February 1, 2001

Subject: Disparaging Domain Names 

Disparaging web sites created by disgruntled employees, consumers or cybersquatters are a rapidly growing issue. These sites often have addresses that begin with a trademark owner’s name and end with “sucks.com”. They are called “sucks.com” sites. Recent cases involving sucks.com sites critical of Wal-Mart, Lucent and Bally Total Fitness show the steps some trademark owners have taken to wrestle these disparaging domain names from their holders. These cases also highlight the contradictory views being expressed by arbitrators, on the one hand, and courts on the other.

There are two systems under which domain name disputes are decided, one private (through arbitration via ICANN’s UDRP) and one public (through litigation in court under the Anticybersquatting Consumer Protection Act and/or the Lanham Act). The interplay between these systems can be unpredictable.

A WIPO arbitrator decided under the ICANN Policy that a number of “sucks.com” domain names critical of Wal-Mart, including “walmartcanadasucks.com,” to be transferred from the registrant to Wal-Mart. 

The “walmartcanadasucks.com” registrant argued that his domain names should not be transferred to Wal-Mart because:

• “walmartcanadasucks.com” could not be “confusingly similar” to the Wal-Mart trademark because no consumer would believe that Wal-Mart was sponsoring a site critical of itself; and
• his “sucks.com” sites were protected free speech because they were critical of Wal-Mart.

The WIPO arbitrator disagreed. In reaching this decision, the arbitrator used only two of several factors courts typically consider when deciding if there is any "likelihood of confusion" between the target's trademark and the sucks.com site. The arbitrator ruled that “walmartcanadasucks.com”and the registrant’s other “sucks.com” sites were confusingly similar to the Wal-Mart trademark. Although the arbitrator agreed that Internet users are not likely to believe Wal-Mart sponsors the websites, he found that search engines were likely to identify the “sucks.com” sites in response to a “Wal-Mart” query. Internet users might then visit the sites, diverting potential customers from Wal-Mart.

In addition, the arbitrator held that the registrant was not engaged in protected free speech by registering his “sucks.com” sites. Because he had offered to act as a paid consultant for Wal-Mart in exchange for an implicit promise to transfer the “sucks.com” sites to Wal-Mart, the arbitrator likened this conduct to “extortion”. The arbitrator found that such a demand for payment is fundamentally inconsistent with the right of free expression.

Companies seeking to shut down sucks.com sites should document any attempts by the domain name owner to be paid in exchange for transfer of the disparaging domain name. The owner's willingness to accept money for giving up the domain name may be an important factor.

At the same time, at least two federal courts have suggested that the transfer of “sucks.com” domain names to trademark holders might not be ordered. In Lucent Technologies, Inc. v. Lucentsucks.com, the federal court stated that a showing that lucentsucks.com is effective parody or a site for critical commentary would seriously undermine the elements of trademark infringement, including the element of a likelihood of confusion. Some argue that the policy behind the Anticybersquatting Consumer Protection Act supports this position because the House Report notes: “comment, criticism, [or] parody.… may be an appropriate indication that the person’s registration or use of the domain name lack[s] … bad faith.” and that the registration should not be transferred or canceled.

Likewise, a federal court examining the domain name “ballysucks.com” found that no reasonable consumer comparing Bally's official web site with the sucks.com site would assume the “sucks.com” site to be affiliated with or sponsored by the trademark owner.

Some companies try to protect themselves by registering disparaging versions of their own domain names, company names and trademarks, to preempt the“sucks.com” sites. The cost of registering domain names is cheap when compared to the expense of an arbitration or litigation. This approach offers only a measure of protection, given the nearly limitless number of disparaging domain names. It is cost-effective, however, to cover the main elements.