A court sitting in equity should take five factors into consideration when determining whether a domain name address should be transferred. First, the court must ask whether the trademark is coined, not in the dictionary and unique. It is important to note that famous does not mean unique. Uniqueness helps a court to simplify the issue by focusing the issue to whether only one company is entitled to the address. This question requires a party seeking a remedy to conduct a search of the entire Internet using search engines, on-line trademark databases, and company name searches. The court should only exercise its equitable powers and transfer the domain name to the party if the search comes up empty. Second, the court must ask whether the domain name owner registered numerous domain names corresponding to coined, unique trademarks. However, even if the defendant has registered numerous similar names, the court should not play a part in selecting which remedy should apply. The purpose for not using this factor to determine whether a remedy should be granted is that such a determination would punish those that have a legitimate claim to the address. Third, the court must ask whether the domain name owner is doing any commercial activity with the domain name. Under the Lanham Act, a plaintiff may only receive a judgment if the person diluting his trademark is conducting commercial activity. Therefore, a court should not issue the transfer of a domain name unless the party using the address is performing commercial activities. Fourth, the court must address whether the domain name owner is actually causing confusion with the trademark owner's goods or services. Again, this factor requires the court to determine whether the trademark is unique. If the court determines that the trademark is unique, the domain address may be transferred. However, if the trademark is found to be non-unique, transfer should not be available. Instead, the court should determine if a cease-and-desist order is proper. Furthermore, the court should take into consideration the presence or absence of actual or likely confusion when addressing the question of whether there is trademark liability. In the absence of confusion, no trademark remedy at all would be appropriate. Fifth, the court must determine whether the trademark owner asserted its challenge promptly after the domain name was registered. A remedy that would otherwise be appropriate should not be granted when the owner of the trademark waited years to enforce its rights. Finally, the equity courts that will confront these issues should remember that the purpose of trademark and unfair competition laws is to protect the public, not merely the trademark owner. As such, parties not before the court may have colorable claims, and a court order to transfer the domain address could affect those rights and lead to subsequent litigation.
Carl Oppedahl, Remedies in Domain Name Lawsuits: How Is a Domain Name Like a Cow?, 15 J. Marshall J. Computer & Info. L. 437 (1997)