As expected, the U.S. House of Representatives passed legislation yesterday that would bar the intentional registration of domain names that are identical to or deceptively similar to a distinctive trademark.
The practice, known commonly as cyber-squatting, is usually practiced by those who intend to profit by reselling the registered names.
The legislation, co-authored by Representatives Jim Rogan (R-California) and Rick Boucher (D-Virginia), “prohibits registration, trafficking in, or use of a domain name that is identical to confusingly similar to, or dilutive of a mark that is distinctive at the time the domain name is registered.”
“In essence, the commerce-rich Internet is used as a tool for pirates, crippling legitimate businesses, and fattening the wallets of cyber-frauds,” explained Rogan.
Rogan also said that the intent of the legislation is to shore up consumer confidence in “legitimate brand names and discourage fraudulent electronic commerce.”
Fast Moving Bill
First introduced in the House on October 6th, the legislation follows a similar bill that passed the Senate in August.
As reported in the E-Commerce Times, the legislation would allow trademark holders to sue a cyber-squatter for a minimum of $1,000 (US$) and a maximum of $100,000 per trademark, per infringement. If the court determines that the offender misused the trademark intentionally, the penalties climb to a minimum of $3,000 and a maximum of $300,000. The legislation would also make the willful registration of a domain name using someone else’s trademark a criminal offense.
The first offense is a Class B misdemeanor, but it becomes a Class E felony for all subsequent offenses.
Unlike the Senate version, the House bill contains an amendment to make registering trademarks a bit easier, lowering the registration fee by $50. It also lowers the trademark maintenance fee by $110.