With the rapid spread of the internet in the early 1990s, the importance of domain names became clear. At that time, a race to claim domain names began among internet users. Some individuals registered the names of major brands with the intention of selling these domain names back to the brand owners at high prices.
During this period, stories were often told portraying domain flipping as a quick way to get rich. However, the reality was quite different. Companies whose brand names were taken by others applied to the courts and successfully secured the transfer of those domain names.
As early as 1995, the animal rights organization PETA (People for the Ethical Treatment of Animals) filed a lawsuit to recover the domain name “peta.org.” The domain name had been used in bad faith by exploiting PETA’s acronym. PETA won the lawsuit and reclaimed the domain name.
Domain speculator Dennis Toeppen registered the domain names of famous brands, such as “intermatic.com,” and tried to sell them to their owners at high prices. Intermatic was a clock and timer brand. A US court found Toeppen liable in 1996.
The fashion house Chanel filed lawsuits against individuals who registered similar domain names (such as “chanelstore.com” and “chanelfashion.com”). WIPO ruled that these domain names must be transferred to Chanel (2000).
If a domain name is identical or similar to a registered trademark and was registered in bad faith, the trademark owner can take legal action, and the domain name can be transferred to the trademark owner free of charge.
Profiting by exploiting a brand’s reputation is considered bad-faith use. For example, buying a domain name and putting it up for sale, or creating the impression that a website is associated with the brand, falls into this category. In the example above, even posting a sale listing is considered proof of bad faith.
Trademark rights are protected by various laws worldwide. Registering someone else’s brand name as a domain name and misusing it is illegal.
If a domain violates the trademark rights of a brand, that domain name can be deleted or transferred to the brand owner. Additionally, the person who registered the domain name in bad faith may face fines and legal costs.
If you are thinking of registering and selling domain variations of well-known brands with dreams of “fast money,” you should stop immediately. Organizations like WIPO have already resolved thousands of similar cases. Brands protect themselves with large teams of lawyers and almost always win against individuals.
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