California clothing maker’s cybersquatting case sets precedent

Disputes over intellectual property ownership are placing fresh challenges before courts every day. Internet laws develop and update slowly compared to the complex legal issues they cover. A lawsuit recently filed by California clothing maker True Religion Apparel will determine the rigidity of cybersquatting laws.

Cybersquatting is the act of registering a domain name with a perceived commercial value, based on another party’s trademark. For example, the domain name coke.com could be bought with the intention of attracting Internet visitors searching for Coca-Cola. The cybersquatter makes a profit by hijacking customers or selling the domain name to the soft drink maker.

In fact, Coca-Cola owns coke.com, which transfers visitors directly to the company’s main website. It’s a common intellectual property defense strategy for businesses to buy trademark-associated domain names, including misspelled ones, to block profiteers.

The True Religion lawsuit claims that the person who owns truereligion.com, a site promoting Islam, is poaching from the True Religion clothing trademark. The legal twist is that truereligion.com was registered in 1998 – four years before the clothing company ever existed.

True Religion asserts that truereligion.com’s owner turned his infrequently visited domain into a booming, “repurposed” business after computer users looking for the California clothing manufacturer clicked on the religious website. Ad revenues were generated and links on the site began connecting to places that sold True Religion products.

International arbitrators at the United Nation’s World Intellectual Property Organization said that truereligion.com was legitimately registered and operated. The website owner agreed to drop the domain name’s price to $380,000, from an initial $1 million offer rejected by True Religion Apparel.

The clothing company chose to proceed with the legal claim to force the website’s surrender and have truereligion.com’s owner fork over the allegedly ill-gotten profits.

Legal observers are anxious to know whether a court will allow the wealthy, worldwide clothing business to prevail over the preexisting owner of the domain name. In turn, California website owners will learn whether accidental trademark-related profits are permissible.

Source: bostonglobe.com, “The case of True Religion v. truereligion.com” Edward Mason, Nov. 12, 2013

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