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Reverse Domain Hijacking Suit Proceeds Against Mark Owner

by Cheryl Beise, Legal Editor, CCH Trademark Law Guide  

An individual who purchased the domain name "airfx.com" could pursue a reverse domain hijacking claim against an Indiana vehicle parts business that owned the trademark AIRFX, the federal district court in Phoenix has held.

The individual purchased airfx.com in 2006 from its then-owner for use in connection with an indoor wind tunnel business he was developing under the tradename AIRFX. The Indiana business twice demanded that the individual sell airfx.com and "turn over control" of his website. When the individual refused, the Indiana business filed a domain dispute pursuant to the Uniform Domain Name Dispute Resolution Policy (UDRP). The UDRP panel ordered transfer of the name, but the individual filed the instant action during a ten-day window before the transfer occurred.

"Reverse Hijacking"

A cybersquatter "hijacks" a domain name when he obtains it in violation of a trademark owner's rights under the Anticybersquatting Consumer Protection Act (ACPA). Conversely, a trademark owner who "overreaches" when exercising his ACPA rights "reverse hijacks" the domain name. The ACPA permits a domain name owner to file a civil action to establish that his use of the domain name is lawful, 15 U.S.C. ยง1114(2)(D)(v). To state a reverse domain hijacking claim under the ACPA, a plaintiff must allege that: (1) the domain name was registered to the plaintiff; (2) the domain name was "suspended, disabled, or transferred" under a policy implemented by a registrar; (3) the trademark owner had notice of the action; and (4) the plaintiff's registration and use of the domain name was lawful.

Lawfulness of Registration

A person violates the ACPA if he registers a domain name with a bad faith intent to profit from use of another's trademark. The individual adequately alleged that his registration and use of airfx.com did not violate the ACPA. Specifically, he alleged that he: (1) adopted and used the trade name "AIRFX" in 2006 for a new wind tunnel business he had taken significant steps to develop; (2) purchased airfx.com in 2007 to use as his business website; (3) never offered to sell airfx.com; (4) never used the Indiana business's trademark, which was neither famous nor distinctive; and (5) did not seek to divert the Indiana business's customers.

The Indiana business failed to rebut the individual's allegations, relying instead on the UDRP panel decision as proof that the individual's registration of airfx.com was unlawful. The business contended that its attempt to purchase airfx.com in an effort to protect its trademark rights did not rise to the level of harassment required to establish "overreaching." The business also sought dismissal on the grounds that the domain name had not been "suspended, disabled, or transferred." In the alternative, the business sought to transfer the action to Indiana.

None of the business's arguments had merit, according to the court. The UDRP panel decision was not binding and could not be relied upon to prove unlawfulness. The ACPA did not require a plaintiff to show "harassment" in order to prevail on a reverse hijacking action. In addition, while not yet considered by the Ninth Circuit, other courts have held that a plaintiff can bring a reverse hijacking claim even though a domain name has not been transferred, as long as a transfer has been ordered pursuant to a UDRP decision. Finally, the Indiana business had no grounds to object to Arizona as an inappropriate forum for the dispute, given that it chose Arizona as the venue for its UDRP complaint.

AIRFX.com, D Ariz., ¶61,890.