When can you use a competitor’s trademark in a domain name?

The recent case of XPO CNW, Inc. v. R+L Carriers, Inc. coming out of a federal court in Michigan tells the interesting story of one company opportunistically using its competitor’s trademark in a domain name to set up an employee recruiting website. The decision sketches out certain circumstances when this practice passes legal muster.


The parties to the dispute are major trucking lines. If you have driven on any highways in the United States, you have no doubt seen 18-wheelers bearing the trademarks of the parties involved in this case. In late 2015, plaintiff XPO acquired Con-Way Freight. Shortly thereafter, defendant R+L launched a website targeting Con-Way’s employees using the domain name conwaylayoff.com. The website included the following statement:

Were you laid off from Con-way? Don’t worry about the XPO Logistics acquisition, when one door closes another opens. R+L Carriers is hiring today….Turn your valuable years of knowledge and experience into a new career with R+L Carriers, which was named a Top National/Multiregional LRL Carrier in Logistics Management magazine’s 2015 Quest for Quality Awards. R+L Carriers launched Conwaylayoff.com to inform those employees that may have been affected by the recent acquisition of Con-way Freight, of similar opportunities that we have where they may be able to put their skills to work.

Plaintiff sued for trademark infringement and for cybersquatting under the Anti-Cybersquatting Consumer Protection Act (“ACPA”). Defendant moved for judgment on the pleadings. The court granted the motion.

The court found there to be no sufficient allegations of trademark infringement because the documents before the court showed there was no likelihood of confusion as to the origin of defendant’s services. The language on the website (quoted above) contradicted plaintiff’s assertions of likely confusion.

On the ACPA claim, the court found there was no evidence that defendant used the domain name with a bad faith intent to profit.

The court compared this situation with the one in the case of Lucas Nursery and Landscaping, Inc. v. Grosse, 359 F.3d 806 (6th Cir. 2004). In Lucas Nursery, there was no evidence that defendant intended to divert consumers from the plaintiff’s online location. Nor was there evidence that defendant ever sought to mislead consumers with regard to the site’s sponsorship. The site explicitly stated that it was established for the purposes of relaying defendant’s experience with the plaintiff’s nursery. Moreover, there was no offer to sell the site to plaintiff, and no other indicators of bad faith existed, such as providing misleading contact information or acquiring batches of additional domain names.

In this case, it was undisputed that defendant set up a web site and used plaintiff’s trademark in the domain name. But this was insufficient to establish that defendant operated in bad faith. Plaintiff did not allege that defendant ever offered to sell the domain name to plaintiff. Nor did it allege that defendant acquired other suspect domain names. Instead, plaintiff offered the court a barebones recital of the statutory language, stating that defendant registered and has used the domain name without plaintiff’s authorization and with bad faith, to profit from plaintiff’s trademark, and that the infringing domain name directed or redirected to a website controlled by defendant, who profited from its use. The court found this to be insufficient to survive the relevant pleading standard. Accordingly the court granted the motion for partial judgment on the pleadings concerning this claim.

XPO CNW, Inc. v. R+L Carriers, Inc., No. 16-10391, 2016 WL 4801283 (E.D. Mich. September 14, 2016)

Photo courtesy of Flickr user Jean-Pierre Magnan under this Creative Commons license.

Evan_BrownAbout the Author: Evan Brown is a Chicago technology and intellectual property attorney. Call Evan at (630) 362-7237, send email to ebrown [at] internetcases.com, or follow him on Twitter @internetcases. Read Evan’s other blog, UDRP Tracker, for information about domain name disputes.

Six things business owners should know about trademarks

#1 – Trademark law protects your brand.


Trademarks are intellectual property. The different categories of intellectual property can be confusing, and as you are identifying and evaluating the different legal issues your business faces, you should seek to understand the role that each category plays. That way you can determine where you should focus your resources to cover the company’s greatest needs. Every business has trademark needs. Trademark law gives exclusive rights to providers of goods and services to use the company’s distinctive marks in connection with the company’s goods and services. A trademark (or a service mark, collectively “marks”) identify the source of goods and services. So while the company is the one that may claim rights in the trademark, it is useful to remember that the ultimate reason for trademark protection is to keep members of the consuming public from being confused about where the goods or services come from.

#2 – Registration is not necessary, but it is a good idea.


At least in the U.S., trademark rights arise from using the mark in commerce. This means a couple of different things. For one, the law will provide your company with exclusive rights to use a certain mark in connection with certain goods or services by virtue of your having used the mark in commerce in connection with those goods or services. But there are limits to this protection — you can only claim that exclusivity in the geographic area in which you’ve actually used the mark. Getting a registration with the United States Patent and Trademark Office helps you in this area. Once the USPTO awards your company a registration certificate for the mark, you are the presumed owner of the exclusive rights to that mark in connection with those goods and services anywhere in the United States, regardless of where you have actually done business. A registration carries with it other benefits as well — you can use the “circle R” designation with the mark, and your registration serves to help give notice to (i.e., warn) other companies who might consider adopting the same or similar mark.

#3 – Descriptive words and phrases generally cannot be trademarks.


Trademark law does not allow a company to claim exclusive rights on words or phrases that merely describe the product or some characteristic of it. This is a common issue that companies face when deciding on a mark for adoption and registration. Descriptive terms are good in that they convey to the consuming public what the product is all about. But descriptive terms are to be avoided in that they are not distinctive. Unless a mark is distinctive, the trademark laws do not recognize it as a trademark or service mark. A mark can be “inherently distinctive” in a number of ways. It may be a made up word (e.g., Kodak), “arbitrary” in that the original meaning of the word does not correspond with the products (e.g., Apple for computers), or “suggestive” – sort of describing the product but requiring a step in imagination (e.g., Beautyrest for mattresses). Or the mark can be a design. Marks can become distinctive over time (usually after 5 years of use). This is known as “acquired distinctiveness.”

#4 – Smart business owners do trademark clearance.


Trademark clearance is the process that a company goes through before actually using or seeking to register a mark. The goal is to become reasonably sure that the use of the proposed mark will not put you at high risk of infringing someone else’s mark. Clearance also helps prevent wasting resources on a trademark application that will get rejected by the USPTO because there is already a similar mark that someone else has applied for or registered. Clearance usually has a couple steps. Many companies have their trademark counsel perform “knockout searches” to identify any obvious risks of conflict. This can be as simple as doing a web search and a search of the USPTO database for marks that look and sound the same and are for similar goods or services. Before going all out on adopting and seeking to register a mark, however, it is a good idea to have trademark counsel perform a comprehensive search and advise on the results. A number of parties offer comprehensive search services. The key question in trademark clearance is likelihood of confusion. A mark owner needs to be reasonably sure that using the proposed mark in commerce will not cause confusion among the confusing public as to the source of the goods or services offered under the mark.

#5 – Trademark fair use is a thing.


In some circumstances a company can use another company’s trademark without much risk of infringement. Generally this falls under the heading of “fair use.” Classic fair use is when one company uses another’s mark in just a descriptive sense. For example, a laundromat may say in its advertising that it is next door to the Burger King. In that case, the use of Burger King is not an infringement. Nominative fair use is when a company uses another mark to describe some characteristic of that mark. A commercial for Toyota, for example, may use the Honda trademark for purposes of comparing the two product lines.

#6 – Use it or lose it. Protect it or lose it.


Trademark rights come from the company’s use of the mark, and there is always a risk that those rights might be abandoned. If a company stops using a mark, a court may find that it has abandoned its rights, and another company would be free to adopt and use the mark. The USPTO requires that documents be filed every few years to ensure that marks that are listed as registered remain in use. If a company does not take appropriate steps to ensure its mark is distinctive in the marketplace, it can similarly be found to have abandoned its rights. So mark owners should do some “policing” to see that there no one else uses a confusingly similar mark on similar products. If the company discovers such use, it must be diligent in seeking to get the other company to stop, through sending a cease and desist letter or through litigation when appropriate.

Food&Beverage photo courtesy schatz under this Creative Commons license.

Coffee sign photo courtesy Aaron Gustafson under this Creative Commons license.

Evan Brown is an attorney in Chicago advising clients on matters dealing with trademarks, copyright, technology, the internet and new media.

Domain name case under ACPA failed because trademark was not distinctive

Federal appeals court holds that plaintiff failed to satisfy all elements of the Anticybersquatting Consumer Protection Act in action against competing airline

The federal Anticybersquatting Consumer Protection Act (ACPA) [15 U.S.C. 1125(d)] is a provision in U.S. law that gives trademark owners a cause of action against one who has wrongfully registered a domain name. In general, the ACPA gives rights to owners of trademarks that are either distinctive or famous at the time the defendant registered the offending domain name.

The Eleventh Circuit Court of Appeals recently affirmed the decision of a lower court that dismissed an ACPA claim, holding that the plaintiff failed to plead that its mark was distinctive at the time of the domain name registration.

Plaintiff sued its competitor, who registered the domain name tropicoceanairways.com. Defendant moved to dismiss, and the lower court granted the motion, finding that plaintiff failed to plead that its mark TROPIC OCEAN AIRWAYS was distinctive and thus protected under the ACPA. On appeal, the Eleventh Circuit affirmed the dismissal, holding that plaintiff’s complaint failed to allege that the mark was either suggestive or had acquired secondary meaning as an indicator of source for plaintiff’s services.

Suggestive marks are considered distinctive because they require “a leap of the imagination to get from the mark to the product.” (The court provided the example of a penguin used as a mark for refrigerators.) In this case, the court found the term “tropic ocean airways” was not suggestive, as it merely “inform[ed] consumers about the service [plaintiff provided]: flying planes across the ocean to tropical locations.”

The court rejected plaintiff’s argument that a pending application at the United States Patent and Trademark Office to register the mark proved that it was suggestive. While a certificate of registration may establish a rebuttable presumption that a mark is distinctive, the court held plaintiff was not entitled to such a presumption here, where the application remained pending. Moreover, the court observed in a footnote that the presumption of distinctiveness will generally only go back to the date the application was filed. In this case, the trademark application was not filed until about a year after the domain name was registered.

As for the argument the mark had acquired secondary meaning, the court found plaintiff’s allegations to be insufficient. The complaint instead made conclusory allegations about secondary meaning that were insufficient to survive a motion to dismiss. The court held that plaintiff failed to allege the nature and extent of its advertising and promotion, and, more importantly, did not allege any facts about the extent to which the public identified the mark with plaintiff’s services.

Tropic Ocean Airways, Inc. v. Floyd, — Fed.Appx. —, 2014 WL 7373625 (11th Cir., Dec. 30, 2014)

Evan Brown is an attorney in Chicago helping clients with domain name, trademark, and other matters involving technology and intellectual property.

What should we do when trademarks offend?

Trademarks are symbols that convey meaning, and ostensibly that meaning is ontologically linked to the purveyor of the goods or services with which the trademark is connected. But those symbols can relate to different ontologies as well, be they freighted with racism/prejudice, religious offense, or plain old poor taste. Take for example the ongoing Redskins dispute, Muslims protesting a sacred symbol on perfume, and the weird attempt by a Malaysian company to get an Australian trademark for MH17.

The law and social advocacy step in to critique these brand owners’ selection of marks. For example, the USPTO found the Redskins marks to so disparage Native Americans that the football team should not enjoy the protections of a federal trademark registration. Ticked-off Sufis protested their holy symbol being used in a concupiscent manner. And we all sort of scratch our heads at why a company would think it should capitalize commercially on the tragedy of an airliner downed in a war zone.

But do the law and social advocacy really have any role to play here? Of course. So perhaps the more critical question is whether those roles should be primary ones. Trademarks exist to regulate commerce. More specifically, trademark law seeks primarily to ensure that a purchaser’s decision making process will be unmessed-with by others seeking to muddy that purchaser’s picture of who is providing the goods or services. If trademarks can have multiple meanings, which of course they sometimes will, shouldn’t we just let the marketplace sort that out? At the same time that trademark law is guiding a purchaser’s decision in an environment hopefully free of confusion, why not just let the sensibilities of the purchasing majority decide what products – some branded with offensive symbols while others not – be sustained?

Evan Brown is an attorney in Chicago advising clients on matters dealing with trademarks, copyright, technology, the internet and new media.

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