The Merits of Moving a Business Or Domain Name Portfolio Outside of the United States

Some courts have declined to exercise in rem jurisdiction where there is no associated registrar, registry, or other authority associated with the domain names. This is particularly important to keep in mind when making a determination about how best to enforce your intellectual property rights. There are two major methods for enforcing these rights;

One, the Anti-cybersquatting Protection Act (ACPA) enables litigation to be brought by the owner of a trademark against domain name registrants where the complainant can establish that the registrant; (1) has a bad faith intent to profit from the mark, (2) registers, traffics in, or uses a domain name, (3) that is either identical or confusingly similar to a distinctive mark or is identical, confusingly similar or dilutive of a famous mark

Two, the Uniform Domain Name Dispute Resolution Policy (UDRP) has been uniformly integrated into the global market of the registration of domain names by the Internet Corporation for Assigned Names and Numbers (ICANN). Importantly, domain registrars provide little if any oversight to make sure consumer registrants are not registering domain names that would infringe upon the rights of a trademark or brand owner. However, any entity registering a domain name automatically must represent and warrant that such registration does not impinge upon the rights of any third party (brand owner). Further, the UDRP ensures that all domain registrants agree to participate in an arbitration-like proceeding should any third party assert a claim against the domain name or registrant.

Any third party asserting a claim against a domain name or registrant must prove the following in order to be successful in a UDRP proceeding;

(1) The domain name is identical or confusingly similar to a trademark or service mark in which the complainant has rights; (2) The registrant does not have any rights or legitimate interests in the domain name; and (3) The registrant registered the domain name and is using it in "bad faith."

The UDRP enables suit to be filed against a domain name, registered anywhere globally, because of the mandatory opt-in to arbitration when registering a domain name. Somewhat more situational is the ability to file a successful suit under the ACPA. This is because not all courts handle jurisdiction over foreign registered domain names equally. For instance, some state jurisdictions do not authorize an exercise of jurisdiction over domains where there is no registrant, registrar, registry or other authority associated with the domain names in that state.

The state of Nevada is among those jurisdictions. The recent ACPA lawsuit filed in Nevada by Andre Agassi and his wife, Steffi Graf, serves poignantly to illustrate this point. Deborah Logan wrote in her article "Moving Offshore Jurisdiction in an Internet World Without Borders" summarizing the World Class Tennis Stars' attempt to derail 3rd party cybersquatters who had registered domain names with the Stars' personal names;

"No registrar, registry or other authority associated with the domain names was located in Nevada, and the court found that no in rem jurisdiction could be exercised over the domain names. It appears that plaintiffs had intended to serve the complaint on the domain name registrars in the hope that the registrars would sign Registrar Certificates to be deposited with the district court in Nevada thereby establishing jurisdiction over the domain names. However, this strategy failed."

However, it is important to note that this Nevada decision is not representative of a national stance on jurisdiction over foreign defendants. In contraposition to Nevada, there have been several court cases in recent years have held that US courts can still claim jurisdiction over a domain name regardless of the location of the registrant or domain name registrar.

It is also important to take note that any domain name or owner of a Website that has direct contact with individuals in the US (ex: stream of commerce- sale and export of items from a foreign source into the US), will likely be susceptible to personal jurisdiction in any US state.

To muddy up the waters further, sometimes the act of moving a domain name portfolio to a non-US registrar is viewed by the courts as evidence of bad faith, which when taken into account in giving the ruling can have a very damaging effect on a domain name or Website owner's prospects of winning a UDRP or ACPA dispute.

To summarize, a UDRP proceeding likely always available against an infringing domain name. Suit filed under the ACPA is more likely to succeed in establishing some sort of jurisdiction over the defendant if the registrant, registrar, registry, or other authority associated with the domain is located within the same judicial district as the suit was filed in. Selling items to US consumers likely submits that Website or its owner to personal jurisdiction in the US. And, be wary of moving a domain portfolio overseas so as not to give evidence of bad faith.

Benefits of Understanding the Value of Your IP   Starting Your Career As An Intellectual Property Lawyer   Do You Need a Lawyer to Respond to a UDRP?   What Is the Protection of Business Names Under Intellectual Property Law?   

Why Protecting Your Business Is Vital

You are an offline and online business owner; your website and blog generates business for your physical location on Main Street. According to Tom Donahue, president and CEO of the U.S. Chamber of Commerce, as one of 26 million Americans you are the core of this nation's workforce. Businesses such as yours employ just under 100 percent of all of the employers in the U.S.

For several years now you have struggled through the current economic depression; your doors are still open. You are passionate about your business; who you are; what you do; what you bring to your customers: Plumber, architect, painter, landscaper, owner of a boutique. Internet business consultant, social media strategist, multi-level network marketer, direct sale distributor, you are the expert in your field.

As you prepare for 2011 your thoughts focus on all of the various protections you have set up for yourself, your family and your home. As a working-class citizen, just what type of insurance coverage do you have. You review your current list:

Life, health, home-owners, and auto insurance; these are the main types of coverage most people have. If you rent an apartment, you may have renter's insurance. As you sit in your living room and look around, you may also have warranties on your large kitchen and household appliances; your furniture; TV, camcorder, computer, game system, cell phone, and a few other electronic devices you may own.

As a private business owner, you are concerned about your expenses, services or merchandise, income, and taxes. In these difficult economic times, where do you gain the necessary capital to continue to operate and be successful? Then there is the risk management of your goods and/or services; you want to guard against the risk of a contingent and uncertain loss.

You do it all, but there's always more to do, always. It can be overwhelming, and it can distract you from the business of running your business. As a self-employed business owner, who handles the legal aspect of your business? If it's you, do you know how? Do you know what's available to you? Do you know what questions to ask?

As a customer, who do you call when your new washing machine quits and the manufacturer refuses to cooperate? What do you do when your jeweler sells you defective merchandise and the owner refuses a refund. What do you do if you slip on a wet floor in the store, are injured but the owner refuses liability?

Some of us may call on a relative or a friend who happens to be an attorney. That may work well, for that particular attorney's expertise. In doing business and providing goods and services, for any breach of contract or violations you may encounter, coverage is necessary because it provides legal protection against lawsuits, and gives you access to legal services for your own questions at minimum cost.

If you give a speech or a webinar online and accept customers for your business, other than a "money-back guarantee" for services rendered, what other protections do you have in the event you encounter a dissatisfied customer? These are questions your attorney relative/friend may not be able to answer.

The majority of your business transactions involve contracts. If you are an owner of a small restaurant you have to negotiate through many contracts; from renting the space; liability insurance, merchandise, phone service, city ordinances, state licenses and laws, physical business security; this lists goes on. If you were an online business owner you are also negotiating contracts. Domain name registration and legal issues with domain names; web hosting agreements; affiliate contracts; privacy agreements; service protection; copyrights and copyright infringements; trademarks and trade names; consumer rights protection; this list will go on and on. As business owners we constantly need quick access to legal advice and a law firm that can provide quick legal advice.

You may already have retained a tax attorney, a CPA, business investors or partners, and advertisers; all of which can be destroyed with a lawsuit. What if your insurance company is doing you an injustice, where would you go? What if your business partners are stealing from you, who would you contact?

When obtaining insurance for yourself, your family, your home and your possessions, preventive legal protection for your business can provide you consultations on an unlimited number of business questions, topics, and situations. A law firm can provide you with attorneys that are specialists in your particular industry.

As a private business owner a law firm can help your business gain a competitive edge for that larger contract that you feel you are qualified for, but may not know how to obtain.

Benefits of Understanding the Value of Your IP   Starting Your Career As An Intellectual Property Lawyer   Do You Need a Lawyer to Respond to a UDRP?   What Is the Protection of Business Names Under Intellectual Property Law?   Every Innovative Irish Idea Deserves to Be Protected Correctly in Law