Site Wants to Stop Store With Similar Domain Name

Dear Rich: We have an online website store and an even though we're a small business we're pretty well-known amongst guitarists for selling  hard-to-find pedals and accessories. We've been in business for 12 years and have registered our trademark with the USPTO. A new company used the same domain name but added an "S" and they sell digital guitar samples and loops for download. We found out about them because we got a complaint from one of their customers. Can we use domain name arbitration to force them to stop using their domain name? Trademark owners are empowered to stop others from using similar names on similar goods. In this case, you sell pedals (hardware) and they sell loops (digital goods). In order to summon your trademark mojo, you'll need to make a convincing argument that customers are likely to associate you with both products -- that is, it wouldn't be unexpected that you would expand your product line to include samples and loops. An attorney might be able to help you make a convincing argument. You can then ask the other company to stop entirely. Or, short of their giving up the domain, you can try to reach an agreement to head off confusion -- for example, to include a mutual link back to the respective websites.  If they reject your requests and seem well-heeled and ready for litigation, think carefully before you start swinging. Litigation often costs way more than the amount you may lose from customer confusion.
As for domain name arbitration ... Your type of case where the two domains sell different products, is a tough case to win in arbitration. That’s because this system is set up to stop cybersquatters – those who acquire domains in bad faith. Typically that’s demonstrated when the domain is held captive or is used to divert customers. It's tougher to prevail when the domain is acquired for a legitimate business purpose that doesn’t compete with the trademark owner. You'll need to argue that the other site is acting in bad faith and deliberately creating confusion. Be warned, the arbitrators are not predictable. Although it's true that trademark owners win about 80% of the time, that’s a little misleading because a large number of these cases are defaults -- the other side doesn’t bother to respond. The fee to file for one-person arbitration is $1500.