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Domain Name Disputes

With the proliferation of commercial websites, disputes over "domain names" were bound to arise. Prior to 1999, it was common for "web-pirates" to kidnap the trademarked names of famous companies and famous people by registering their names as domain names on the internet, and then trying to sell them for millions of dollars. Domain names are registered on a "first come/first served" basis.

However, in 1999, Congress passed the Anti-Cybersquatting Act, which prohibits this conduct and authorizes private lawsuits against violators for monetary damages. The Act, however, creates a "good faith" exception for domain names that are a derivative of a person's personal name.

For example, this Firm represented a British Columbia Corporation owned by a gentleman named Don Swindells. Swindells operated a rental company called "dell-leasing.com." Dell Computer Corp. sued Mr. Swindells in Federal Court in Austin, Texas for violation of the new Anti-Cybersquatting Act.

We argued that Mr. Swindells was acting in good faith because his domain name "dell-leasing.com" was a derivation of his own personal name "Swindells" and because he had never tried to extort money out of Dell Computer Corp. We also argued that the Federal Court sitting in Austin, Texas could not exercise "personal jurisdiction" over Mr. Swindells or his company because he had never done business in Texas, had never solicited clients in Texas, and, in fact, had never even been to Texas.

The research we conducted revealed that there were two bodies of case law emerging on this issue. The courts have been finding a distinction between "active" websites and "passive" websites.

An "active" website is one in which the viewer is invited to interact with the owners of the website by purachasing products or services. A "passive" website is one which merely acts as a computerized brochure, with which the viewer cannot interact. Courts are more likely to exercise "personal jurisdiction" over a foreign website if it is an "active" website because it is interacting with citizens of the state where the court sits. Courts are less likely to exercise "personal jurisdiction" over "passive" websites because there is no interaction with citizens of the state where the court sits.

Ultimately, because my client operated only a "passive" website, the Court dismissed the case for lack of "personal jurisdiction."

If you have encountered a domain name dispute, contact us at:

(512) 732-0111

info@teknolaw.com