Published by LawTechie - November 2, 2011 - LawTechie

A recent Arizona case highlights the extent to which registered trademark owner can sometimes overreach and bully a non-competitor out of a valid, good-faith domain name registration. Airfx.com v. AirFX LLC, 11-01064 (D. Ariz.; Oct. 20, 2011).

In AirFX, the plaintiff purchased a domain name registration for AIRFX.COM to use in connection with its wind tunnels business. Little did plaintiff know that defendant AirFX, LLC, an Indiana based automobile and motorcycle parts maker owned the registered trademark AIRFX for its products. Defendant initially brought a UDRP action pursuant to the Anti-Cybersquatting Protection Act (ACPA) and successfully wrested the AIRFX.COM domain away from plaintiff. Plaintiff then brought an action in the District Court of Arizona (where register Godaddy makes its home) to take back its domain name registration under the “reverse-hijacking” provisions of the ACPA.

What is interesting about this case is that, under a pure trademark infringement analysis, plaintiff (the original domain name registration owner) would have probably been found okay to use the AIRFX trademark on its products (e.g., the types of goods are different from the existing trademark goods, the channels of trade and marketing are likely different, confusion about the source of the goods would be unlikely = no trademark infringement). Yet the UDRP panel decided that defendant ought to own the domain name registration because it had legitimate rights based on its registered trademark (this is correct) and that plaintiff registered the domain in bad faith because the domain initially took visitors to a page which displayed “various third-party links to unrelated businesses” (e.g., a placeholder page).

In order for a claimant to “wrest” a domain name registration away from the registrant via the ACPA, the claimant’s legitimate interest in the domain needs to be shown as well as the fact that the domain was registered in bad faith. While claimant/defendant’s legitimate interest via its registered trademark is indisputable, it is also fairly evident that registrant/plaintiff used a placeholder page while building its own websites — something that all new site owners do — and it is odd that the UDRP panel would decide such use to be in “bad-fath” and therefore meant to redirect customers from claimant/defendant’s business.

The Arizona court seems to be siding with plaintiff on this one and has allowed the case to proceed forward. While appeal to a district court is certainly an option for domain name registrants who had their domains “reverse hijacked” via the ACPA, it is a costly procedure and highlights the risk of trademark bullying by registered trademark owners that the ACPA can sometimes facilitate.

The UDRP Panel decision can be read here.

LawTechie is a blog focusing on trends in tech and digital media. Areas covered include intellectual property, cyberlaw, venture capital, transactions and litigation as they relate to the emerging sectors. The blog is edited by the firm's partner Tim Bukher with contributions from the firm's experts in their respective areas of law.

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