Blame it on the Cybersquatters: How Congress Partially Ends the Circus Among the Circuits with the Anticybersquatting Consumer Protection Act

Congress blamed the cybersquatters for the need to pass another trademark cyberlaw. Congress enacted the Anticybersquatting Consumer Protection Act (“ACPA”) on November 29, 1999. The ACPA aimed to protect consumers and businesses, to promote the growth of electronic commerce, and to provide clarity in the law for trademark owners by prohibiting cybersquatting activities on the Internet. Prior to the enactment of the ACPA, the Federal Trademark Dilution Act (“FTDA”), which was passed by Congress in 1995 and became effective on January 16, 1996, was hailed as a powerful tool to combat cybersquatters on the Internet. That presumed powerful tool turned out to have very little magic. Congress passed the FTDA with so little debate that it left many ambiguous terms undefined, such as distinctiveness, fame, and dilution. These terms were immediately subjected to a wide, polarized range of judicial interpretations by a number of circuit courts. A circus among the circuit courts has been created as some courts extend the FTDA protection only to “nationally renowned” trademarks while others only require the protected trademarks to be known within a niche market. Another circuit court takes an extreme position, requiring the protected trademarks to possess both fame and heightened distinctiveness as a prerequisite to protection under the FTDA. On the dilution element of the FTDA, some circuits require actual, consummated, dilutive harm to famous marks, while others demand only a likelihood of dilution between the famous mark and offending mark. The rigorous standard of proving a dilution claim under the FTDA, coupled with the conflicting rulings among the circuit courts, sends trademark owners back to the beginning in their combat against diluters, particularly cybersquatters. As a result, the once wildly celebrated FTDA turns out to lack much luster.Congress, instead of admitting that the problems associated with the FTDA stemmed from Congress' haste to pass the FTDA without sufficient legislative history or clear guidance that would lead to a coherent and uniform interpretation, blamed the shortcomings of the FTDA on cybersquatters. To cure the shortcomings and outsmart the cybersquatters, Congress then passed the ACPA. Unlike the FTDA, the ACPA does not require a trademark to be both distinctive and famous in order to be protected. Nor does the ACPA impose a finding of actual dilution or likelihood of dilution. The ACPA requires a less stringent standard that protects the trademark if the domain name is “identical or confusingly similar” to the distinctive mark. The ACPA, however, only applies to cases involving unauthorized use of protected trademarks with “bad faith intent to profit” from the goodwill of the trademarks as domain names. This means that an owner of a distinctive and/or famous trademark has protection against dilution use only in the form of a domain name. Trademark owners, ironically, have no anti-dilution protection under the ACPA if the defendant used a dilutive trademark in commerce, but did not register the dilutive trademark as a domain name. Trademark owners once again are forced back to the circus among the circuits because their only potential protection against the dilutive use is through the FTDA. Most trademark owners, however, will not be able to satisfy the elements of proof under the FTDA because “fame” and “dilution” within the meaning of the FTDA impose an extremely high burden of proof. FTDA protection is available for very few trademarks. In other words, Congress has not fixed all of the shortcomings in the FTDA. This Article will examine both the FTDA and the ACPA and how Congress has created additional shortcomings with the passage of the ACPA. Further, this Article will propose what should be done to resolve some of the problems. Part II discusses briefly the legislative history of the FTDA. Congress blamed the cybersquatters when it passed the FTDA, but failed to cure the cybersquatting problem. Part II analyzes the shortcomings of the FTDA as exhibited in the expanding disarray of judicial interpretations of distinctiveness, niche, fame, and dilution. Part III discusses the legislative history of the new ACPA, illustrating a trend in congressional action on trademark-related cyberlaw: blaming the cybersquatters instead of reflecting on the problems with trademark dilution in both Internet and non-Internet contexts. Part III also analyzes the elements of the ACPA along with recent legal interpretations of the new Act. In addition, Part III identifies the birth of new problems in various provisions of the ACPA and suggests solutions to resolve these specific problems. Part IV discusses how the ACPA fails to fix the shortcomings associated with the FTDA. Further, Part IV demonstrates how the ACPA creates two different classes of protection among trademark owners depending on where the trademark diluter committed the wrong. One trademark owner has an appropriate remedy because the diluter is operating on the Internet while a second trademark owner has no remedy against similar dilution as the diluter is operating in the brick and mortar world. The Article concludes that there is a need for new trademark-related cyberlaw to avoid the similar types of problems seen in both the FTDA and the ACPA. New trademark-related cyberlaw should address the multiple facets of problems involving trademarks and domain names in cyberspace; in addition, it must also avoid piecemeal, incoherent, and inconsistent legislation that will hinder the growth of electronic commerce. Further, any such new cyberlaw must avoid the appearance of an “e-preferred” remedy. A defendant's conduct that is legislated as illegal in cyberspace should also be deemed illegal outside cyberspace. Otherwise, trademark-related cyberlaw will create unfair protection among trademark owners..