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.

Snafu Caused Loss of Domain Name: Now What?

Dear Rich: I had a URL (domain name), connected to a network of 3 sites. Due to an email account error, the registration was lost. The day it went public and I found out it got bought. I have been running the domain name for a mortgage network and I've owned this site since 2004. I noticed the place-holder page put up for the domain is for a company that is in the Cayman Islands so I am sure it is a crook who bought it for cybersquatting or to steal it. I have sent the company a letter saying they must release it or they will get a cease and desist and I will file with ICANN. What are my rights, what can I do? We're sorry to hear about your domain name loss. Apparently there are companies out there who wait for domain names to expire and then snap them up. Sometimes, the purchase is made in order to sell it back to the previous owner (who is often unaware that the domain has even expired). Sometimes, it's purchased because the new buyer believes that the domain still has some SEO value and so, it can be sold to a third party who can milk it for a few percentage points in Google Analytics.
Is it cybersquatting? Cybersquatting is when someone buys and sells a domain name with the bad faith intent to profit from another company's trademark. (We explain it in more detail, here.) For example, it would likely be cybersquatting if (1) the company set up a site that diverted your customers, (2) the company, in advertising the domain name for sale, mentioned that the potential buyer could trade off your previous traffic, or (3) the company set up a page with Google Ads listing you and your competitors. If the company contacted you, unsolicited, after buying the domain and offered to sell it back to you at a much higher price, that would likely be cybersquatting, too. It would not be cybersquatting if the company set up a non-competitive site for another company or if the company did nothing but set up a  blank page. That's because there's no proof of bad faith intent. After all, it's not illegal to simply buy and sell domain names (without bad faith).
Should you proceed to ICANN? You are unlikely to get the domain name back by sending threatening letters. Most domain name dealers are not cowed by legal letters. They know you can only get the domain name back by (1) filing a federal cybersquatting lawsuit (probably way too expensive for you), or (2) by seeking domain name arbitration at ICANN. If you go the ICANN route, your filing expenses are, at minimum, $1500. It takes six months, requires a considerable amount of paperwork and documentation and may cost more if lawyers are involved. Remember, it's not enough to say that the company bought your domain name, you need to prove bad faith. And of course, there's no guarantee you'll prevail (although complaining parties prevail in 84% of the cases). Many people don't want the wait or the uncertainty of ICANN so they simply contact the new owners and pay for the domain name -- often forking over a sum between $2,000 and $3,000 because that's how much they would likely end up paying in time and money for an ICANN arbitration.