A federal appeals court in California has determined that registering Internet domain names for purely speculative reasons illegally infringes on a company's trademark rights.
The Ninth Circuit Court of Appeals in San Francisco found that Dennis Toeppen of Champaign, Illinois, had registered "panavision.com" and "panaflex.com" only to make money from the trademarked names by selling those domain names back to Panavision International LP, which owns the trademarks.
Toeppen didn't use the domains to sell or promote goods or services, but the court determined that because he registered these names -- along with hundreds of other well-known names -- with the intent to arbitrage their value, it constituted a "commercial use in commerce" that diluted Panavision's marks in violation of the Federal Dilution Act. The court enjoined Toeppen from any further use of the domain names and ordered him to transfer the names to Panavision.
Toeppen had previously lost a similar case when he registered "intermatic.com," a trademark of electronic equipment maker Intermatic.
The judge's ruling isn't that surprising -- it fits into the quickly growing history of Internet domain trademark cases, says David Kelly, an attorney at Finnegan, Henderson, Farabow, Garrett and Dunner LLP, a law firm in Washington.
Kelly says courts are upholding trademarks if a company shows a domain holder intends to commercially benefit from their well-established name and thus cause consumer confusion or commercial detriment to the trademark holder.
Even nonprofit organisations have won court cases for trademarked names. In February, the U.S. 2nd Circuit of Appeals upheld Planned Parenthood Federation of America's case against Richard Bucci, a pro-life activist who registered "plannedparenthood.com" and operated a Web site under that domain that identified itself as "The Planned Parenthood Home Page."