Calendar No. 240

106TH CONGRESS

1ST SESSION S. 1255

A BILL

To protect consumers and promote electronic comother purposes. ment, dilution, and counterfeiting laws, and for merce by amending certain trademark infringeJULY 29, 1999

Reported with an amendment
II

Calendar No. 240

106TH CONGRESS

1ST SESSION S. 1255

To protect consumers and promote electronic commerce by amending certain

trademark infringement, dilution, and counterfeiting laws, and for other

purposes.

IN THE SENATE OF THE UNITED STATES

JUNE 21, 1999

Mr. ABRAHAM (for himself, Mr. TORRICELLI, Mr. HATCH, Mr. MCCAIN, and

Mr. BREAUX) introduced the following bill; which was read twice and referred to the Committee on the Judiciary

JULY 29, 1999

Reported by Mr. HATCH, with an amendment

[Strike out all after the enacting clause and insert the part printed in italic]

A BILL

To protect consumers and promote electronic commerce by

amending certain trademark infringement, dilution, and

counterfeiting laws, and for other purposes.

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled,

3 SECTION 1. SHORT TITLE.

4 This Act may be cited as the ‘‘Anticybersquatting

5 Consumer Protection Act’’.
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1 SEC. 2. FINDINGS.

2 Congress finds that the unauthorized registration or

3 use of trademarks as Internet domain names or other

4 identifiers of online locations (commonly known as

5 ‘‘cybersquatting’’)—

6 (1) results in consumer fraud and public confu7 sion as to the true source or sponsorship of products

8 and services;

9 (2) impairs electronic commerce, which is im10 portant to the economy of the United States; and

11 (3) deprives owners of trademarks of substan12 tial revenues and consumer goodwill.

13 SEC. 3. TRADEMARK REMEDIES.

14 (a) RECOVERY FOR VIOLATION OF RIGHTS.—Section

15 35 of the Act entitled ‘‘An Act to provide for the registra16 tion and protection of trade-marks used in commerce, to

17 carry out the provisions of certain international conven18 tions, and for other purposes’’, approved July 5, 1946,

19 (commonly referred to as the ‘‘Trademark Act of 1946’’)

20 (15 U.S.C. 1117) is amended by adding at the end the

21 following:

22 ‘‘(d)(1) In this subsection, the term ‘Internet’ has the

23 meaning given that term in section 230(f)(1) of the Com24 munications Act of 1934 (47 U.S.C. 230(f)(1)).

25 ‘‘(2)(A) In a case involving the registration or use

26 of an identifier described in subparagraph (B), the plain-
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1 tiff may elect, at any time before final judgment is ren2 dered by the trial court, to recover, instead of actual dam3 ages and profits under subsection (a)—

4 ‘‘(i) an award of statutory damages in the

5 amount of—

6 ‘‘(I) not less than $1,000 or more than

7 $100,000 per trademark per identifier, as the

8 court considers just; or

9 ‘‘(II) if the court finds that the registra10 tion or use of the registered trademark as an

11 identifier was willful, not less than $3,000 or

12 more than $300,000 per trademark per identi13 fier, as the court considers just; and

14 ‘‘(ii) full costs and reasonable attorney’s fees.

15 ‘‘(B) An identifier referred to in subparagraph (A)

16 is an Internet domain name or other identifier of an online

17 location that is—

18 ‘‘(i) the trademark of a person or entity other

19 than the person or entity registering or using the

20 identifier; or

21 ‘‘(ii) sufficiently similar to a trademark of a

22 person or entity other than the person or entity reg23 istering or using the identifier as to be likely to—

24 ‘‘(I) cause confusion or mistake;

25 ‘‘(II) deceive; or
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1 ‘‘(III) cause dilution of the distinctive

2 quality of a famous trademark.’’.

3 (b) REMEDIES FOR DILUTION OF FAMOUS MARKS.—

4 Section 43(c)(2) of the Act entitled ‘‘An Act to provide

5 for the registration and protection of trade-marks used in

6 commerce, to carry out the provisions of certain inter7 national conventions, and for other purposes’’, approved

8 July 5, 1946, (commonly referred to as the ‘‘Trademark

9 Act of 1946’’) (15 U.S.C. 1125(c)(2)) is amended by strik10 ing ‘‘35(a)’’ and inserting ‘‘35 (a) and (d)’’.

11 SEC. 4. CRIMINAL USE OF COUNTERFEIT TRADEMARK.

12 (a) IN GENERAL.—Section 2320(a) of title 18,

13 United States Code, is amended—

14 (1) by inserting ‘‘(1)’’ after ‘‘(a)’’;

15 (2) by striking ‘‘section that occurs’’ and insert16 ing ‘‘paragraph that occurs’’; and

17 (3) by adding at the end the following:

18 ‘‘(2)(A) In this paragraph, the term ‘Internet’ has

19 the meaning given that term in section 230(f)(1) of the

20 Communications Act of 1934 (47 U.S.C. 230(f)(1)).

21 ‘‘(B)(i) Except as provided in clause (ii), whoever

22 knowingly and fraudulently or in bad faith registers or

23 uses an identifier described in subparagraph (C) shall be

24 guilty of a Class B misdemeanor.
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1 ‘‘(ii) In the case of an offense by a person under this

2 paragraph that occurs after that person is convicted of

3 another offense under this section, that person shall be

4 guilty of a Class E felony.

5 ‘‘(C) An identifier referred to in subparagraph (B)

6 is an Internet domain name or other identifier of an online

7 location that is—

8 ‘‘(i) the trademark of a person or entity other

9 than the person or entity registering or using the

10 identifier; or

11 ‘‘(ii) sufficiently similar to a trademark of a

12 person or entity other than the person or entity reg13 istering or using the identifier as to be likely to—

14 ‘‘(I) cause confusion or mistake;

15 ‘‘(II) deceive; or

16 ‘‘(III) cause dilution of the distinctive

17 quality of a famous trademark.

18 ‘‘(D)(i) For the purposes of a prosecution under this

19 paragraph, if all of the conditions described in clause (ii)

20 apply to the registration or use of an identifier described

21 in subparagraph (C) by a defendant, those conditions shall

22 constitute prima facie evidence that the registration or use

23 was fraudulent or in bad faith.

24 ‘‘(ii) The conditions referred to in clause (i) are as

25 follows:
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1 ‘‘(I) The defendant registered or used an identi2 fier described in subparagraph (C)—

3 ‘‘(aa) with intent to cause confusion or

4 mistake, deceive, or cause dilution of the dis5 tinctive quality of a famous trademark; or

6 ‘‘(bb) with the intention of diverting con7 sumers from the domain or other online loca8 tion of the person or entity who is the owner of

9 a trademark described in subparagraph (C) to

10 the domain or other online location of the de11 fendant.

12 ‘‘(II) The defendant—

13 ‘‘(aa) provided false information in the de14 fendant’s application to register the identifier;

15 or

16 ‘‘(bb) offered to transfer the registration of

17 the identifier to the trademark owner or an18 other person or entity in consideration for any

19 thing of value.

20 ‘‘(III) The identifier is not—

21 ‘‘(aa) the defendant’s legal first name or

22 surname; or

23 ‘‘(bb) a trademark of the defendant used

24 in legitimate commerce before the earlier of the

25 first use of the registered trademark referred to
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1 in subparagraph (C) or the effective date of the

2 registration of that trademark.

3 ‘‘(iii) The application of this subparagraph shall not

4 be exclusive. Nothing in this subparagraph may be con5 strued to limit the applicability of subparagraph (B).’’.

6 (b) SENTENCING GUIDELINES.—

7 (1) IN GENERAL.—Pursuant to the authority

8 granted to the United States Sentencing Commis9 sion under section 994(p) of title 28, United States

10 Code, the United States Sentencing Commission

11 shall—

12 (A) review the Federal sentencing guide13 lines for crimes against intellectual property

14 (including offenses under section 2320 of title

15 18, United States Code); and

16 (B) promulgate such amendments to the

17 Federal Sentencing Guidelines as are necessary

18 to ensure that the applicable sentence for a de19 fendant convicted of a crime against intellectual

20 property is sufficiently stringent to deter such

21 a crime.

22 (2) FACTORS FOR CONSIDERATION.—In car23 rying out this subsection, the United States Sen24 tencing Commission shall—
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1 (A) take into account the findings under

2 section 2; and

3 (B) ensure that the amendments promul4 gated under paragraph (1)(B) adequately pro5 vide for sentencing for crimes described in

6 paragraph (2) of section 2320(a) of title 18,

7 United States Code, as added by subsection (a).

8 SEC. 5. LIMITATION OF LIABILITY.

9 Section 39 of the Act entitled ‘‘An Act to provide for

10 the registration and protection of trade-marks used in

11 commerce, to carry out the provisions of certain inter12 national conventions, and for other purposes’’, approved

13 July 5, 1946, (commonly referred to as the ‘‘Trademark

14 Act of 1946’’) (15 U.S.C. 1121) is amended by adding

15 at the end the following:

16 ‘‘(c)(1) In this subsection, the term ‘Internet’ has the

17 meaning given that term in section 230(f)(1) of the Com18 munications Act of 1934 (47 U.S.C. 230(f)(1)).

19 ‘‘(2)(A) An Internet service provider, domain name

20 registrar, or registry described in subparagraph (B) shall

21 not be liable for monetary relief to any person for a re22 moval or transfer described in that subparagraph, without

23 regard to whether the domain name or other identifier is

24 ultimately determined to be infringing or dilutive.
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1 ‘‘(B) An Internet service provider, domain name reg2 istrar, or registry referred to in subparagraph (A) is a pro3 vider, registrar, or registry that, upon receipt of a written

4 notice from the owner of a trademark registered in the

5 Patent and Trademark Office, removes from domain name

6 service (DNS) service or registration, or transfers to the

7 trademark owner, an Internet domain name or other iden8 tifier of an online location alleged to be infringing or dilu9 tive, in compliance with—

10 ‘‘(i) a court order; or

11 ‘‘(ii) the reasonable implementation of a policy

12 prohibiting the unauthorized registration or use of

13 another’s registered trademark as an Internet do14 main name or other identifier of an online loca15 tion.’’.

16 SECTION 1. SHORT TITLE; REFERENCES.

17 (a) SHORT TITLE.—This Act may be cited as the

18 ‘‘Anticybersquatting Consumer Protection Act.’’.

19 (b) REFERENCES TO THE TRADEMARK ACT OF 1946.—

20 Any reference in this Act to the Trademark Act of 1946

21 shall be a reference to the Act entitled ‘‘An Act to provide

22 for the registration and protection of trade-marks used in

23 commerce, to carry out the provisions of certain inter24 national conventions, and for other purposes’’, approved

25 July 5, 1946 (15 U.S.C. 1051 et seq.).
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1 SEC. 2. FINDINGS.

2 Congress finds the following:

3 (1) The registration, trafficking in, or use of a

4 domain name that is identical to, confusingly similar

5 to, or dilutive of a trademark or service mark of an6 other that is distinctive at the time of registration of

7 the domain name, without regard to the goods or serv8 ices of the parties, with the bad-faith intent to profit

9 from the goodwill of another’s mark (commonly re10 ferred to as ‘‘cyberpiracy’’ and ‘‘cybersquatting’’)—

11 (A) results in consumer fraud and public

12 confusion as to the true source or sponsorship of

13 goods and services;

14 (B) impairs electronic commerce, which is

15 important to interstate commerce and the United

16 States economy;

17 (C) deprives legitimate trademark owners of

18 substantial revenues and consumer goodwill; and

19 (D) places unreasonable, intolerable, and

20 overwhelming burdens on trademark owners in

21 protecting their valuable trademarks.

22 (2) Amendments to the Trademark Act of 1946

23 would clarify the rights of a trademark owner to pro24 vide for adequate remedies and to deter cyberpiracy

25 and cybersquatting.
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1 SEC. 3. CYBERPIRACY PREVENTION.

2 (a) IN GENERAL.—Section 43 of the Trademark Act

3 of 1946 (15 U.S.C. 1125) is amended by inserting at the

4 end the following:

5 ‘‘(d)(1)(A) Any person who, with bad-faith intent to

6 profit from the goodwill of a trademark or service mark of

7 another, registers, traffics in, or uses a domain name that

8 is identical to, confusingly similar to, or dilutive of such

9 trademark or service mark, without regard to the goods or

10 services of the parties, shall be liable in a civil action by

11 the owner of the mark, if the mark is distinctive at the time

12 of the registration of the domain name.

13 ‘‘(B) In determining whether there is a bad-faith in14 tent described under subparagraph (A), a court may con15 sider factors such as, but not limited to—

16 ‘‘(i) the trademark or other intellectual property

17 rights of the person, if any, in the domain name;

18 ‘‘(ii) the extent to which the domain name con19 sists of the legal name of the person or a name that

20 is otherwise commonly used to identify that person;

21 ‘‘(iii) the person’s prior use, if any, of the do22 main name in connection with the bona fide offering

23 of any goods or services;

24 ‘‘(iv) the person’s legitimate noncommercial or

25 fair use of the mark in a site accessible under the do26 main name;
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1 ‘‘(v) the person’s intent to divert consumers from

2 the mark owner’s online location to a site accessible

3 under the domain name that could harm the goodwill

4 represented by the mark, either for commercial gain

5 or with the intent to tarnish or disparage the mark,

6 by creating a likelihood of confusion as to the source,

7 sponsorship, affiliation, or endorsement of the site;

8 ‘‘(vi) the person’s offer to transfer, sell, or other9 wise assign the domain name to the mark owner or

10 any third party for substantial consideration without

11 having used, or having an intent to use, the domain

12 name in the bona fide offering of any goods or serv13 ices;

14 ‘‘(vii) the person’s intentional provision of mate15 rial and misleading false contact information when

16 applying for the registration of the domain name;

17 and

18 ‘‘(viii) the person’s registration or acquisition of

19 multiple domain names which are identical to, con20 fusingly similar to, or dilutive of trademarks or serv21 ice marks of others that are distinctive at the time of

22 registration of such domain names, without regard to

23 the goods or services of such persons.

24 ‘‘(C) In any civil action involving the registration,

25 trafficking, or use of a domain name under this paragraph,
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1 a court may order the forfeiture or cancellation of the do2 main name or the transfer of the domain name to the owner

3 of the mark.

4 ‘‘(2)(A) The owner of a mark may file an in rem civil

5 action against a domain name if—

6 ‘‘(i) the domain name violates any right of the

7 registrant of a mark registered in the Patent and

8 Trademark Office, or section 43 (a) or (c); and

9 ‘‘(ii) the court finds that the owner has dem10 onstrated due diligence and was not able to find a

11 person who would have been a defendant in a civil

12 action under paragraph (1).

13 ‘‘(B) The remedies of an in rem action under this

14 paragraph shall be limited to a court order for the forfeiture

15 or cancellation of the domain name or the transfer of the

16 domain name to the owner of the mark.’’.

17 (b) ADDITIONAL CIVIL ACTION AND REMEDY.—The

18 civil action established under section 43(d)(1) of the Trade19 mark Act of 1946 (as added by this section) and any rem20 edy available under such action shall be in addition to any

21 other civil action or remedy otherwise applicable.

22 SEC. 4. DAMAGES AND REMEDIES.

23 (a) REMEDIES IN CASES OF DOMAIN NAME PIRACY.—

24 (1) INJUNCTIONS.—Section 34(a) of the Trade25 mark Act of 1946 (15 U.S.C. 1116(a)) is amended in
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1 the first sentence by striking ‘‘section 43(a)’’ and in2 serting ‘‘section 43 (a), (c), or (d)’’.

3 (2) DAMAGES.—Section 35(a) of the Trademark

4 Act of 1946 (15 U.S.C. 1117(a)) is amended in the

5 first sentence by inserting ‘‘, (c), or (d)’’ after ‘‘section

6 43 (a)’’.

7 (b) STATUTORY DAMAGES.—Section 35 of the Trade8 mark Act of 1946 (15 U.S.C. 1117) is amended by adding

9 at the end the following:

10 ‘‘(d) In a case involving a violation of section 43(d)(1),

11 the plaintiff may elect, at any time before final judgment

12 is rendered by the trial court, to recover, instead of actual

13 damages and profits, an award of statutory damages in the

14 amount of not less than $1,000 and not more than $100,000

15 per domain name, as the court considers just. The court

16 shall remit statutory damages in any case in which an in17 fringer believed and had reasonable grounds to believe that

18 use of the domain name by the infringer was a fair or other19 wise lawful use.’’.

20 SEC. 5. LIMITATION ON LIABILITY.

21 Section 32(2) of the Trademark Act of 1946 (15 U.S.C.

22 1114) is amended—

23 (1) in the matter preceding subparagraph (A) by

24 striking ‘‘under section 43(a)’’ and inserting ‘‘under

25 section 43 (a) or (d)’’; and
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1 (2) by redesignating subparagraph (D) as sub2 paragraph (E) and inserting after subparagraph (C)

3 the following:

4 ‘‘(D)(i) A domain name registrar, a domain

5 name registry, or other domain name registra6 tion authority that takes any action described

7 under clause (ii) affecting a domain name shall

8 not be liable for monetary relief to any person

9 for such action, regardless of whether the domain

10 name is finally determined to infringe or dilute

11 the mark.

12 ‘‘(ii) An action referred to under clause (i)

13 is any action of refusing to register, removing

14 from registration, transferring, temporarily dis15 abling, or permanently canceling a domain

16 name—

17 ‘‘(I) in compliance with a court order

18 under section 43(d); or

19 ‘‘(II) in the implementation of a rea20 sonable policy by such registrar, registry, or

21 authority prohibiting the registration of a

22 domain name that is identical to, confus23 ingly similar to, or dilutive of another’s

24 mark registered on the Principal Register of
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1 the United States Patent and Trademark

2 Office.

3 ‘‘(iii) A domain name registrar, a domain

4 name registry, or other domain name registra5 tion authority shall not be liable for damages

6 under this section for the registration or mainte7 nance of a domain name for another absent a

8 showing of bad faith intent to profit from such

9 registration or maintenance of the domain name.

10 ‘‘(iv) If a registrar, registry, or other reg11 istration authority takes an action described

12 under clause (ii) based on a knowing and mate13 rial misrepresentation by any person that a do14 main name is identical to, confusingly similar

15 to, or dilutive of a mark registered on the Prin16 cipal Register of the United States Patent and

17 Trademark Office, such person shall be liable for

18 any damages, including costs and attorney’s fees,

19 incurred by the domain name registrant as a re20 sult of such action. The court may also grant

21 injunctive relief to the domain name registrant,

22 including the reactivation of the domain name

23 or the transfer of the domain name to the do24 main name registrant.’’.
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1 SEC. 6. DEFINITIONS.

2 Section 45 of the Trademark Act of 1946 (15 U.S.C.

3 1127) is amended by inserting after the undesignated para4 graph defining the term ‘‘counterfeit’’ the following:

5 ‘‘The term ‘Internet’ has the meaning given that

6 term in section 230(f)(1) of the Communications Act

7 of 1934 (47 U.S.C. 230(f)(1)).

8 ‘‘The term ‘domain name’ means any alpha9 numeric designation which is registered with or as10 signed by any domain name registrar, domain name

11 registry, or other domain name registration authority

12 as part of an electronic address on the Internet.’’.

13 SEC. 7. SAVINGS CLAUSE.

14 Nothing in this Act shall affect any defense available

15 to a defendant under the Trademark Act of 1946 (including

16 any defense under section 43(c)(4) of such Act or relating

17 to fair use) or a person’s right of free speech or expression

18 under the first amendment of the United States Constitu19 tion.

20 SEC. 8. SEVERABILITY.

21 If any provision of this Act, an amendment made by

22 this Act, or the application of such provision or amendment

23 to any person or circumstances is held to be unconstitu24 tional, the remainder of this Act, the amendments made by

25 this Act, and the application of the provisions of such to

26 any person or circumstance shall not be affected thereby.
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1 SEC. 9. EFFECTIVE DATE.

2 This Act shall apply to all domain names registered

3 before, on, or after the date of enactment of this Act, except

4 that statutory damages under section 35(d) of the Trade5 mark Act of 1946 (15 U.S.C. 1117), as added by section

6 4 of this Act, shall not be available with respect to the reg7 istration, trafficking, or use of a domain name that occurs

8 before the date of enactment of this Act.