Domain Names Receive "Trademark" Treatment

In a recent BVR conference on valuing IP, Jimmy Nguyen, Esq. lead a discussion that touched on domain names and their evolving status as IP.  Now comes a Virginia District Court opinion (Weitzman v Lead Networks Domains Pvt., Ltd., No. 1:10-cv-01141 (CMH/IDD) (E.D. Va. Sept. 24, 2010) that, essentially, says that a domain name IS a trademark.

Plaintiff Warren Weltzman is a cybersquatter … though he doesn’t refer to himself as such. He owns domain names such as oncologics.com, pirreli.com, profesia.com, reabok.com, etc. When Lead Networks (an Indian company) registered these domains (cybersquatting, too), Weltzman sued under the Anticybersquatting Consumer Protection Act, for “tortious interference with contractual relationship.”

Lead Networks defaulted, as they clearly were registering domain names owned by Weltzman.  The problem then arose, in order to get relief from the ACPA, the plaintiff would have to own a trademark.  According to the ACPA “[C]ybersquatting occurs when a person other than the trademark holder registers the domain name of a well known trademark and then attempts to profit from this by either ransoming the domain name back to the trademark holder or by using the domain name to divert business from the trademark holder to the domain name holder.” The District Court upheld a lower Magistrate’s decision that Weltzman was entitled to relief and ordered the registrations of the offending domains switched over to the plaintiff. This means the domain names were treated as trademarks … and that is more than just interesting. It appears to re-interpret the law.

Valuation analysts take note here. In assessing an organization’s IP holdings, domain names, even those that might be used only in a cybersquatting setting, might have the status of trademarks, in spite of the fact that The Trademark Act of 1946 (“Lanham Act”) prohibits persons from using trademarks, trade names, and trade dress that are likely to cause confusion about the source of a product or service. .  Here is the District Court order.