The conflicts arising over Internet addresses generally fall within four categories: trademarks as second-level domains; second-level domains that are similar to trademarks; trademarks as third-level domain/machine names; and trademarks as userIDs. When confronted with the four categories, a court will generally analyze the problem by looking at the likelihood of confusion, applying the dilution statutes, and determining if the trademark has been blurred or tarnished. The likelihood of confusion analysis looks at: the degree of similarity between the marks in appearance and suggestion; the similarity of the product or services; the area and manner of concurrent use; the degree of care likely to be exercised by consumers; the strength of the complainant’s mark; actual confusion; and intent of the part of the alleged infringer to palm-off his products as those of another. The dilution statutes require the use of mark to be commercial and that there is a likelihood of actual confusion. Next, the court will determine if the trademark has been diluted by tarnishment, such as whether a famous mark has been linked to a poor quality or unwholesome product, or other wise displayed in a derogatory manner. Finally, the court will look to see if the trademark has been diluted by blurring, which is the whittling away of the value and selling power of a mark by its unauthorized use. Conflicts over the first category, trademarks as second-level domains, generally arise because domain names have value. Value arises out of various organizations that wish to use the Internet to conduct business or advertise their business. The organizations seek names that are familiar or easy for their customers to remember. In cases such as these, courts have held that merely registering a name in order to reserve a right to the name is not sufficient use in commerce. The mark must be applied to an identifiable product with an intent to distribute that product. The second category, second-level domains that are similar to trademarks, generally occur when a party seeks to emulate a trademark holder. For example, a party parodied Microsoft by registering the domain name www.micr0soft.com. The general rule is that if you consciously choose a mark that is already establish in the marketplace, that choice supports a finding that you are intending to trade on the senior mark’s name-value. As a result, a likelihood of confusion is produced. A court will find that a parody of a mark does not tarnish the mark if the public associates the two marks only for the purpose of the parody and does not associate the two sources of the products. Generally, confusion of the two sources produces tarnishment. The third category, trademarks as third-level domain, arise because large organizations have many machines connected to the Internet, all addressed under their second-level domain name. For example, the University of Iowa Student Computer Association names its machines whip.isca.uiowa.edu, chop.isca.uiowa.edu, and grind.isca.uiowa.edu. Conflicts arise in this category when the organization uses a trademark to designate a machine. In cases such as these, the likelihood of consumer confusion drops dramatically, and the court will inquire into whether another party’s use of the mark diminishes the power of the mark to identify the goods and services of the mark’s owner. The last category, trademarks as userIDs, occurs when a party uses a trademark in an area other than the domain name. For example, a party may use a trademark as their UserID and thereby have an email address such as Sony@nexchi.com. The court will apply the same analysis as the third category. The court will look to see how the account is used and the manner of the account’s use will indicate whether confusion is likely to result.
David J. Loundy, A Primer on Trademark Law and Internet Addresses, 15 J. Marshall J. Computer & Info. L. 465 (1997)