By Steven M. Levy, FairWinds Partners Advisor
As in-house IP counsel for The Home Depot, I was often asked the question “should we go after this trademark copycat?” Sometimes the infringement in question was as simple as the use of the name “The Carpet Depot” by a local mom-and-pop installer. Other times, it was more urgent such as when a Florida nightclub used a copy of our orange square logo with the name “The Adult Depot.” I also encountered legions of pay-per-click Web sites, which are as annoying as a cockroach infestation but often viewed as “mostly harmless.” My challenge was deciding where to spend our precious enforcement budget and I wanted to demonstrate to management that I was being aggressive on infringements, yet careful with company funds.
When I see pay-per-click and other infringements by cybersquatters, my mind snaps back to the now-famous “let ‘em squat” speech given by a well-respected trade practitioner at an INTA presentation. The point was that there’s no sense in blowing through your enforcement budget by going after every squatter, especially if their use isn’t actually harming your brand or your online presence. As in-house counsel we are forced to take a very pragmatic approach – in some obvious cases you do what you have to, but in other cases it makes sense to hold off on taking action. If I had filed a UDRP against every single domain that was a clear infringement of the famous Home Depot mark, let alone of one of our many other important brands, I would have far exceeded my annual budget and been left justifying the need for such aggressive enforcement to the General Counsel and CEO.
As a pragmatist, one must use common sense, experience and some of the advanced tools that are available to prioritize the existing infringements and execute a sensible enforcement program. For example, squatted domains that point to pornography, gambling or foster illegal activity could tarnish a brand and should be addressed in most cases. Even if just a few visitors are exposed to this type of content, it can seriously affect a company’s reputation and generate media attention that further exposes the site. These types of judgments are well within the expertise of an experienced IP lawyer or marketing professional.
However, when does a squatted domain pointing to a more mundane pay-per-click Web site become worthy of enforcement action? Even if some of the links on the site advertise a brand owner’s competitors or the brand owner’s own site (thus costing it click-through fees), is it worth the cost and time to pursue? While many often automatically ignore these domains, with a closer look at the estimated number of visitors to the site, you can make a more informed enforcement decision by coupling an understanding of who the owner of the domain is with what your business could do with the name. If traffic is low, there may be no need to waste money on a UDRP action and you can “let ‘em squat”. If traffic is high, action may be fully justified due to 1) the potential harm to the brand and 2) the ability to redirect those visitors to the brand owner’s legitimate Web site and perhaps increase sales. FairWinds Partners has created a proprietary system whereby the estimated traffic for many domains can be checked at once and thus offer a much-needed component to prioritize and to guide enforcement in a strategic and efficient way.
Many cautious litigators wonder about laches—worrying that they must pursue infringements that they are aware of within a reasonable amount of time or risk losing the ability to enforce their rights due to unreasonable delay. While this is certainly a legitimate concern, the short answer is that the laches defense will probably never be raised. In my experience, most cybersquatting enforcements are decided on default - most cybersquatters don’t attempt to defend their actions when a complaint is filed against them. So, it is unlikely that a squatter would go so far as to defend an action at all, let alone assert laches. Further, the likelihood is quite low that a squatter will be able to support a laches defense by showing that they invested in improving the Web site or otherwise made expensive changes. This will not be sufficient to demonstrate that there is prejudice against the cybersquatter’s business and that the prejudice resulted from the delay in enforcement.
The real harm to a brand owner might come if traffic to the infringing Web site were to later increase to the point where it became a more viable enforcement target. However, it may be possible to successfully defeat the assertion of laches if the brand owner’s decision to pursue the infringement at this later stage came about due to a dramatic increase in traffic to the infringing site. Where such a change in the nature of an infringement occurs, the new circumstances may lead to justification of enforcement despite earlier delay.
The smart approach is the time-tested use of a good watch service combined with the prioritization, analysis, and most importantly the overall guidance that FairWinds Partners can provide based upon their extensive experience dealing with the worst cybersquatters. With this strategy, a brand owner could potentially go after its most high-traffic infringers quickly and avoid wasting time on low-traffic annoyances. This would free up a block of time and money for other more productive IP pursuits such as creating new brands, licensing and client counseling. Such efficiencies are rare and make a significant impact on clients and General Counsel alike.
Sign up to receive emails from FairWinds.
Sign up to receive RSS News feeds.
1000 Potomac Street NW, Suite 350 | Washington, DC 20007