Archive for May, 2009

Domain Names: Danger Lurks Below the Surface

You register the perfect domain name, spend a lot of time and money to create a killer web site and open for business on the Internet. Business is good and prospects are even better until one day you receive a certified mail letter from the lawyer for ABC, Inc., notifying you that: (i) your domain name infringes on ABC’s federally registered trademark, (ii) you must immediately cease and desist from using the domain name and all references to the trademark, (iii) you must transfer the offending domain name to ABC, and (iv) pay ABC damages equal to all the profits made by your online business.

Domain names pose a specific challenge not only because of the host of options to choose from (e.g. .com, .net, .org, .biz, .info), but because some domain names are protectable under trademark law while others may infringe on the legitimate rights of trademark owners. It is important to understand that obtaining or using a domain name (1) is not a substitute for securing trademark rights (which is usually accomplished by a combination of actual use of the mark in commerce and federal registration) and (2) does not, in and of itself, create or establish any trademark rights merely by its use as an Internet address. The federal trademark and domain name registration systems exist independently with no cross-checking of the other database prior to registration. Moreover, a trademark owner does not have an absolute right to a domain name consisting of its mark, in whole or in part.

Dangers of Trademark Infringement Involving a Domain Name.

Unfortunately, the above scenario occurs far too often to domain name owners. The cease and desist letter alleging trademark infringement should be taken very seriously. Because trademark owners have a duty to protect their marks and to take appropriate action to prevent others from infringing on their marks, more often than not the trademark owner who sends a cease and desist letter intends to follow it with an infringement lawsuit unless the alleged infringer concedes to the trademark owner’s demands.

If you obtain a domain name that is identical or similar to a trademark or service mark that you do not own, you may be the defendant in a lawsuit brought under the Anticybersquatting Consumer Protection Act or an arbitration procedure brought under the Internet Corporation for Assigned Names and Numbers Uniform Dispute Resolution Policy (“UDRP”). Defending a cybersquatting lawsuit or UDRP arbitration can be very expensive, especially if you lose. The good news, however, is that there are steps you can take before acquiring a domain name to reduce and possibly eliminate the risk of trademark infringement arising from your use of a domain name.

Avoid Acquiring a Domain Name that Infringes a Trademark.

A prospective domain name owner can substantially reduce the risk that a desired domain name will infringe on a trademark by doing proper due diligence before investing the time and money in registering the domain name. You should never register or purchase a domain name without first investigating if the desired domain name is identical or similar to an existing trademark or service mark. The following is a list of the things you can and should do before you acquire a domain name to investigate possible trademark infringement problems.

1. Do a search on several popular search engines (such as Google) to determine if the desired domain name is being used as a business trade name or the name of any goods or services. Review all links that look like they could contain your desired domain name used as a business name (trade name) or the name of goods or services. If you find a business or any goods or services that are identical or similar to your desired domain name, you should probably seek another domain name.

2. Do a search at Whois.net to see if there are any domain names that use domain names that are identical or similar to your desired domain name or that contain identical or similar text. If you find a trade name or any goods or services that use your desired domain name, you should probably seek another domain name.

3. Do a search of the United States Patent & Trademark Office database called the Trademark Electronic Search System (TESS). TESS contains all federally registered trademarks and services marks, all previously filed, but dead or abandoned trademarks and service marks, and all pending applications for trademark registration.

4. Hire a reputable search firm to do a national trademark, service mark, trade name and domain name search for you. A good search by a capable search firm will do a comprehensive search of these four important categories and give you a written report of the results. If the search results show that there are any identical or similar trademarks, service marks, trade names or domain names, you should seriously consider seeking another domain name.

As an alternative, you can hire a trademark attorney to perform steps 1 through 4 for you. Frequently the question of whether a possible domain name will infringe on another person’s trademark is not obvious and requires knowledge and interpretation of trademark law. It is possible that in some cases a desired domain name will not infringe on another trademark or service mark even if steps 1 through 4 all find identical or similar marks. Whether there is an infringement problem usually depends on the facts and circumstances of each potential domain name and an experienced trademark attorney should be able to tell the difference.

There are many issues to consider when considering registering a domain name and possible trademark infringement should be one of the main ones. By taking some preemptive action, you can avoid being the recipient of a cease and desist letter alleging trademark infringement. A relatively small upfront investment could prevent you from having a very large legal bill defending a trademark infringement lawsuit or arbitration proceeding.

__________________________________________________________________

Disclaimer: The information provided in this article is for general information purposes only and should not be construed as specific legal advice. The application of any matter discussed in this article to anyone’s particular situation requires knowledge and analysis of the specific facts involved.

Contact the Portland Attorneys at Peak Law Group for more information.

Government Grant Scams

If you have looked for a government grant for your business, it is very likely you have encountered several websites promising access to “free government grants that you don’t have to pay back” and testimonials from apparent business owners who received tens of thousands of dollars to start a business.  Are these legit?  No.  They are scams.  Here’s how they work:

The company guarantees that you will get a small business grant or your money back.  For a fee of $30 – $50 you get a subscription to a grants database or a grant package with information on how to write a grant proposal and a list of government agencies that provide business grants.

You pay the fee and you may (or may not) get information. However, the government agencies listed do not actually provide grants to help start or expand a business.   In fact, you’ll probably find it difficult getting your money back, and you could lose more than your initial investment if you’ve signed up for a subscription with a credit or debit card.

Economic Stimulus Grants

The recent Economic Stimulus package signed by President Obama has created a whole new class of scam sites offering information on stimulus grants for individuals and small businesses.  These sites are particularly preying on small business owners who are struggling to stay in business and in search for money to keep them afloat.  As tempting as it may be to explore these programs offering free stimulus money, you will be wasting your money by signing up with one of these websites. There is no money in the stimulus package for sending individual checks to small business owners.

Contrary to what you may read, the government does not secretly give away excess budget money to individuals in the form of grants.  There is no secret door with free money behind it.

Grant Information is Free

Government agencies publish grant information on the web, and make it accessible for free.  You do not need to pay anyone to access grant information.  Grant information is easily accessible by visiting agency websites, searching on your favorite web search engine, or using one of these databases:

  • Business.gov’s Loans and Grants Search Engine (http://search.business.gov/startLoans.html) provides legitimate small business loans and grant programs (when available) for which you might qualify.  Currently, this tool contains mostly loan programs, but it is continuously being updated, and relevant grant programs are added when identified.
  • Grants.gov (http://www.grants.gov/ ) is a database of federal grants, most of which are available to non-profits, cooperatives, other government agencies, and academic institutions.  Grants.gov is the one-stop resource for finding grants offered by federal agencies.  Some grant programs do allow eligible for-profit entities to compete for grant money; however, these are highly specialized programs, such as specialty crop research.  However, you won’t find small business grants for starting a business, paying off debt or otherwise help for running your business.

The Bottom Line

The bottom line is that federal and state agencies do not provide small business grants for starting a business, paying off debt, or to cover operating expenses.  However, government agencies do provide guarantees on low-interest loans for these purposes.  You can use the Loans and Grants Search Engine to find programs for which you may be eligible.

For more information on government grants, visit the following resources:

If you have paid money to a grant website and feel you have been the victim of a scam, you can contact the Better Business Bureau (http://www.bbb.org/us/), Oregon Department of Justice Consumer Complaint page (http://www.doj.state.or.us/finfraud/index.shtml), or the Federal Trade Commission Consumer Complaint page (https://www.ftccomplaintassistant.gov ).

Disclaimer: The information provided in this article is for general information purposes only and should not be construed as specific legal advice.  The application of any matter discussed in this article to anyone’s particular situation requires knowledge and analysis of the specific facts involved.

Contact the Portland Attorneys at Peak Law Group for more information.