SW Legal studies in Business

Cybersquatter Violated Anitcybersquatting Consumer Protection Act
Description Appeals court affirmed that a cybersquatter who registered vw.net did so in bad faith for the primary purpose of selling the name. Volkswagen's trademark was infringed upon and the company had the right to have the domain name turned over to it.
Topic Cyberlaw
Key Words Trademark; Domain Name; Cybersquatting
C A S E   S U M M A R Y
Facts Virtual Works registered vw.net with Network Solutions (NSI), the only government-authorized registrar for domain names at the time. The two partners of Virtual were aware that Internet users might think vw.net was affiliated with Volkswagen. One of the partners called Volkswagen's trademark department and told them that unless Volkswagen bought the domain name from Virtual within twenty-four hours, they would sell the name to the highest bidder. Volkswagen invoked NSI's dispute resolution procedure. Both parties sued for the right to the name. The district court granted Volkswagen's motion for summary judgment on its cybersquatting, trademark dilution, and trademark infringement claims. The court ordered Virtual to relinquish the vw.net name to Volkswagen. Virtual appealed.
Decision Affirmed. Cybersquatting is the practice of registering well-known brand names as Internet domain names in order to force the rightful owners of the marks to pay for the right to engage in electronic commerce under their own brand name. The registration of vw.net was in violation of the Anti-cyberquattting Consumer Protection Act since the primary purpose of the registration was to extract money for the name from the highest bidder. A party acting in bad faith is not protected by the safe harbor provision of the Act that allows good faith use of names that resemble famous trademarks. The purpose of the Act is to prevent the expropriation of protected marks in cyberspace and to reduce consumer confusion.
Citation Virtual Works, Inc. v. Volkswagen of America, Inc., 238 F.3d 264 (4th Cir., 2001)

Back to Cyberlaw Listings

©1997-2002  SW Legal Studies in Business. All Rights Reserved.