain will cut down on
confusion and assure citizens of the integrity of the
information regarding all candidates, office holders and
elections.
A House-Senate conference committee would have to iron out
the slight differences between the two bills before it could be
sent to the president for his approval. Previously, the Clinton
administration had opposed the legislation, instead favoring use
of the court system to build a body of case law against the
practice.
For more information on trademarks, patents and copyrights
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