Trademark squatting in domain names – Virgin v. Benjamin

A trademark is generally a word, phrase, symbol, or design, or a combination of these elements, that identifies and distinguishes products manufactured by one company from products manufactured by another company. United States trademark law grants the owner of a trademark the exclusive right to brand goods with the trademark. United States trademark law is a hybrid of federal, state and common law rights. A trademark owner can register their trademark with the United States Patent and Trademark Office. Registration of a trademark is not mandatory to start using the trademark in commerce or to gain some rights to the trademark, but registration strengthens the trademark owner’s claim to the trademark. Registration of a trademark with the United States Patent and Trademark Office give the public notice of the registrant’s claim of ownership of the mark, a legal presumption of ownership throughout the United States, and the exclusive right to use the mark on or in connection with the goods and/or services listed in the registration.

If someone other than the trademark owner brands goods with a trademark then that can be considered trademark infringement. To support a trademark infringement claim in court, a plaintiff must prove that it owns a valid trademark, that the plaintiff was using the trademark before the defendant, and that the defendant’s use of the trademark is likely to cause confusion in the minds of consumers about the source of the products branded with the trademark.

Registering a trademark does not give not give the trademark owner the unlimited exclusive right to claim the trademark. When a trademark owner registers a trademark with the United States Patent and Trademark Office, the trademark owner indicates which classes of products will be branded with the trademark. The rights associated with trademark registration only extend to the classes of products with which the trademark is registered. So if a trademark is registered for use with bed sheets, the trademark owner would not likely win a trademark infringement suit against a defendant selling cars.

However, companies today are offering broader and broader product lines. If a bedding manufacturer and a car manufacturer are using the same trademark to brand goods, and one manufacturer decides to expand into the other’s product line, the other manufacturer must respond. The key point to a trademark is the association consumers make between a trademark and the manufacturer. If consumers begin to associate a trademark with a different company, the trademark owner can lose their rights to trademark.

Trademark rights must be jealously guarded.

An example of a company diligently policing the use of their trademark is VIRGIN ENTERPRISES v. FRENCHIE BENJAMIN, 1:18-cv-08540 (S.D. NY 2018). Virgin is a large multinational company that is best known for its airline. Virgin has over 115 trademarks, which incorporate the word Virgin, in the United States. Virgin’s subsidiary companies focus on the consumer sectors of travel and leisure, telecom and media, music and entertainment, financial services, and health and wellness. Frenchie Benjamin is an individual who registered the website domain VirginCapitalPartners.com, a company which claims to buy and sell promissory notes. Virgin sent Benjamin a cease and desist letter, which Benjamin did not respond to, but the website was taken down. Benjamin’s domain registration then expired and Virgin attempted to purchase the domain on the open market. Somehow Virgin failed to get the domain and Benjamin put the website back. Virgin contacted Benjamin, who said he would transfer ownership of the domain to Virgin for a price. Virgin responded that they do not negotiate with infringers, and Have not been able to contact Benjamin since.

Virgin sued Benjamin for trademark infringement. Virgin alleges that the defendant’s use of the word Virgin in the domain name will cause consumers to be confused and harm the plaintiff’s reputation. Virgin requests that the court order the defendant to destroy any material which bears the plaintiff’s trademark, transfer ownership of the domain to the plaintiff, and pay the plaintiff’s attorneys fees and damages. The defendant has not yet responded to the lawsuit.

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