[Congressional Bills 106th Congress]
[From the U.S. Government Publishing Office]
[S. 1255 Reported in Senate (RS)]





                                                       Calendar No. 240

106th CONGRESS

  1st Session

                                S. 1255

_______________________________________________________________________

                                 A BILL

   To protect consumers and promote electronic commerce by amending 
certain trademark infringement, dilution, and counterfeiting laws, and 
                          for other purposes.

_______________________________________________________________________

                             July 29, 1999

                       Reported with an amendment





                                                       Calendar No. 240
106th CONGRESS
  1st Session
                                S. 1255

   To protect consumers and promote electronic commerce by amending 
certain trademark infringement, dilution, and counterfeiting laws, and 
                          for other purposes.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                             June 21, 1999

 Mr. Abraham (for himself, Mr. Torricelli, Mr. Hatch, Mr. McCain, and 
  Mr. Breaux) introduced the following bill; which was read twice and 
               referred to the Committee on the Judiciary

                             July 29, 1999

                Reported by Mr. Hatch, with an amendment
 [Strike out all after the enacting clause and insert the part printed 
                               in italic]

_______________________________________________________________________

                                 A BILL


 
   To protect consumers and promote electronic commerce by amending 
certain trademark infringement, dilution, and counterfeiting laws, and 
                          for other purposes.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

<DELETED>SECTION 1. SHORT TITLE.</DELETED>

<DELETED>    This Act may be cited as the ``Anticybersquatting Consumer 
Protection Act''.</DELETED>

<DELETED>SEC. 2. FINDINGS.</DELETED>

<DELETED>    Congress finds that the unauthorized registration or use 
of trademarks as Internet domain names or other identifiers of online 
locations (commonly known as ``cybersquatting'')--</DELETED>
        <DELETED>    (1) results in consumer fraud and public confusion 
        as to the true source or sponsorship of products and 
        services;</DELETED>
        <DELETED>    (2) impairs electronic commerce, which is 
        important to the economy of the United States; and</DELETED>
        <DELETED>    (3) deprives owners of trademarks of substantial 
        revenues and consumer goodwill.</DELETED>

<DELETED>SEC. 3. TRADEMARK REMEDIES.</DELETED>

<DELETED>    (a) Recovery for Violation of Rights.--Section 35 of the 
Act entitled ``An Act to provide for the registration and protection of 
trade-marks used in commerce, to carry out the provisions of certain 
international conventions, and for other purposes'', approved July 5, 
1946, (commonly referred to as the ``Trademark Act of 1946'') (15 
U.S.C. 1117) is amended by adding at the end the following:</DELETED>
<DELETED>    ``(d)(1) In this subsection, the term `Internet' has the 
meaning given that term in section 230(f)(1) of the Communications Act 
of 1934 (47 U.S.C. 230(f)(1)).</DELETED>
<DELETED>    ``(2)(A) In a case involving the registration or use of an 
identifier described in subparagraph (B), the plaintiff may elect, at 
any time before final judgment is rendered by the trial court, to 
recover, instead of actual damages and profits under subsection (a)--
</DELETED>
        <DELETED>    ``(i) an award of statutory damages in the amount 
        of--</DELETED>
                <DELETED>    ``(I) not less than $1,000 or more than 
                $100,000 per trademark per identifier, as the court 
                considers just; or</DELETED>
                <DELETED>    ``(II) if the court finds that the 
                registration or use of the registered trademark as an 
                identifier was willful, not less than $3,000 or more 
                than $300,000 per trademark per identifier, as the 
                court considers just; and</DELETED>
        <DELETED>    ``(ii) full costs and reasonable attorney's 
        fees.</DELETED>
<DELETED>    ``(B) An identifier referred to in subparagraph (A) is an 
Internet domain name or other identifier of an online location that 
is--</DELETED>
        <DELETED>    ``(i) the trademark of a person or entity other 
        than the person or entity registering or using the identifier; 
        or</DELETED>
        <DELETED>    ``(ii) sufficiently similar to a trademark of a 
        person or entity other than the person or entity registering or 
        using the identifier as to be likely to--</DELETED>
                <DELETED>    ``(I) cause confusion or 
                mistake;</DELETED>
                <DELETED>    ``(II) deceive; or</DELETED>
                <DELETED>    ``(III) cause dilution of the distinctive 
                quality of a famous trademark.''.</DELETED>
<DELETED>    (b) Remedies for Dilution of Famous Marks.--Section 
43(c)(2) of the Act entitled ``An Act to provide for the registration 
and protection of trade-marks used in commerce, to carry out the 
provisions of certain international conventions, and for other 
purposes'', approved July 5, 1946, (commonly referred to as the 
``Trademark Act of 1946'') (15 U.S.C. 1125(c)(2)) is amended by 
striking ``35(a)'' and inserting ``35 (a) and (d)''.</DELETED>

<DELETED>SEC. 4. CRIMINAL USE OF COUNTERFEIT TRADEMARK.</DELETED>

<DELETED>    (a) In General.--Section 2320(a) of title 18, United 
States Code, is amended--</DELETED>
        <DELETED>    (1) by inserting ``(1)'' after ``(a)'';</DELETED>
        <DELETED>    (2) by striking ``section that occurs'' and 
        inserting ``paragraph that occurs''; and</DELETED>
        <DELETED>    (3) by adding at the end the following:</DELETED>
<DELETED>    ``(2)(A) In this paragraph, the term `Internet' has the 
meaning given that term in section 230(f)(1) of the Communications Act 
of 1934 (47 U.S.C. 230(f)(1)).</DELETED>
<DELETED>    ``(B)(i) Except as provided in clause (ii), whoever 
knowingly and fraudulently or in bad faith registers or uses an 
identifier described in subparagraph (C) shall be guilty of a Class B 
misdemeanor.</DELETED>
<DELETED>    ``(ii) In the case of an offense by a person under this 
paragraph that occurs after that person is convicted of another offense 
under this section, that person shall be guilty of a Class E 
felony.</DELETED>
<DELETED>    ``(C) An identifier referred to in subparagraph (B) is an 
Internet domain name or other identifier of an online location that 
is--</DELETED>
        <DELETED>    ``(i) the trademark of a person or entity other 
        than the person or entity registering or using the identifier; 
        or</DELETED>
        <DELETED>    ``(ii) sufficiently similar to a trademark of a 
        person or entity other than the person or entity registering or 
        using the identifier as to be likely to--</DELETED>
                <DELETED>    ``(I) cause confusion or 
                mistake;</DELETED>
                <DELETED>    ``(II) deceive; or</DELETED>
                <DELETED>    ``(III) cause dilution of the distinctive 
                quality of a famous trademark.</DELETED>
<DELETED>    ``(D)(i) For the purposes of a prosecution under this 
paragraph, if all of the conditions described in clause (ii) apply to 
the registration or use of an identifier described in subparagraph (C) 
by a defendant, those conditions shall constitute prima facie evidence 
that the registration or use was fraudulent or in bad faith.</DELETED>
<DELETED>    ``(ii) The conditions referred to in clause (i) are as 
follows:</DELETED>
        <DELETED>    ``(I) The defendant registered or used an 
        identifier described in subparagraph (C)--</DELETED>
                <DELETED>    ``(aa) with intent to cause confusion or 
                mistake, deceive, or cause dilution of the distinctive 
                quality of a famous trademark; or</DELETED>
                <DELETED>    ``(bb) with the intention of diverting 
                consumers from the domain or other online location of 
                the person or entity who is the owner of a trademark 
                described in subparagraph (C) to the domain or other 
                online location of the defendant.</DELETED>
        <DELETED>    ``(II) The defendant--</DELETED>
                <DELETED>    ``(aa) provided false information in the 
                defendant's application to register the identifier; 
                or</DELETED>
                <DELETED>    ``(bb) offered to transfer the 
                registration of the identifier to the trademark owner 
                or another person or entity in consideration for any 
                thing of value.</DELETED>
        <DELETED>    ``(III) The identifier is not--</DELETED>
                <DELETED>    ``(aa) the defendant's legal first name or 
                surname; or</DELETED>
                <DELETED>    ``(bb) a trademark of the defendant used 
                in legitimate commerce before the earlier of the first 
                use of the registered trademark referred to in 
                subparagraph (C) or the effective date of the 
                registration of that trademark.</DELETED>
<DELETED>    ``(iii) The application of this subparagraph shall not be 
exclusive. Nothing in this subparagraph may be construed to limit the 
applicability of subparagraph (B).''.</DELETED>
<DELETED>    (b) Sentencing Guidelines.--</DELETED>
        <DELETED>    (1) In general.--Pursuant to the authority granted 
        to the United States Sentencing Commission under section 994(p) 
        of title 28, United States Code, the United States Sentencing 
        Commission shall--</DELETED>
                <DELETED>    (A) review the Federal sentencing 
                guidelines for crimes against intellectual property 
                (including offenses under section 2320 of title 18, 
                United States Code); and</DELETED>
                <DELETED>    (B) promulgate such amendments to the 
                Federal Sentencing Guidelines as are necessary to 
                ensure that the applicable sentence for a defendant 
                convicted of a crime against intellectual property is 
                sufficiently stringent to deter such a crime.</DELETED>
        <DELETED>    (2) Factors for consideration.--In carrying out 
        this subsection, the United States Sentencing Commission 
        shall--</DELETED>
                <DELETED>    (A) take into account the findings under 
                section 2; and</DELETED>
                <DELETED>    (B) ensure that the amendments promulgated 
                under paragraph (1)(B) adequately provide for 
                sentencing for crimes described in paragraph (2) of 
                section 2320(a) of title 18, United States Code, as 
                added by subsection (a).</DELETED>

<DELETED>SEC. 5. LIMITATION OF LIABILITY.</DELETED>

<DELETED>    Section 39 of the Act entitled ``An Act to provide for the 
registration and protection of trade-marks used in commerce, to carry 
out the provisions of certain international conventions, and for other 
purposes'', approved July 5, 1946, (commonly referred to as the 
``Trademark Act of 1946'') (15 U.S.C. 1121) is amended by adding at the 
end the following:</DELETED>
<DELETED>    ``(c)(1) In this subsection, the term `Internet' has the 
meaning given that term in section 230(f)(1) of the Communications Act 
of 1934 (47 U.S.C. 230(f)(1)).</DELETED>
<DELETED>    ``(2)(A) An Internet service provider, domain name 
registrar, or registry described in subparagraph (B) shall not be 
liable for monetary relief to any person for a removal or transfer 
described in that subparagraph, without regard to whether the domain 
name or other identifier is ultimately determined to be infringing or 
dilutive.</DELETED>
<DELETED>    ``(B) An Internet service provider, domain name registrar, 
or registry referred to in subparagraph (A) is a provider, registrar, 
or registry that, upon receipt of a written notice from the owner of a 
trademark registered in the Patent and Trademark Office, removes from 
domain name service (DNS) service or registration, or transfers to the 
trademark owner, an Internet domain name or other identifier of an 
online location alleged to be infringing or dilutive, in compliance 
with--</DELETED>
        <DELETED>    ``(i) a court order; or</DELETED>
        <DELETED>    ``(ii) the reasonable implementation of a policy 
        prohibiting the unauthorized registration or use of another's 
        registered trademark as an Internet domain name or other 
        identifier of an online location.''.</DELETED>

SECTION 1. SHORT TITLE; REFERENCES.

    (a) Short Title.--This Act may be cited as the ``Anticybersquatting 
Consumer Protection Act.''.
    (b) References to the Trademark Act of 1946.--Any reference in this 
Act to the Trademark Act of 1946 shall be a reference to the Act 
entitled ``An Act to provide for the registration and protection of 
trade-marks used in commerce, to carry out the provisions of certain 
international conventions, and for other purposes'', approved July 5, 
1946 (15 U.S.C. 1051 et seq.).

SEC. 2. FINDINGS.

    Congress finds the following:
            (1) The registration, trafficking in, or use of a domain 
        name that is identical to, confusingly similar to, or dilutive 
        of a trademark or service mark of another that is distinctive 
        at the time of registration of the domain name, without regard 
        to the goods or services of the parties, with the bad-faith 
        intent to profit from the goodwill of another's mark (commonly 
        referred to as ``cyberpiracy'' and ``cybersquatting'')--
                    (A) results in consumer fraud and public confusion 
                as to the true source or sponsorship of goods and 
                services;
                    (B) impairs electronic commerce, which is important 
                to interstate commerce and the United States economy;
                    (C) deprives legitimate trademark owners of 
                substantial revenues and consumer goodwill; and
                    (D) places unreasonable, intolerable, and 
                overwhelming burdens on trademark owners in protecting 
                their valuable trademarks.
            (2) Amendments to the Trademark Act of 1946 would clarify 
        the rights of a trademark owner to provide for adequate 
        remedies and to deter cyberpiracy and cybersquatting.

SEC. 3. CYBERPIRACY PREVENTION.

    (a) In General.--Section 43 of the Trademark Act of 1946 (15 U.S.C. 
1125) is amended by inserting at the end the following:
    ``(d)(1)(A) Any person who, with bad-faith intent to profit from 
the goodwill of a trademark or service mark of another, registers, 
traffics in, or uses a domain name that is identical to, confusingly 
similar to, or dilutive of such trademark or service mark, without 
regard to the goods or services of the parties, shall be liable in a 
civil action by the owner of the mark, if the mark is distinctive at 
the time of the registration of the domain name.
    ``(B) In determining whether there is a bad-faith intent described 
under subparagraph (A), a court may consider factors such as, but not 
limited to--
            ``(i) the trademark or other intellectual property rights 
        of the person, if any, in the domain name;
            ``(ii) the extent to which the domain name consists of the 
        legal name of the person or a name that is otherwise commonly 
        used to identify that person;
            ``(iii) the person's prior use, if any, of the domain name 
        in connection with the bona fide offering of any goods or 
        services;
            ``(iv) the person's legitimate noncommercial or fair use of 
        the mark in a site accessible under the domain name;
            ``(v) the person's intent to divert consumers from the mark 
        owner's online location to a site accessible under the domain 
        name that could harm the goodwill represented by the mark, 
        either for commercial gain or with the intent to tarnish or 
        disparage the mark, by creating a likelihood of confusion as to 
        the source, sponsorship, affiliation, or endorsement of the 
        site;
            ``(vi) the person's offer to transfer, sell, or otherwise 
        assign the domain name to the mark owner or any third party for 
        substantial consideration without having used, or having an 
        intent to use, the domain name in the bona fide offering of any 
        goods or services;
            ``(vii) the person's intentional provision of material and 
        misleading false contact information when  applying for the 
registration of the domain name; and
            ``(viii) the person's registration or acquisition of 
        multiple domain names which are identical to, confusingly 
        similar to, or dilutive of trademarks or service marks of 
        others that are distinctive at the time of registration of such 
        domain names, without regard to the goods or services of such 
        persons.
    ``(C) In any civil action involving the registration, trafficking, 
or use of a domain name under this paragraph, a court may order the 
forfeiture or cancellation of the domain name or the transfer of the 
domain name to the owner of the mark.
    ``(2)(A) The owner of a mark may file an in rem civil action 
against a domain name if--
            ``(i) the domain name violates any right of the registrant 
        of a mark registered in the Patent and Trademark Office, or 
        section 43 (a) or (c); and
            ``(ii) the court finds that the owner has demonstrated due 
        diligence and was not able to find a person who would have been 
        a defendant in a civil action under paragraph (1).
    ``(B) The remedies of an in rem action under this paragraph shall 
be limited to a court order for the forfeiture or cancellation of the 
domain name or the transfer of the domain name to the owner of the 
mark.''.
    (b) Additional Civil Action and Remedy.--The civil action 
established under section 43(d)(1) of the Trademark Act of 1946 (as 
added by this section) and any remedy available under such action shall 
be in addition to any other civil action or remedy otherwise 
applicable.

SEC. 4. DAMAGES AND REMEDIES.

    (a) Remedies In Cases of Domain Name Piracy.--
            (1) Injunctions.--Section 34(a) of the Trademark Act of 
        1946 (15 U.S.C. 1116(a)) is amended in the first sentence by 
        striking ``section 43(a)'' and inserting ``section 43 (a), (c), 
        or (d)''.
            (2) Damages.--Section 35(a) of the Trademark Act of 1946 
        (15 U.S.C. 1117(a)) is amended in the first sentence by 
        inserting ``, (c), or (d)'' after ``section 43 (a)''.
    (b) Statutory Damages.--Section 35 of the Trademark Act of 1946 (15 
U.S.C. 1117) is amended by adding at the end the following:
    ``(d) In a case involving a violation of section 43(d)(1), the 
plaintiff may elect, at any time before final judgment is rendered by 
the trial court, to recover, instead of actual damages and profits, an 
award of statutory damages in the amount of not less than $1,000 and 
not more than $100,000 per domain name, as the court considers just. 
The court shall remit statutory damages in any case in which an 
infringer believed and had reasonable grounds to believe that use of 
the domain name by the infringer was a fair or otherwise lawful use.''.

SEC. 5. LIMITATION ON LIABILITY.

    Section 32(2) of the Trademark Act of 1946 (15 U.S.C. 1114) is 
amended--
            (1) in the matter preceding subparagraph (A) by striking 
        ``under section 43(a)'' and inserting ``under section 43 (a) or 
        (d)''; and
            (2) by redesignating subparagraph (D) as subparagraph (E) 
        and inserting after subparagraph (C) the following:
                    ``(D)(i) A domain name registrar, a domain name 
                registry, or other domain name registration authority 
                that takes any action described under clause (ii) 
                affecting a domain name shall not be liable for 
                monetary relief to any person for such action, 
                regardless of whether the domain name is finally 
                determined to infringe or dilute the mark.
                    ``(ii) An action referred to under clause (i) is 
                any action of refusing to register, removing from 
                registration, transferring, temporarily disabling, or 
                permanently canceling a domain name--
                            ``(I) in compliance with a court order 
                        under section 43(d); or
                            ``(II) in the implementation of a 
                        reasonable policy by such registrar, registry, 
                        or authority prohibiting the registration of a 
                        domain name that is identical to, confusingly 
                        similar to, or dilutive of another's mark 
                        registered on the Principal Register of the 
                        United States Patent and Trademark Office.
                    ``(iii) A domain name registrar, a domain name 
                registry, or other domain name registration authority 
                shall not be liable for damages under this section for 
                the registration or maintenance of a domain name for 
                another absent a showing of bad faith intent to profit 
                from such registration or maintenance of the domain 
                name.
                    ``(iv) If a registrar, registry, or other 
                registration authority takes an action described  under 
clause (ii) based on a knowing and material misrepresentation by any 
person that a domain name is identical to, confusingly similar to, or 
dilutive of a mark registered on the Principal Register of the United 
States Patent and Trademark Office, such person shall be liable for any 
damages, including costs and attorney's fees, incurred by the domain 
name registrant as a result of such action. The court may also grant 
injunctive relief to the domain name registrant, including the 
reactivation of the domain name or the transfer of the domain name to 
the domain name registrant.''.

SEC. 6. DEFINITIONS.

    Section 45 of the Trademark Act of 1946 (15 U.S.C. 1127) is amended 
by inserting after the undesignated paragraph defining the term 
``counterfeit'' the following:
            ``The term `Internet' has the meaning given that term in 
        section 230(f)(1) of the Communications Act of 1934 (47 U.S.C. 
        230(f)(1)).
            ``The term `domain name' means any alphanumeric designation 
        which is registered with or assigned by any domain name 
        registrar, domain name registry, or other domain name 
        registration authority as part of an electronic address on the 
        Internet.''.

SEC. 7. SAVINGS CLAUSE.

    Nothing in this Act shall affect any defense available to a 
defendant under the Trademark Act of 1946 (including any defense under 
section 43(c)(4) of such Act or relating to fair use) or a person's 
right of free speech or expression under the first amendment of the 
United States Constitution.

SEC. 8. SEVERABILITY.

    If any provision of this Act, an amendment made by this Act, or the 
application of such provision or amendment to any person or 
circumstances is held to be unconstitutional, the remainder of this 
Act, the amendments made by this Act, and the application of the 
provisions of such to any person or circumstance shall not be affected 
thereby.

SEC. 9. EFFECTIVE DATE.

    This Act shall apply to all domain names registered before, on, or 
after the date of enactment of this Act, except that statutory damages 
under section 35(d) of the Trademark Act of 1946 (15 U.S.C. 1117), as 
added by section 4 of this Act, shall not be available with respect to 
the registration, trafficking, or use of a domain name that occurs 
before the date of enactment of this Act.