I sometimes hear from young entrepreneurs, “I should be safe because I registered my domain name before they started using their mark, right?” If they are referring to a domain name dispute, they may be right. But if they are referring to a trademark dispute, they may not. With trademarks, priority relates to use. With domain names, priority often relates to the issue of good or bad faith.

Businesses should understand that a domain name is not coextensive with a trademark. It is true that a domain name can be a trademark and vice-versa, but one does not equal the other. The following hypothetical is illustrative.
Example: Business A registers a domain name, such as BIGBUDDY.COM. Business A may have intended to use BIG BUDDY as a trademark for ice cream, but the idea sits dormant and Business A does not get around to using the mark on ice cream sales for several years. Two months after Business A registers BIGBUDDY.COM, Business B registers BIGBUDDY.NET. Business B immediately starts using the BIG BUDDY mark for the sale of ice cream. Business A’s first use of the BIG BUDDY mark does not occur for a year or two after Business B’s first use.

In the above example, Business A’s domain name registration prior to Business B’s domain name registration may not work as a defense against a trademark infringement law suit by Business B. The reason is that registration of a domain name does not constitute trademark usage. Since Business B began actual trademark use before Business A, even though Business A registered the domain name first, Business B will have senior trademark rights and will likely be able to enjoin Business A from using the same mark for the same products.

This does not necessarily mean that Business B can enjoin Business A from using the domain name. Business A may have a legitimate use for the domain name other than for the sale of ice cream. Thus, under the same facts in a domain name dispute brought by Business B against Business A, priority would be a legitimate defense. The reason is that domain name disputes, while generally involving trademark issues, involve more than demonstrating senior trademark rights and a likelihood of confusion. In a UDRP proceeding, the Uniform Domain Name Dispute Resolution Policy requires a complainant to demonstrate:
“(i) [its] domain name is identical or confusingly similar to a trademark or service mark in which the complainant has rights; and
(ii) [it has] no rights or legitimate interests in respect of the domain name; and
(iii) [its] domain name has been registered and is being used in bad faith.”

You will note that the third prong requiring a showing of bad faith protects Business A in the above example because of priority. The reason is that Business A, having registered the domain name prior to Business B acquiring rights in the BIG BUDDY trademark, could not have registered the domain name in bad faith; Business A had no knowledge of Business B’s rights at the time of registration.

The bad faith element protects good faith registrants from losing valuable marks simply because they are identical to another’s trademark. This makes sense because a trademark’s rights are tied to particular goods or services with which the marks are used. A domain name, although identical to a trademark, may be used for many different unrelated goods, services, or purposes.