Domain Name Registration Should Be Part of Business Strategy
A recent court case out of New York underscores the importance of including domain name registration as part of important corporate strategies, such as in mergers and acquisitions. In late 2008, on the same day that Bank of America Corp. alerted the media that it had acquired Merrill Lynch & Co, Inc. a cybersquatter registered the domain names "bofaml.com" and "mlbofa.com."
In order to gain control of the domain names, Bank of America and Merrill Lynch filed a complaint under the Uniform Domain Name Dispute Resolution Policy (UDRP), which is an arbitration proceeding used to resolve disputes over domain name ownership. Last spring, the arbitration panel hearing the matter ruled that the domain names at issue were confusingly similar to Bank of America's "B of A" trademark, the cybersquatter had no right or legitimate interest in the domain names, and the cybersquatter registered and was using the domain names in bad faith. As a result, the arbitration panel ordered the transfer of the domain names to Bank of America.
But the cybersquatter did not consider the matter settled and did not transfer the domain names as ordered. Instead, the cybersquatter filed suit against Bank of America and Merrill Lynch in New York federal district court, seeking a declaratory judgment that his use of the domain names did not violate Bank of America's and Merrill Lynch's trademark rights. The judge ultimately ruled in favor of Bank of America and ordered the offending domain names transferred to Bank of America. The court cited the cybersquatters' own admissions in his complaint that he was a "domainer," who acquires high value domain names and uses them to generate pay-per-click revenue or to build websites. There was also evidence in the record that the cybersquatter offered to sell the domain names to Bank of America suggesting that they were each worth over $1 million. These facts didn't bode well for the cybersquatter's case.
It remains to be seen whether filing an action in federal court to prolong control of domain names will become a common strategy for cybersquatters or whether this was merely one person's unique approach. In any event, Bank of America and Merrill Lynch could have saved thousands of dollars simply by registering the domains in question before announcing the acquisition. Businesses would be wise to proactively register domain names as part of their corporate strategies.
-- Molly Eichten is a member of the Larkin Hoffman Daly & Lindgren Ltd. Intellectual Property, Technology and Internet Practice.