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RealTime IT News

A Boost for Cybersquatters?

When the Supreme Court ruled Monday that the sound-alike name of a Kentucky mom-and-pop sex toy shop was not enough to establish trademark violation against Victoria's Secret, the decision was seen as a serious blow to efforts by big business to curb cybersquatting.

In a landmark 9-0 ruling, the Supreme Court ruled that there was no evidence that the 'Victor's Secret' store name diluted the brand and lessened the trademarks owned by the more popular 'Victoria's Secret'.

"The evidence in this case is insufficient to support summary judgment on the dilution count. There is a complete absence of evidence of any lessening of the Victoria's Secret mark's capacity to identify and distinguish goods or services sold in Victoria's Secret stores or advertised in its catalogs," the Supreme Court ruled.

"Any difficulties of proof that may be entailed in demonstrating actual dilution are not an acceptable reason for dispensing with proof of an essential element of a statutory violation," according to the judgment.

In rendering judgment, Justice John Paul Stevens said the mere fact a consumer might think of the big company when encountering a similar name is not enough to establish a trademark violation.

The Supreme Court decision could have a major influence on numerous domain name and cybersquatting squabbles that have littered the Internet landscape.

Back in 1999, the House passed a bill to outlaw cybersquatting, a law that was opposed by many who felt it imposed on Internet free speech and gave trademark holders the upper hand in disputes with smaller companies that may have a claim to the same name or word that a larger company has as a registered trademark.

That cybersquatting law made it illegal to register or traffic in a domain name "that is identical or confusingly similar to a trademark or service mark of another that is distinctive at the time of the registration of the domain name, or dilutive of a famous trademark or service mark of another that is famous at the time of the registration of the domain name."

But, by striking down Victoria's Secret's complaints that the "Victor's Secret" name infringed its trademark and devalued its brand, the Supreme Court has narrowed the interpretation of what might constitute domain squatting.

The law was put in place to curb "bad-faith intent to profit" from the goodwill of another's mark. It was enacted to block cybersquatters from registering domains of popular movie titles, company names or the names of products, then demand large sums of money to turn them over to trademark holders.