One problem with the Internet, non-existent before 1994, is the confrontation between persons who, either intentionally or unintentionally, create an address on the Internet which includes someone else's trademark. — Michael A. Daniels [1], Chairman of the Board for Network Solutions Inc. (July 1999)

With the difference of just a month the Anti Cybersquatting Consumer Protection Act (ACPA) was enacted in November 29, 1999 while the Uniform Domain Name Dispute Resolution Policy (UDRP) of ICANN was approved in October 24, 1999. While any decision to pursue cyber-squatters under the ACPA or the UDRP belongs to the trademark owner, the attorney who advises the trademark owner should have a good working knowledge of the benefits and weaknesses of each method.

The UDRP and ACPA differences – their advantages and inconveniences

The ACPA and the UDRP provide two separate and distinct methods for resolving domain name disputes. Both alternatives have many critics and proponents, but the true value of each will ultimately be determined by how well each combats cyber-squatting. Separately, the UDRP and the ACPA will probably work well to defuse most of the cyber-squatting that is currently invading the Internet. If combined together the UDRP and the ACPA can be a cost saving and effective way to prevent cybersquatting with the top-level domains (TLDs), the country codes top-level domains (ccTLDs) and the future new generic top-level domains (gTLDs). Nonetheless, neither is specifically tailored to be more effective for any specific case, but each one provides noticeable benefits to different types of cases.

Because the UDRP is less expensive than litigation, ICANN's UDRP is probably best suited for small businesses and trademark owners that are merely attempting to stop the use of their trademark. This method will also be helpful to those trademark owners who are fighting registrants that registered their domain names prior to the enactment of the ACPA, because under the ACPA, the trademark owners would not be able to receive damages.

Litigation under the ACPA [2] will be better suited for celebrities, i.e., Tom Cruise, Brad Pitt, etc., and for large companies seeking damages. Also, the 'in rem' proceeding seems enticing, but the well-advised counsellor should note that this proceeding is used only in very specific circumstances. The downside of ACPA lawsuit, is that lawsuits are extremely expensive, time-consuming, stressful and uncertain.

Considerable investment is required in terms of a good attorney and it can take years to get a resolution as to be successful in an ACPA lawsuit, the trademark owner must prove:

(1) that the mark is valid; 
(2) the mark was distinctive when the site was registered; and 
(3) the domain is identical or confusingly similar to the mark. 
(4) the website owner registered the site in bad faith in order to profit from the mark;

The 'in rem' provision in the ACPA lawsuit is limited to the United States because ACPA is a U.S. Statute, hence the concerned trademark business needs to have substantial ties to the U.S. in order to bring a case under the ACPA lawsuit in U.S. Courts for example CNN news Vs CNN china.

If speed and cost efficiency are the two most desirable objectives for the client, then the UDRP is the best alternative. If these two objectives are not the primary concerns, then the ACPA may be a better alternative.

Some of the major drawbacks [3] of an UDRP proceeding is that there is no possibility of monetary damages in a UDRP proceeding. This is probably the major reason that some individuals or organisations prefer to take their chances with a lawsuit. Also, there is no opportunity for investigation, like there is in a civil lawsuit. The arbitrator's decisions are mandatory in the sense that accredited registrars are required to take the necessary steps to enforce the decision, such as transferring the concerned name. However, under the UDRP, either party retains the option to take the dispute to a court for independent resolution. Thus, it is possible that the dispute will not end at arbitration.

Another consideration focuses on when the domain name was registered. If the registration date is prior to the enactment of the ACPA then statutory damages are unavailable, making litigation appear financially less interesting. The UDRP applies to domain names registered prior to the ACPA, but the UDRP only applies to top-level domain names. Country code domain names are not covered under the UDRP and, in those cases, the ACPA is the only option. If the client merely wants the domain name transferred or cancelled, then the UDRP makes more sense economically (so long as the domain name is a top-level domain name). The ACPA provides for transfer and cancellation, but these remedies are only available once the client has gone through the legal process and thus, accrued attorney fees and court costs. Also if the registrant is unavailable or cannot be found, then the ACPA is the only remedy that is available to the client. It can be argued that the UDRP has a comparable method because when a registrant does not respond to the complaint the proceeding continues and judgement is rendered without a response.

Of course if damages are important, the ACPA is the appropriate method for battling the cyber-squatter. If time is most important and no injunction is necessary, then the UDRP may be more appropriate. If time and money are not important and the client does not care whether he receives damages or not, then either may be chosen. It is interesting how a simple choice between two options can become a complicated decision. This underscores the fact that there are no absolutes in the law and that advising a client regarding which avenue to take when battling a cyber-squatter is no exception.

Bibliography

[1] Internet Domain Name Hearings, prepared testimony of Michael A. Daniels, Chairman of the Board for Network Solutions, Inc. (July 1999), available at http://commdocs.house.gov/committees/judiciary/hju63594.000/hju63594_0f.htm

[2] Diane L. Kilpatrick, University of Houston business and tax law journal (2002) http://www.hbtlj.org/v02/v02_kilpatrick.pdf

[3] Sarah Bird, 'Trademark Law and Domain Names: ACPA or UDRP?' (March 2008) available at http://www.seomoz.org/blog/trademark-law-and-domain-names-acpa-or-udrp