*NOTE: The following is for informational purposes only. Always consult with a legal professional before taking actions that can have legal ramifications.

Buying a domain name can be accompanied by a wide range of feelings like excitement, anticipation and accomplishment. Fear of being sued for $100,000 because you’ve infringed on someone’s trademark is typically not one of these emotions. However, if you’re not careful, this can become a reality all too quickly if you register a trademarked domain name. It really depends on the circumstances.

If you have any doubts whether your next domain name might bring on a wave of strongly worded letters from attorneys, then here’s some essential information to know regarding trademarks and domain names.

What Is Your Intent?

First thing’s first, what is your intent with the domain name that you are registering? This will be a very important factor for any juror, judge or panelist assigned to your case. A claim of trademark infringement will often boil down to whether the registrant of a domain name had good faith or bad faith intent.

Good Faith Intent

Though good faith intent will not automatically win the case for you, it will definitely play an important factor in determining whether you can retain and use your domain name.

If you legitimately had no idea that the name you registered was trademarked then you registered the domain name in good faith. Perhaps the name belongs to a hockey helmet manufacturer and you don’t play sports. Alternatively, maybe you are from Canada and the name is trademarked by a fast food chain in New Zealand. In either scenario, it is reasonable for you to not have known that the domain name infringed on a trademark.

Sometimes you can also have good faith intent even if you know that the name is trademarked. If your main intent is to provide criticism or parody, then that can be considered acceptable use, as long as you are in no way leveraging the trademark in order to make money. It’s also important that no one visiting your site be confused and think that your site was created by the entity that owns the trademark.

It’s important to note that even if you have good faith intent, you can still be held responsible if it was reasonable for you to have found out it was a trademarked domain name. This is why it’s a good idea to do a little research to see whether any name is trademarked before you register its domain.

Bad Faith Intent

If you had bad faith intent when registering your domain then that can be all that’s needed to rule against you. Registering a trademarked domain with bad faith means that you were aware that a name was trademarked and bought it anyway in order to profit in some way off of that domain.

Some examples of bad faith domain registration include:

• Registering trademarked domain with a new top-level domain in order to sell the name back to the trademark owner (e.g. nike.fitness).
• Using a trademarked domain name to trick people into visiting your website in order to make a profit (e.g. microsoftblog.com redirects to your website, which contains ads).
• Creating a website that looks as though it has been created by a trademark owner (e.g. creating hoverdomains.com that looks identical to hover.com to sell domain names through your own service).

What Are the Penalties?

So, you’ve gone ahead and ignored everything mentioned in the last section and registered a trademarked domain name anyway. There can be very serious ramifications for doing this, even if you’re registering the domain on behalf of your company — as the registrant, you will be personally responsible.

If the trademark owner notices and decides to take action, there are several different measures they can take.

Uniform Rapid Suspension (URS)

If your domain name uses a new generic top-level domain (such as .XYZ, .PHOTOGRAPHY or .DESIGN) then URS is the easiest claim for a trademark owner to make. All they need to do is make a claim to a registry and if the website is a very clear trademark infringement then it will go through arbitration, after which it may be taken down for the remainder of the registration period.

Unique Domain Name Dispute Resolution Policy (UDRP)

Also overseen by ICANN, a UDRP claim is more intensive and can have stronger ramifications. An ICANN-approved Dispute Resolution Service Provider will evaluate whether your domain name was registered in good or bad faith and to what degree your website infringes on a trademark. If found guilty, your domain can be cancelled or transferred to the trademark owner.

Anticybersquatting Consumer Protection Act (ACPA)

Though the ACPA is an American law, many other countries have similar laws that might affect you as well. If a trademark owner decides to go through the courts and you are found guilty, you can be subject to up to $100,000 per domain name in statutory damages plus attorney’s fees. You will need to transfer the trademarked domain name as well — though by this point this is probably the least of your concerns.

Key Takeaway: Always Double-Check

Even if you are fairly certain that your domain name will not conflict with any trademarks, always do a bit of research to see whether there is a company out there that has claimed ownership of the name in question. Ten minutes of research might seem like a lot, but it’s well worth the effort when compared to months of legal battles!