Domain Tasting At Your Trademark's Expense

As a trademark owner, you have spent a considerable amount of time and money in promoting and creating value in your trademark. The value a trademark develops over time, commonly referred to as "goodwill," is difficult to quantify. However, as a trademark owner you are certain that the years of sweat equity have resulted in a trademark that stands for quality and which distinctly identify your company as the source of those goods or services.

However, the popularity of the Internet over the past decade has proven to be the most challenging for trademark owners. Most recently, the biggest challenge has come from the practice of Domain Tasting. Domain Tasting is a practice conducted by some which, although legal, allows domain registrars to profit from pay-per-click advertising. It works like this: Domain Tasters purchase thousands of Internet domain names and fill them with advertisements which are provided by Google and Yahoo! An unwitting Internet surfer will find one of these domain names and once on that particular website they will click on a particular advertisement. Each time the Internet surfer clicks on one of these advertisements, the Domain Taster earns revenue. What is the problem with this? Sounds like a great way to make money, right?

There are essentially two problems for a legitimate trademark owner. For instance, let's say that you own the trademark "XEROX". You have for the past several decades spent millions of dollars developing that trademark. As such, it stands to reason that you should benefit financially from creating and maintaining that trademark's goodwill. A Domain Taster may purchase www.zerox.com or www.xeroxx.com and fill it with advertisements. An Internet surfer legitimately searching for copiers may mistakenly misspell XEROX and in fact reach the www.xeroxx.com website. Once there, the web surfer will find many advertisements for a host of copiers and printers from various manufacturers. The web surfer may then decide to click on an advertisement for MINOLTA or even CANON. Each click will in turn result in the Domain Taster receiving revenues from the search engines that provide the advertisements to be displayed. While each click may not result in a lot of revenue, the clicks are multiplied by the thousands. Okay, by now you should begin to start feeling that this practice, while legal, is a little unsavory. Well guess what? It gets worse.

Due to loopholes in the policies that govern the registration of domain names. About six years ago, the main organization that oversees and regulates domain names, ICANN, created a policy of allowing domain registrars to return registered domain names for a full refund within a five day grace period. This essentially opened the door for Domain Tasters to purchase thousands of domain names at about $8.00 each, "taste" the domain's traffic capabilities (click through to advertisements), and then return the domain names for a full refund. The Domain Tasters make 100% profit. Their sole business model is to exploit the goodwill of legitimate trademark owners.

There is a handful of opponents of this practice that are currently attempting to do away with the grace period and to attack companies that solely operate as Domain Tasters. How the practice will change in the future remains to be seen.

Frank Herrera
Trademark Headquarters

Trademarks In Post-Castro Cuba

Since Trademark Headquarters is located in Miami, Florida, it should come as no suprise that the issue of trademarks in post-Castro Cuba is often discussed.

While it is impossible to predict with any certainty what a post-Castro Cuba will be like, it is likely to be more open for capitalistic opportunities. South Florida's proximity to Cuba, as well as South Florida's close cultural and linguistic ties to Cuba, will surely make it a gateway for any company seeking to do business in post-Castro Cuba. If your company has a product or service that will be marketed and sold in post-Castro Cuba, it follows that your company would want to insure that any trademarks used on such goods or services will be protected there. How can you be certain that a post-Castro Cuba will not be a safe haven for counterfeiters or otherwise a country which will fail to protect legitimate trademark owners? At this moment in history, you can not be certain. However, a post-Castro Cuba will certainly require a large injection of imported US goods and services if it will operate as a modern nation. Decades of shortages have left Cuba in need of nearly ever type of good or service available. Those goods and services will no doubt come from United States entities eager to expand their market.

Unlike the United States, Cuba's trademark history is fragmented. Most recently, Cuba has maintained a trademark office which allows for a registration process for the protection of trademarks. Through certain international treaties, in theory and in some practice, some United States entities have registered their trademarks in Cuba (although they can make no legitimate use of same due to the embargo). That process, as controversial as it is, is in place and may provide the framework for a post-Castro Cuban trademark office and trademark enforcement legislation.

Again, how the legal framework will settle in relation to trademark registration and enforcement is an open question. Currently, however, some tips may assist United States entities that are currently planning on offering goods or services in post-Castro Cuba.

For instance, the first basic step for any entity wishing to sell goods or services in post-Castro Cuba would be to first register the subject trademark in the United States. A United States trademark registration is relatively inexpensive and, once obtained, is extremely valuable. Obtaining a United States trademark registration may form the basis to insuring that use of the trademark in post-Castro Cuba would arrive in an aura of legitimacy. For instance, should a trademark dispute arise between a United States entity using a trademark in post-Castro Cuba with another entity in Cuba, then the first to use the trademark in the United States may have a leg up on the junior user of the trademark.

This may take shape as the current trademark relationship between the United States and Puerto Rico. While I do not suggest that post-Castro Cuba will be another Puerto Rico, I do suggest that the trademark registration and enforcement framework currently in use between the United States and Puerto Rico, may be the case with post-Castro Cuba. While United States and Puerto Rico each maintain their own trademark laws and registration offices, generally a United States trademark registration is enforceable in Puerto Rico. This may be a likely outcome of trademark policy.

Once a United States trademark registration is obtained, then the trademark owner should take the additional step of registering the trademark with United States Customs. This will ensure that counterfeit products (originating outside of the United States) do not make their way in the United States from Cuba. Its close proximity to the United States may make it a hot gateway for products of dubious origin.

While it is not currently the case, it is possible that a post-Castro Cuba will develop a province by province trademark registration process similar to that in place in the United States where each of the fifty states has its own trademark registration office and corresponding laws. If this develops, then steps should be taken to register the subject trademark in each Cuban province in which the trademark products will be sold or offered for sale. This should be done in addition to the Cuban national trademark registration. While most Cuban provinces are currently sparcely populated with little or no industry, there is a very good likelihood that some of these provinces may experience exponential growth in a post-Castro business environment.

As in the United States, trademark vigilance is very important in order to discover unauthorized uses of your trademark(s). In the United States a trademark watch program is normally adopted to alert the trademark owner of any counterfeit uses of the trademark or of any uses of a trademark which may confusingly similar to the trademark. This is necessary to maintain the strength of the trademark, essentially to avoid dilution. While I am not currently aware of any such program in Cuba, it stands to reason that such a program will be developed in a post-Castro Cuba. As such, any United States trademark owner seeking to do business in post-Castro Cuba should keep a vigilance program in mind.

Before adopting and using a trademark in Cuba, it may helpful to obtain comments as to the meaning of the proposed trademark to Spanish speakers, namely, Cubans. Cultural differences in language may prove costly should you select a name that is offensive to your proposed post-Castro Cuba market. Moreover, most governmental trademark registration offices prohibit the registration of trademarks that are offensive. As such, time and money may be saved by simply seeking an opinion as to the proposed trademark's meaning.

More information relating to trademark use in post-Castro Cuba will follow.

-Frank Herrera
Trademark Headquarters