Doing business on the Web doesn't spare you from many of the same laws and customs that govern businesses in the physical world. You must pay especially close attention to trademark law, which governs disputes between business owners over the names, logos, and trademarks that identify their goods and services in the marketplace. Applied to Web businesses, trademark law determines when the use of a particular Internet domain name infringes someone else's trademark.

The two most fundamental rules of trademark law are:

  • You can't use a name, logo, or domain name that might confuse customers about the source of your goods or services.
  • You can't use a name, logo, or domain name that invokes a famous product or service, even if customers wouldn't be confused.

And effective November 29, 1999, you can't use a domain name that is confusingly similar to an existing distinctive or famous mark for the purpose of selling the name back to the mark's owner.

Opening Your Doors to the World
Until several years ago, only companies doing business on a national or regional level needed to be concerned about trademark law. A local business could reasonably expect its marketing activities to be limited to a neighborhood, city, or county. As long as the name used by the business to identify itself in the marketplace didn't seriously conflict with names used by other local businesses, there was little likelihood of customer confusion, thus little likelihood of legal conflict.

Today, the core concept of " local" has all but disappeared for many types of businesses. When you create a Web page, you enter a commercial realm that is in one stroke local, national, and international. Local customers can search you out, but so can anyone anywhere in the U.S. or the world who has a computer and an Internet connection. Suddenly, you must pay attention to how your business name -- or the names of products you are offering -- fit within the vast sea of names that is the new world marketplace.

What's in a Name?
The first trademark issue to arise when you create a Web page has to do with the name you give your Web site -- called your Internet domain name. It's the unique part of your Internet address (universal resource locator, or URL). The Nolo.com URL, for instance, is http://www.nolo.com. The last part -- nolo.com -- is the domain name. Naturally, most businesses want the domain name for their Web site to be the same as their business name so that customers can easily find their sites.

Here's where you can inadvertently court trademark trouble. If you choose a domain name that is the same or similar to a business name that is already in use as a trademark anywhere in the country (in physical or virtual space), you could find yourself in a trademark infringement dispute. If you are offering goods or services on your Web site, you could even be sued.

The entity responsible for assigning domain names does not check to see if a requested domain name violates an existing trademark. It is concerned only with whether the name is already taken as a domain name. In other words, being assigned the domain name you request says nothing about whether it will conflict with an existing trademark. If it is the same or similar to a famous mark or is likely to cause customers to confuse your site with the business or products carrying the existing mark, you could be in violation of trademark law.

If you do pick a domain name that creates a trademark conflict, you will most likely lose the name. Given the energy that goes into building domain name recognition, this could be a major blow to your business. Here's what could happen:

  • If your domain name prevents the owner of a registered trademark from using its mark as its domain name, the owner of the registered mark may be able to cause your domain name to be deregistered. If that happens, you can't use it anymore.
  • If your domain name is the same as or similar to an existing famous mark, the mark's owner may file a lawsuit preventing any further use of your domain name, even if customers wouldn't likely be confused. For example, if you decide to call your health food Web site foramazons.com, the real Amazon.com could probably force you to stop using the name, simply because it calls Amazon.com to mind.
  • If your domain name conflicts with an existing mark and will likely lead to customer confusion between your business or products and those offered by the mark's owner, a court may force you to stop using the name. And if your infringement is judged to be willful, you might be ordered to compensate the mark's owner for any losses and pay thousands of dollars in statutory damages.
  • If your domain name is the name of a living person and you picked it with the idea of selling it back to that person -- for instance, you register Sammy_Sosa.com with the intention of selling the name back to that baseball player -- you can be forced to surrender the name and pay attorney's fees.

Avoiding Trouble
Before choosing a domain name, it is wise to conduct what's known as a trademark search. A trademark search hunts for any trademarks, federally registered or not, that conflict with your proposed domain name.

You can do your own trademark search at the U.S. Patent and Trademark Office's Web site, www.uspto.gov. Or you can pay someone to do it for you. One good trademark searcher is the Sunnyvale Center on Innovation, Invention, and Ideas at www.sci3.com.

If possible conflicts turn up, use a variant of the golden rule. Do not use an existing mark as your domain name if use of the mark would seriously tick you off if you were the mark's owner.

Copyright © 2000 Nolo.com Inc.