A recent case¹ from a federal court in Kentucky shows why the Anticybersquatting Consumer Protection Act (15 U.S.C. 1125(d)—the “ACPA”) can be—when compared to the Uniform Domain Name Dispute Resolution Policy (”UDRP”)—a relatively inefficient way of resolving a domain name dispute.

Defendant was an infringer

Here is a quick rundown of the facts. Defendant owned a business directly competitive to plaintiff ServPro. Plaintiff had used its mark and trade dress since the 1960’s. Defendant set up a website that used plaintiff’s color scheme, bought Google AdWords that triggered ads showing plaintiff’s mark, and registered a domain name identical to plaintiff’s mark—servpro.click. These facts supported the court’s entry of summary judgment in plaintiff’s favor on the question of trademark infringement. But the court got hung up on the ACPA claim because of some hard-to-believe facts the defendant put forward.

What the ACPA requires

The ACPA requires a plaintiff to prove bad faith intent to profit from the disputed domain name. And it gives courts a list of nine things that a court can consider, if it wants to, in determining this bad faith. In other words, this list is not the be-all and end-all guide for determining ACPA bad faith. Here are the nine things:

1. the trademark or other intellectual property rights of the person, if any, in the domain name;
2. the extent to which the domain name consists of the legal name of the person or a name that is otherwise commonly used to identify that person;
3. the person’s prior use, if any, of the domain name in connection with the bona fide offering of any goods or services;
4. the person’s bona fide noncommercial or fair use of the mark in a site accessible under the domain name;
5. the person’s intent to divert consumers from the mark owner’s online location to a site accessible under the domain name that could harm the goodwill represented by the mark, either for commercial gain or with the intent to tarnish or disparage the mark, by creating a likelihood of confusion as to the source, sponsorship, affiliation, or endorsement of the site;
6. the person’s offer to transfer, sell, or otherwise assign the domain name to the mark owner or any third party for financial gain without having used, or having an intent to use, the domain name in the bona fide offering of any goods or services, or the person’s prior conduct indicating a pattern of such conduct;
7. the person’s provision of material and misleading false contact information when applying for the registration of the domain name, the person’s intentional failure to maintain accurate contact information, or the person’s prior conduct indicating a pattern of such conduct;
8. the person’s registration or acquisition of multiple domain names which the person knows are identical or confusingly similar to marks of others that are distinctive at the time of registration of such domain names, or dilutive of famous marks of others that are famous at the time of registration of such domain names, without regard to the goods or services of the parties; and
9. the extent to which the mark incorporated in the person’s domain name registration is or is not distinctive and famous within the meaning of [the Lanham Act].

The court’s decision on cybersquatting

The court found that factors I through IV and IX weighed in plaintiff’s favor. But the court denied summary judgment because it found there to be a genuine dispute as to factor V, namely, that defendant had an intent to divert plaintiff’s customers.

Defendant asserted that he did not purchase the servpro.click domain name with the intent to divert customers away from plaintiff for defendant’s own commercial gain. Instead, he alleged that he registered the disputed domain name to collect information and perform analytical research for running Google AdWords. He also alleges that the website the domain name pointed to did not advertise that it was ServPro, and the contact information on the website pointed to his personal cellphone. And he alleged that when answering calls made to that number, he identified himself as affiliated with his company and never identified himself as affiliated with plaintiff.

It must have been difficult for the court to deny summary judgment in a situation where the facts alleged are so hard to believe. A court’s role at the summary judgment stage, however, is not to weigh the evidence, but merely to determine whether there is a factual issue for trial. The time for really ascertaining the truth of defendant’s assertions will come later.

Was the ACPA too cumbersome for this case?

In any event, the fact that these flimsy arguments remained alive this far into expensive litigation underscores how federal litigation is often the more cumbersome alternative to resolving domain name disputes. The marshaling of evidence, briefing and argument in federal court can easily rack up six-figures in attorney’s fees and costs. And even after that effort, the summary judgment standard provides little assurance that a party arguing against thin facts will get relief at this stage. Had this domain name dispute been heard under the UDRP instead, one would guess plaintiff’s arguments might have had more success.

¹ ServPro Intellectual Property, Inc. v. Blanton, 2020 WL 1666121 (W.D. Ky. April 3, 2020)