Epik recently sold a domain name (www.nighttherapy.com) to a party who held a registered trademark to “Night Therapy.” While not a windfall, the $7,500 selling price was still more than 100X of our cost basis in 2005 when we picked it up on the drop. I asked Cliff Beer, Epik’s General Counsel, to comment on how we handled the situation of responding to a Cease and Desist that we concluded to be without grounds and were prepared to defend vigorously.
Brief Summary of the NightTherapy.com case – as summarized by Cliff Beer
Epik had owned and actively operated a site in a commercial manner stretching back to 2005. The buyer/Trademark-holder registered the Trademark in 2008 and actively used the Trademark in business from that time forward to sell various products. The scope of Epik’s preceding use of the phrase “nighttherapy” included affiliate sales of products within the same category of products to which the TM holder had subsequently registered.
Through the active use of the nighttherapy.com site from 2005 forward, Epik established defendable rights to use of both the domain name itself, and the mark “nighttherapy” as against the subsequent TM registrant. It’s a common misconception that a TM registrant has exclusive and absolute rights to use of the TM in all instances and in all jurisdictions – this is simply not the case.
In most jurisdictions, where one’s use of the mark — embodied within an active domain name, for example — pre-dates the subsequent TM registrant’s use, the original user possesses defendable rights to continued use within the scope of original use, provided such use is reasonably continuous, i.e. not “abandoned”. Refer to the Wooly Bull and Ashton v Harlee cases for more.
For the domain owner to have a solid footing here, he or she needs to have an active site utilizing the mark contained within the domain address in a real and substantive manner, and on a continuous basis. Epik had continuously used the www.nighttherapy.com domain by way of a very basic site providing affiliate product sales – a site for which we typically charge clients $249 to set up.
The TM holder’s attorney recognized this active and continuous use, knew he couldn’t fleece the domain owner with a threatening Demand Letter. Instead of pursuing a fruitless legal path, he simply got on with the business of paying a respectable price for the domain. By contrast, parking would not have been considered a defendable use of the mark here. A domain owner that parks a domain is at much greater risk of losing rights as against a subsequent TM registrant.
Finding a good Domain Attorney
Readers should check with TM laws in effect in their geography and, where necessary, seek advice of counsel knowledgeable in that jurisdiction. I can personally recommend Howard Neu, John Berryhill, Karen Bernstein, plus our very own, Cliff Beer. If you need legal advice and are short on cash, you can pay Cliff in EpikBucks. We’ll be working on the other Domain Attorneys to do the same!