[House Report 106-412]
[From the U.S. Government Publishing Office]




106th Congress                                                   Report
  1st Session           HOUSE OF REPRESENTATIVES                106-412

======================================================================



 
                  TRADEMARK CYBERPIRACY PREVENTION ACT

                                _______


October 25, 1999.--Committed to the Committee of the Whole House on the 
              State of the Union and ordered to be printed

                                _______
                                

Mr. Coble, from the Committee on the Judiciary, submitted the following

                              R E P O R T

                        [To accompany H.R. 3028]

    The Committee on the Judiciary, to whom was referred the 
bill (H.R. 3028) amending certain trademark laws to prevent the 
misappropriation of marks, having considered the same, reports 
favorably thereon with an amendment and recommends that the 
bill as amended do pass.

                           TABLE OF CONTENTS

                                                                  

                                                                 Page
The Amendment..............................................           1
Purpose and Summary........................................           5
Background and Need for the Legislation....................           5
Hearings...................................................           7
Committee Consideration....................................           7
Committee on Government Reform Findings....................           7
New Budget Authority and Tax Expenditures..................           7
Congressional Budget Office Cost Estimate..................           7
Constitutional Authority Statement.........................           9
Section-by-Section Analysis and Discussion.................           9
Changes in Existing Law Made by the Bill, as Reported......          16

    The amendment is as follows:
    Strike out all after the enacting clause and insert in lieu 
thereof the following:

SECTION 1. SHORT TITLE; REFERENCES.

    (a) Short Title.--This Act may be cited as the ``Trademark 
Cyberpiracy Prevention 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. 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) A person shall be liable in a civil action by the owner 
of a trademark or service mark if, without regard to the goods or 
services of the parties, that person--
            ``(i) has a bad faith intent to profit from that trademark 
        or service mark; and
            ``(ii) registers, traffics in, or uses a domain name that--
                    ``(I) in the case of a trademark or service mark 
                that is distinctive at the time of registration of the 
                domain name, is identical or confusingly similar to 
                such mark;
                    ``(II) in the case of a famous trademark or service 
                mark that is famous at the time of registration of the 
                domain name, is dilutive of such mark; or
                    ``(III) is a trademark, word, or name protected by 
                reason of section 706 of title 18, United States Code, 
                or section 220506 of title 36, United States Code.
    ``(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 lawful use, if any, of the 
        domain name in connection with the bona fide offering of any 
        goods or services;
            ``(iv) the person's lawful 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 
        financial gain 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 provision of material and misleading 
        false contact information when applying for the registration of 
        the domain name or the person's intentional failure to maintain 
        accurate contact information;
            ``(viii) the person's registration or acquisition of 
        multiple domain names which the person knows are identical or 
        confusingly similar to trademarks or service marks of others 
        that are distinctive at the time of registration of such domain 
        names, or dilutive of famous trademarks or service marks of 
        others that are famous at the time of registration of such 
        domain names, without regard to the goods or services of such 
        persons;
            ``(ix) the person's history of offering to transfer, sell, 
        or otherwise assign domain names incorporating marks of others 
        to the mark owners or any third party for consideration without 
        having used, or having an intent to use, the domain names in 
        the bona fide offering of any goods and services;
            ``(x) the person's history of providing material and 
        misleading false contact information when applying for the 
        registration of other domain names which incorporate marks, or 
        the person's history of using aliases in the registration of 
        domain names which incorporate marks of others; and
            ``(xi) the extent to which the trademark or service mark 
        incorporated in the person's domain name registration is 
        distinctive and famous within the meaning of subsection (c)(1) 
        of section 43 of the Trademark Act of 1946 (15 U.S.C. 1125).
    ``(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.
    ``(D) A person shall be liable for using a domain name under 
subparagraph (A)(ii) only if that person is the domain name registrant 
or that registrant's authorized licensee.
    ``(E) As used in this paragraph, the term `traffics in' refers to 
transactions that include, but are not limited to, sales, purchases, 
loans, pledges, licenses, exchanges of currency, and any other transfer 
for consideration or receipt in exchange for consideration.
    ``(2)(A) The owner of a mark may file an in rem civil action 
against a domain name in the judicial district in which suit may be 
brought against the domain name registrar, domain name registry, or 
other domain name authority that registered or assigned the domain name 
if--
            ``(i) the domain name violates any right of the registrant 
        of a mark registered in the Patent and Trademark Office, or 
        subsection (a) or (c) of this section, or is a trademark, word, 
        or name protected by reason of section 706 of title 18, United 
        States Code, or section 220506 of title 36, United States Code; 
        and
            ``(ii) the court finds that--
                    ``(I) the owner has demonstrated due diligence and 
                was not able to find or was not able to serve a person 
                who would have been a defendant in a civil action under 
                paragraph (1); or
                    ``(II) personal jurisdiction cannot be established 
                over any person who would have been a defendant in a 
                civil action under paragraph (1).
    ``(B) The remedies in 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.
    ``(C) The in rem action established under this paragraph and any 
remedy available under such action shall be in addition to any other 
civil action or remedy otherwise applicable.
    ``(3) The civil action established under paragraph (1) and any 
remedy available under such action shall be in addition to any other 
civil action or remedy otherwise applicable.''.

SEC. 3. 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 ``(a) or (c)'' and inserting ``(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 may remit statutory damages in any case in which the court 
finds that 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. 4. 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, or of a trademark, 
                word, or name protected by reason of section 706 of 
                title 18, United States Code, or section 220506 of 
                title 36, United States Code.
            ``(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 other 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, or a trademark, 
        word, or name protected by reason of section 706 of title 18, 
        United States Code, or section 220506 of title 36, United 
        States Code, the person making the knowing and material 
        misrepresentation 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.
            ``(v) A domain name registrant whose domain name has been 
        suspended, disabled, or transferred under a policy described 
        under clause (ii)(II) may, upon notice to the mark owner, file 
        a civil action to establish that the registration or use of the 
        domain name by such registrant is not unlawful under this Act. 
        The court may grant injunctive relief to the domain name 
        registrant, including the reactivation of the domain name or 
        transfer of the domain name to the domain name registrant.''.

SEC. 5. 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 `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.
    ``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)).''.

SEC. 6. 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. 7. EFFECTIVE DATE.

    Sections 2 through 6 of this Act shall apply to all domain names 
registered before, on, or after the date of enactment of this Act, 
except that damages under subsection (a) or (d) of section 35 of the 
Trademark Act of 1946 (15 U.S.C. 1117), as amended by section 3 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.

SEC. 8. ADJUSTMENT OF CERTAIN TRADEMARK AND PATENT FEES.

    (a) Trademark Fees.--Notwithstanding the second sentence of section 
31(a) of the Trademark Act of 1946 (15 U.S.C. 1113(a)), the 
Commissioner of Patents and Trademarks is authorized in fiscal year 
2000 to adjust trademark fees without regard to fluctuations in the 
Consumer Price Index during the preceding 12 months.
    (b) Patent Fees.--
            (1) Original filing fee.--Section 41(a)(1)(A) of title 35, 
        United States Code, relating to the fee for filing an original 
        patent application, is amended by striking ``$760'' and 
        inserting ``$690''.
            (2) Reissue fee.--Section 41(a)(4)(A) of title 35, United 
        States Code, relating to the fee for filing for a reissue of a 
        patent, is amended by striking ``$760'' and inserting ``$690''.
            (3) National fee for certain international applications.--
        Section 41(a)(10) of title 35, United States Code, relating to 
        the national fee for certain international applications, is 
        amended by striking ``$760'' and inserting ``$690''.
            (4) Maintenance fees.--Section 41(b)(1) of title 35, United 
        States Code, relating to certain maintenance fees, is amended 
        by striking ``$940'' and inserting ``$830''.
    (c) Effective Date.--Subsection (a) shall take effect on the date 
of the enactment of this Act. The amendments made by subsection (b) 
shall take effect 30 days after the date of the enactment of this Act.

                          Purpose and Summary

    Over the last two years, the Subcommittee on Courts and 
Intellectual Property held multiple hearings on domain names to 
access their impact on intellectual property rights, 
particularly the Lanham Act. Through this committee's 
oversight, it has become very aware of the problems faced by 
owners of famous marks when dealing with the issue of domain 
names. Much testimony has been gathered evidencing the practice 
of cybersquatters who register numerous domain names containing 
American trademarks or tradenames only to hold them ransom in 
exchange for money. Sometimes these pirates put pornographic 
materials on theses sites in an effort to increase the 
likelihood of collecting ransom by damaging the integrity of a 
mark. The time has come for this practice to stop.
    The legal recourse provided for in this legislation, 
combined with the intellectual property alternative dispute 
resolution procedures being adopted by the domain name 
registrars, will give trademark owners important tools to 
protect their intellectual property. This is a measured and 
balanced response to a growing problem, and will clarify that 
trademark property rights are respected as the Internet 
continues to grow.

                Background and Need for the Legislation

    A great deal of controversy surrounds trademark rights vis-
a-vis domain names. In the early years of the Internet, when 
the primary users were academic institutions and government 
agencies, little concern existed over trademarks and domain 
names. As the Internet grew, however, the fastest growing 
number of requests for domain names were in the .com domain 
because of the explosion of businesses offering products and 
services on the Internet.
    Because people use domain names to locate Web resources, 
companies doing business online now want domain names that are 
easy to remember and that relate to their products, trade 
names, and trademarks. Owners of famous trademarks typically 
register their trademarks as domain names (such as 
``microsoft.com''). This kind of identification can be highly 
important to a business that conducts commerce on the Internet. 
In fact, many consumers who do not know the domain name of a 
company will first try the principal trademark or trade name of 
that company to locate the company's Web site.
    Since domain names are available from Network Solutions, 
Inc. (NSI), and now other registrars, on a first-come, first-
served basis, some owners have discovered that the domain name 
containing their trademark has already been registered. The 
situation has been aggravated by some people, known as 
``cyberpirates,'' registering domain names in the hope that 
they might be able to sell them to companies that place a high 
value on these trademarks. These cyberpirates have no intention 
of using the domain name in commerce, and instead often attempt 
to exact money from a company in exchange for domain names that 
relate to that company's trademarks.
    Disputes involving domain names and trademarks place 
registrars in the awkward position of being pressured to takes 
sides in trademark disputes, or to deny, grant, or suspend a 
domain name based on an allegation of infringement. NSI has 
maintained a domain name dispute policy since 1995, but it has 
been criticized by many intellectual property owners. Only 
owners of trademarks that are registered with the U.S. 
Trademark Office's Principal Register and are identical to the 
disputed domain name can invoke the dispute policy. This means 
that NSI will not act on complaints from parties that have 
Federal registrations on the Supplemental Register, have State 
trademark registrations, or have only common law trademark 
rights, or rights under Section 43(a) of the Lanham Act.
    ``Cyberpiracy'' can involve individuals seeking 
extortionate profits by reserving Internet domain names that 
are similar or identical to trademarked names with no intention 
of using the names in commerce themselves. Such actions 
undermine consumer confidence, discourage consumer use of the 
Internet, and destroy the value of brand-names and trademarks 
of American businesses.
    Cyberpiracy can hurt businesses in a number of ways. First, 
a cyberpirate's expropriation of a mark as part of a domain 
name prevents the trademark owner from using the mark as part 
of its domain name. As a result, consumers seeking a trademark 
owner's Web site are diverted elsewhere, which means lost 
business opportunities for the trademark owner. A cyberpirate's 
use may also blur the distinctive quality of a mark and, when 
linked to certain types of Internet activities such as 
pornography, may also tarnish the mark. Finally, businesses are 
required to police and enforce their trademark rights by 
preventing unauthorized use, or risk losing those rights 
entirely.
    Currently, the legal remedies available to trademark owners 
to prevent cyberpiracy are both expensive and uncertain. 
Federal courts have generally found in favor of the owner of a 
trademark where a similar or identical domain name is actively 
used in connection with a cyberpirate's Web site.\1\ The law is 
less settled, however, where a cyberpirate has either 
registered the domain name and done nothing more, or where the 
cyberpirate uses a significant variation on the trademark.\2\ 
Regardless of the ultimate outcome of litigation, trademark 
owners must expend significant resources and endure the 
inevitable delay associated with bringing a civil action in 
order to validate their rights. Many companies simply choose to 
pay extortionate prices to cyberpirates in order to rid 
themselves of a potentially damaging headache with an uncertain 
outcome. For example, Gateway recently paid $100,000 to a 
cyberpirate who had placed pornographic images to the Web site 
``www.gateway20000.''
---------------------------------------------------------------------------
    \1\ See, e.g., Toeppen v. Panavision International L.P., 141 F.3d 
1316 (9th Cir. 1998) (noting that the registration of the trademark 
``Panavision'' as a domain name by a cyberpirate resulted in the 
dilution of that mark); Cardservice International Inc. v. McGee 950 
F.Supp. 737 (E.D.Va. 1997), aff'd without op., 129 F.3d 1258 (4th Cir. 
1997) (ruling that the owner of the registered mark ``Cardservice'' is 
entitled to a permanent injunction against the use of the domain name 
``cardservice.com'' by another party because it is likely to confuse 
customers).
    \2\ See, e.g., Toys ``R'' Us Inc. v. Feinberg, 26 F.Supp. 2d 639 
(S.D.N.Y. 1998) (holding that the use of ``gunsareus.com'' as a domain 
name does not infringe or dilute the mark of ``Toys `R' Us'' due to the 
dissimilarity of the terms).
---------------------------------------------------------------------------

                                Hearings

    The committee's Subcommittee on Courts and Intellectual 
Property held a hearing on Wednesday, July 28, 1999, on 
Internet Domain Names and Intellectual Property Rights. The 
following witnesses appeared at the hearing: Andrew Pincus, 
General Counsel, United States Department of Commerce; Francis 
Gurry, Assistant Director General & Legal Counsel, World 
Intellectual Property Organization; Michael Roberts, Interim 
President and CEO, Internet Corporation for Assigned Names and 
Numbers (ICANN); Michael A. Daniels, Chairman of the Board, 
Network Solutions, Incorporated; Jonathan Cohen, President, 
Intellectual Property Constituency of the Domain Name 
Supporting Organization of ICANN; Ken Stubbs, Chairman of the 
Executive Committee, Internet Council of Registrars (CORE) ; 
Kathlene Karg, Director of Intellectual Property and Public 
Policy, Interactive Digital Software Association, for the 
Copyright Coalition on Domain Names; Mike Kirk, Executive 
Director, American Intellectual Property Law Association 
(AIPLA); and Anne Chasser, President, International Trademark 
Association (INTA).

                        Committee Consideration

    On September 9,1999, the Subcommittee on Courts and 
Intellectual Property met in open session and ordered favorably 
reported the bill H.R. 3028, by voice vote, a quorum being 
present. On October 13, 1999, the committee met in open session 
and ordered favorably reported the bill H.R. 3028 as amended, 
by voice vote, a quorum being present.

                Committee on Government Reform Findings

    No findings or recommendations of the Committee on 
Government Reform and Oversight were received as referred to in 
clause 3(c)(4) of rule XIII of the Rules of the House of 
Representatives.

               New Budget Authority and Tax Expenditures

    Clause 3(c)(2) of House Rule XIII is inapplicable because 
this legislation does not provide new budget authority or 
increased tax expenditures.

               Congressional Budget Office Cost Estimate

    The Congressional Budget Office estimates the bill would 
not have a significant effect on the Federal budget nor would 
affect direct spending or receipts; therefore pay-as-you-go 
procedures would not likely apply.
    In compliance with clause 3(c)(3) of rule XIII of the Rules 
of the House of Representatives, the committee sets forth, with 
respect to the bill, H.R. 3028, the following estimate and 
comparison prepared by the Director of the Congressional Budget 
Office under section 403 of the Congressional Budget Act of 
1974:

                                     U.S. Congress,
                               Congressional Budget Office,
                                  Washington, DC, October 22, 1999.
Hon. Henry J. Hyde, Chairman,
Committee on the Judiciary,
House of Representatives, Washington, DC.
    Dear Mr. Chairman: The Congressional Budget Office has 
prepared the enclosed cost estimate for H.R. 3028, the 
Trademark Cyberpiracy Prevention Act.
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contacts are Mark Hadley 
(for Federal costs), who can be reached at 226-2860, Shelley 
Finlayson (for the State and local impact), who can be reached 
at 225-3220, and John Harris (for the private-sector impact), 
who can be reached at 226-6910.
            Sincerely,
                                  Dan L. Crippen, Director.
H.R. 3028--Trademark Cyberpiracy Prevention Act.
    Cyberpiracy (or cybersquatting) consists of registering, 
trafficking in, or using domain names (Internet addresses) that 
are identical or confusingly similar to trademarks with the 
bad-faith intent to profit from the goodwill of the trademarks. 
H.R. 3028 would allow trademark owners to sue anyone who 
engages in such conduct, and allow the courts to order the 
forfeiture, cancellation, or transfer of domain names in such 
instances. CBO estimates that implementing these provisions 
would not have a significant effect on the Federal budget.
    In addition, the bill would reduce the amounts the Patent 
and Trademark Office (PTO) charges inventors to file patents 
and would authorize the PTO to adjust the amounts it charges to 
file trademarks. In reviewing the cost of each activity the PTO 
performs, the agency determined that applicants for trademarks 
paid less than the cost to process trade applications, and 
applicants for patents paid more than the cost to process 
patent applications. Based on that information, CBO expects 
that the agency would increase trademark fees by more than 
enough to offset the lower patent fees that the bill would 
require. Under current law, PTO adjusts charges to patent and 
trademark owners to reflect fluctuations in the Consumer Price 
Index.
    All fees collected by the PTO are credited to its 
appropriation as an offset to discretionary spending. Thus, CBO 
estimates that implementing H.R. 3028 would reduce net 
appropriated spending by the PTO by an average of about $10 
million a year over the 2000-2004 period, assuming 
appropriation of the necessary amounts. Because H.R. 3028 would 
not affect direct spending or receipts, pay-as-you-go 
procedures would not apply to the bill.
    H.R. 3028 contains no intergovernmental mandates as defined 
in the Unfunded Mandates Reform Act (UMRA) and could benefit 
state, local, or tribal governments if they sue to recover 
damages from infringement or dilution of trademarks based on 
the provisions of the bill. Any such benefits are expected to 
be minimal. The changes in patent and trademark fees authorized 
in the bill also are expected to have only minimal effects on 
the budgets of state, local, and tribal governments.
    H.R. 3028 would create a new private-sector mandate for 
trademark holders by granting the PTO the discretion to 
increase trademark fees. Trademark fee increases are private-
sector mandates because the Federal Government controls the 
trademark system and no reasonable alternatives to the system 
exist. CBO estimates that the PTO would collect roughly $40 
million a year, on average, in fee increase over the next five 
years. The costs of the mandate thus fall below the threshold 
established in UMRA ($100 million in 1996, adjusted annually 
for inflation).
    The bill would benefit patent holders and applicants by 
reducing several patent fees, including filing, reissuance, and 
certain maintenance fees. CBO estimates that the fee reductions 
would save patent holders and applicants roughly $30 million a 
year, on average, over the next five years. Although some firms 
and individuals may hold both trademarks and patents, the 
patent fee reductions would not offset the trademark fee 
increases. Trademarks and patents serve separate and distinct 
purposes, and many trademark holders hold no patents.
    On August 5, 1999, CBO transmitted an estimate of S. 1255, 
the Anticybersquatting Consumer Protection Act, as reported by 
the Senate Committee on the Judiciary on July 29, 1999. Because 
S.1255 would not affect the fees collected by the PTO, CBO 
estimated that it would not have a significant budgetary 
impact.
    The CBO staff contacts are Mark Hadley (for Federal costs), 
who can be reached at 226-2860, Shelley Finlayson (for the 
state and local impact), who can be reached at 225-3220, and 
John Harris (for the private-sector impact), who can be reached 
at 226-6910. This estimate was approved by Peter H. Fontaine, 
Deputy Assistant Director for Budget Analysis.

                   Constitutional Authority Statement

    Pursuant to clause 3(d)(1) of the rule XIII of the Rules of 
the House of Representatives, the committee finds the authority 
for this legislation in Article I, section 8, clause 3 of the 
Constitution, the authorizing provision for the underlying 
Lanham Act to which this Act is an amendment.

               Section-by-Section Analysis and Discussion

Section 1. Short title; references.
    This section provides that the act may be cited as the 
``Trademark Cyberpiracy Prevention Act'' and that any 
references within the bill to the Trademark Act of 1946 shall 
be a reference to the act entitled ``An Act to provide for the 
registration and protection of trademarks used in commerce, to 
carry out the provisions of certain international conventions, 
and for other purposes,'' approved July 5, 1946 (15 U.S.C. 
Sec. 1051 et seq.), also commonly referred to as the Lanham 
Act.
Section 2. Cyberpiracy prevention
    Subsection (a). In General. This subsection amends section 
the Trademark Act to provide an explicit trademark remedy for 
cyberpiracy under a new section 43(d). Under paragraph (1)(A) 
of the new section 43(d), actionable conduct would include the 
registration, trafficking in, or use of a domain name that is 
identical to, confusingly similar to, or dilutive of the 
trademark or service mark of another, provided that the mark 
was distinctive (i.e., enjoyed trademark status) at the time 
the domain name was registered. The bill is carefully and 
narrowly tailored, however, to extend only to cases where the 
plaintiff can demonstrate that the defendant registered, 
trafficked in, or used the offending domain name with bad-faith 
intent to profit from the goodwill of a mark belonging to 
someone else. Thus, the bill does not extend to innocent domain 
name registrations by those who are unaware of another's use of 
the name, or even to someone who is aware of the trademark 
status of the name but registers a domain name containing the 
mark for any reason other than with bad faith intent to profit 
from the goodwill associated with that mark.
    Paragraph (1)(B) of the new section 43(d) sets forth a 
number of nonexclusive, nonexhaustive factors to assist a court 
in determining whether the required bad-faith element exists in 
any given case. These factors are designed to balance the 
property interests of trademark owners with the legitimate 
interests of Internet users and others who seek to make lawful 
uses of others' marks, including for purposes such as 
comparative advertising, comment, criticism, parody, news 
reporting, fair use, etc. The bill suggests a total of eleven 
factors a court may wish to consider. The first four suggest 
circumstances that may tend to indicate an absence of bad-faith 
intent to profit from the goodwill of a mark, and the others 
suggest circumstances that may tend to indicate that such bad-
faith intent exists.
    First, under paragraph (1)(B)(i), a court may consider 
whether the domain name registrant has trademark or any other 
intellectual property rights in the name. This factor 
recognizes, as does trademark law in general, that there may be 
concurring uses of the same name that are noninfringing, such 
as the use of the ``Delta'' mark for both air travel and sink 
faucets. Similarly, the registration of the domain name 
``deltaforce.com'' by a movie studio would not tend to indicate 
a bad faith intent on the part of the registrant to trade on 
Delta Airlines or Delta Faucets' trademarks.
    Second, under paragraph (1)(B)(ii), a court may consider 
the extent to which the domain name is the same as the 
registrant's own legal name or a nickname by which that person 
is commonly identified. This factor recognizes, again as does 
the concept of fair use in trademark law, that a person should 
be able to be identified by their own name, whether in their 
business or on a web site. Similarly, a person may bear a 
legitimate nickname that is identical or similar to a well-
known trademark and registration of a domain name using that 
nickname would not tend to indicate bad faith. This factor is 
not intended to suggest that domain name registrants may evade 
the application of this act by merely adopting Exxon, Ford, 
Bugs Bunny or other well-known marks as their nicknames. It 
merely provides a court with the appropriate discretion to 
determine whether or not the fact that a person bears a 
nickname similar to a mark at issue is an indication of an 
absence of bad-faith on the part of the registrant.
    Third, under paragraph (1)(B)(iii), a court may consider 
the domain name registrant's prior use, if any, of the domain 
name in connection with the bona fide offering of goods or 
services. Again, this factor recognizes that the legitimate use 
of the domain name in online commerce may be a good indicator 
of the intent of the person registering that name. Where the 
person has used the domain name in commerce without creating a 
likelihood of confusion as to the source or origin of the goods 
or services and has not otherwise attempted to use the name in 
order to profit from the goodwill of the trademark owner's 
name, a court may look to this as an indication of the absence 
of bad faith on the part of the registrant. A defendant should 
have the burden of introducing evidence of lawful use to assist 
the court in evaluating this factor.
    Fourth, under paragraph (1)(B)(iv), a court may consider 
the person's legitimate noncommercial or fair use of the mark 
in a web site that is accessible under the domain name at 
issue. This factor is intended to balance the interests of 
trademark owners with the interests of those who would make 
lawful noncommercial or fair uses of others' marks online, such 
as in comparative advertising, comment, criticism, parody, news 
reporting, etc. Under the bill, the use of a domain name for 
purposes of comparative advertising, comment, criticism, 
parody, news reporting, etc., even where done for profit, would 
not alone satisfy the bad-faith intent requirement. The fact 
that a person may use a mark in a site in such a lawful manner 
may be an appropriate indication that the person's registration 
or use of the domain name lacked the required element of bad-
faith. This factor is not intended to create a loophole that 
otherwise might swallow the bill, however, by allowing a domain 
name registrant to evade application of the Act by merely 
putting up a noninfringing site under an infringing domain 
name. For example, in the well know case of Panavision Int'l v. 
Toeppen, 141 F.3d 1316 (9th Cir. 1998), a well known 
cyberpirate had registered a host of domain names mirroring 
famous trademarks, including names for Panavision, Delta 
Airlines, Neiman Marcus, Eddie Bauer, Lufthansa, and more than 
100 other marks, and had attempted to sell them to the mark 
owners for amounts in the range of $10,000 to $15,000 each. His 
use of the ``panavision.com'' and ``panaflex.com'' domain names 
was seemingly more innocuous, however, as they served as 
addresses for sites that merely displayed pictures of Pana 
Illinois and the word ``Hello'' respectively. This act would 
not allow a person to evade the holding of that case--which 
found that Mr. Toeppen had made a commercial use of the 
Panavision marks and that such uses were, in fact, diluting 
under the Federal Trademark Dilution Act--merely by posting 
noninfringing uses of the trademark on a site accessible under 
the offending domain name, as Mr. Toeppen did. Similarly, the 
bill does not affect existing trademark law to the extent it 
has addressed the interplay between first amendment protections 
and the rights of trademark owners. Rather, the act gives 
courts the flexibility to weigh appropriate factors in 
determining whether the name was registered or used in bad 
faith, and it recognizes that one such factor may be the use 
the domain name registrant makes of the mark.
    Fifth, under paragraph (1)(B)(v), a court may consider 
whether, in registering or using the domain name, the 
registrant intended to divert consumers away from the trademark 
owner's website to a website that could harm the goodwill of 
the mark, either for purposes of 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. This factor recognizes 
that one of the main reasons cyberpirates use other people's 
trademarks is to divert Internet users to their own sites by 
creating confusion as to the source, sponsorship, affiliation, 
or endorsement of the site. This factor recognizes that one of 
the main reasons cyberpirates use other people's trademarks is 
to divert Internet users to their own sites by creating 
confusion as to the source, sponsorship, affiliation, or 
enforcement of the site. This is done for a number of reasons, 
including to pass off inferior goods under the name of a well-
known mark holder, to defraud consumers into providing 
personally identifiable information, such as credit card 
numbers, to attract eyeballs to sites that price online 
advertising according to the number of ``hits'' the site 
receives, or even just to harm the value of the mark. Under 
this provision, a court may give appropriate weight to evidence 
that a domain name registrant intended to confuse or deceive 
the public in this manner when making a determination of bad-
faith intent.
    Sixth, under paragraph (1)(B)(vi), a court may consider a 
domain name registrant's offer to transfer, sell, or otherwise 
assign the domain name to the mark owner or any third party for 
financial gain, where the registrant has not used, and did not 
have any intent to use, the domain name in the bona fide 
offering of any goods or services. This factor is consistent 
with the court cases, like the Panavision case mentioned above, 
where courts have found a defendant's offer to sell the domain 
name to the legitimate mark owner as being indicative of the 
defendant's intent to trade on the value of a trademark owner's 
marks by engaging in the business of registering those marks 
and selling them to the rightful trademark owners. It does not 
suggest that a court should consider the mere offer to sell a 
domain name to a mark owner or the failure to use a name in the 
bona fide offering of goods or services is sufficient to 
indicate bad faith. Indeed, there are cases in which a person 
registers a name in anticipation of a business venture that 
simply never pans out. And someone who has a legitimate 
registration of a domain name that mirrors someone else's 
domain name, such as a trademark owner that is a lawful 
concurrent user of that name with another trademark owner, may, 
in fact, wish to sell that name to the other trademark owner. 
This bill does not imply that these facts are an indication of 
bad-faith. It merely provides a court with the necessary 
discretion to recognize the evidence of bad-faith when it is 
present. In practice, the offer to sell domain names for 
exorbitant amounts to the rightful mark owner has been one of 
the most common threads in abusive domain name registrations. 
Finally, by using the financial gain standard, this allows a 
court to examine the motives of the seller.
    Seventh, under paragraph (1)(B)(vii), a court may consider 
the registrant's provision of material and misleading false 
contact information in an application for the domain name 
registration. Falsification of contact information with the 
intent to evade identification and service of process by 
trademark owners is also a common thread in cases of 
cyberpiracy. This factor recognizes that fact, while still 
recognizing that there may be circumstances in which the 
provision of false information may be due to other factors, 
such as mistake or, as some have suggested in the case of 
political dissidents, for purposes of anonymity. This bill 
balances those factors by limiting consideration to the 
person's contact information, and even then requiring that the 
provision of false information be material and misleading. As 
with the other factors, this factor is nonexclusive and a court 
is called upon to make a determination based on the facts 
presented whether or not the provision of false information 
does, in fact, indicate bad-faith.
    Eighth, under paragraph (1)(B)(viii), a court may consider 
the domain name registrant's acquisition of multiple domain 
names that are identical to, confusingly similar to, or 
dilutive of others' marks. This factor recognizes the 
increasingly common cyberpiracy practice known as 
``warehousing'', in which a cyberpirate registers multiple 
domain names--sometimes hundreds, even thousands--that mirror 
the trademarks of others. By sitting on these marks and not 
making the first move to offer to sell them to the mark owner, 
these cyberpirates have been largely successful in evading the 
case law developed under the Federal Trademark Dilution Act. 
This act does not suggest that the mere registration of 
multiple domain names is an indication of bad faith, but allows 
a court to weigh the fact that a person has registered multiple 
domain names that infringe or dilute the trademarks of others 
as part of its consideration of whether the requisite bad-faith 
intent exists.
    Ninth, under paragraph (1)(B)(ix), a court may consider the 
person's history of offering to transfer, sell, or otherwise 
assign domain name incorporating marks of others to the mark 
owners or other third party for consideration without having 
used, or having intent to use, the domain name. This factor 
should assist a court in distinguishing those circumstance more 
akin to warehousing versus those circumstances where the 
registrant has made a change is a business plan or course of 
action.
    Tenth, under paragraph (1)(B)(x), a court may consider the 
person's history of providing material and misleading false 
contact information when applying for the registration of other 
domain names, or the person's history of using aliases in the 
registration of domain names which incorporate the marks of 
others. This factor recognizes that more often an applicant 
uses false or misleading contact information, the more likely 
it is that the applicant is engaging in speculative activity.
    Lastly, under paragraph (1)(B)(xi), a court may consider 
the extent to which the mark incorporated in the person's 
domain name registration is distinctive and famous within the 
meaning of subsection (c)(1) of section 43 of the Trademark Act 
of 1946. The more distinctive or famous a mark has become, the 
more likely the owner of that mark is deserving of the relief 
available under this act.
    Paragraph (1)(C) makes clear that in any civil action 
brought under the new section 43(d), a court may order the 
forfeiture, cancellation, or transfer of a domain name to the 
owner of the mark. Paragraph (1)(D) further clarifies that a 
use of a domain name shall be limited to a use of the domain 
name by the registrant or his or her authorized licensee. This 
provision limits the right to use the domain name as a means to 
infringe on another's other bona fide trademark rights.
    Paragraph (2)(A) provides for in rem jurisdiction, which 
allows a mark owner to seek the forfeiture, cancellation, or 
transfer of an infringing domain name by filing an in rem 
action against the name itself, where the mark owner has 
satisfied the court that it has exercised due diligence in 
trying to locate the owner of the domain name but is unable to 
do so. Such in rem jurisdiction is proper in two instances. 
First, where the mark owner has satisfied the court that it has 
exercised due diligence in trying to locate the owner of the 
domain name but is unable to do so, or is unable to affect 
service. As indicated above, a significant problem faced by 
trademark owners in the fight against cybersquatting is the 
fact that many cybersquatters register domain names under 
aliases or otherwise provide false information in their 
registration applications in order to avoid identification and 
service of process by the mark owner. The act alleviates this 
difficulty, while protecting the notions of fair play and 
substantial justice, by enabling a mark owner to seek an 
injunction against the infringing property in those cases 
where, after due diligence, a mark owner is unable to proceed 
against the domain name registrant because the registrant has 
provided false contact information or is otherwise not to be 
found, provided that mark owner can show that the domain name 
itself violates substantive Federal trademark law (i.e., that 
the domain name violates the rights of the registrant of a mark 
registered in the Patent and Trademark Office, or section 43 
(a) or (c) of the Trademark Act). Second, such in rem 
jurisdiction is also appropriate in instances where personal 
jurisdiction cannot be established over the domain name 
registrant. This situation occurs when a non-U.S. resident 
cybersquats on a domain name that infringes upon a U.S. 
trademark. This type of in rem jurisdiction still requires a 
nexus based upon a U.S. registry or registrar would not offend 
international comity. This jurisdiction would not extend to any 
domain name registries existing outside of the United States. 
Nor would this jurisdiction preclude the movement of any 
registries to outside of the United States. Instead, providing 
in rem jurisdiction based upon the lack of personal 
jurisdiction over the cybersquatter would provide protection 
both for trademark owners and perhaps, more importantly, 
consumers. Finally, this jurisdiction does not offend due 
process, since the property and only the property is the 
subject of the jurisdiction, not other substantive personal 
rights of any individual defendant.
    Paragraph (2)(B) limits the relief available in such an in 
rem action to an injunction ordering the forfeiture, 
cancellation, or transfer of the domain name.
    Paragraph (2)(C) states that the in rem remedies under this 
section shall be in addition to other remedies that are 
applicable.
    Paragraph (3) makes clear that the creation of a new 
section 43(d) in the Trademark Act does not in any way limit 
the application of current provisions of trademark, unfair 
competition and false advertising, or dilution law, or other 
remedies under counterfeiting or other statutes, to cyberpiracy 
cases.
Section 3. Damages and Remedies
    Section 3 applies traditional trademark remedies, including 
injunctive relief, recovery of defendant's profits, actual 
damages, and costs, to cyberpiracy cases under the new section 
43(d) of the Trademark Act. The bill also amends section 35 of 
the Trademark Act to provide for statutory damages in 
cyberpiracy cases, in an amount of not less than $1,000 and not 
more than $100,000 per domain name, as the court considers 
just. The act requires the court to remit statutory damages in 
any case where the infringer believed and had reasonable 
grounds to believe that the use of the domain name was a fair 
or otherwise lawful use.
Section 4. Limitation on liability
    This section amends section 32(2) of the Trademark Act to 
extend the Trademark Act's existing limitations on liability to 
the cyberpiracy context. This section also creates a new 
subparagraph (D) in section 32(2) to encourage domain name 
registrars and registries to work with trademark owners to 
prevent cyberpiracy through a limited exemption from liability 
for domain name registrars and registries that suspend, cancel, 
or transfer domain names pursuant to a court order or in the 
implementation of a reasonable policy prohibiting cyberpiracy. 
The act anticipates a reasonable policy against cyberpiracy 
will apply only to marks registered on the Principal Register 
of the Patent and Trademark Office in order to promote 
objective criteria and predictability in the dispute resolution 
process.
    This section also protects the rights of domain name 
registrants against overreaching trademark owners. Under a new 
section subparagraph (D)(iv) in section 32(2), a trademark 
owner who knowingly and materially misrepresents to the domain 
name registrar or registry that a domain name is infringing 
shall be liable to the domain name registrant for damages 
resulting from the suspension, cancellation, or transfer of the 
domain name. In addition, the court may grant injunctive relief 
to the domain name registrant by ordering the reactivation of 
the domain name or the transfer of the domain name back to the 
domain name registrant. Finally, in creating a new subparagraph 
(D)(iii) of section 32(2), this section codifies current case 
law limiting the secondary liability of domain name registrars 
and registries for the act of registration of a domain name, 
absent bad-faith on the part of the registrar and registry.
Section 5. Definitions
    This section amends the Trademark Act's definitions section 
(section 45) to add definitions for key terms used in this act. 
First, the term ``Internet'' is defined consistent with the 
meaning given that term in the Communications Act (47 U.S.C. 
Sec. 230(f)(1)). Second, this section creates a narrow 
definition of ``domain name'' to target the specific bad-faith 
conduct sought to be addressed while excluding such things as 
screen names, file names, and other identifiers not assigned by 
a domain name registrar or registry.
Section 6. Savings clause
    This section provides an explicit savings clause making 
clear that the bill does not affect traditional trademark 
defenses, such as fair use, or a person's first amendment 
rights.
Section 7. Effective date
    This section provides that new statutory damages provided 
for under this bill shall not apply to any registration, 
trafficking, or use of a domain name that took place prior to 
the enactment of this act.

         Changes in Existing Law Made by the Bill, as Reported

    In compliance with clause 3(e) of rule XIII of the Rules of 
the House of Representatives, changes in existing law made by 
the bill, as reported, are shown as follows (existing law 
proposed to be omitted is enclosed in black brackets, new 
matter is printed in italics, existing law in which no change 
is proposed is shown in roman):

TRADEMARK ACT OF 1946

           *       *       *       *       *       *       *


                           TITLE VI--REMEDIES

    Sec. 32. (1)  * * *
    (2) Notwithstanding any other provision of this Act, the 
remedies given to the owner of a right infringed under this Act 
or to a person bringing an action [under section 43(a)] under 
section 43(a) or (d) shall be limited as follows:
            (A)  * * *

           *       *       *       *       *       *       *

            (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, or 
                of a trademark, word, or name protected by 
                reason of section 706 of title 18, United 
                States Code, or section 220506 of title 36, 
                United States Code.
            (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 other 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, or a 
        trademark, word, or name protected by reason of section 
        706 of title 18, United States Code, or section 220506 
        of title 36, United States Code, the person making the 
        knowing and material misrepresentation 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.
            (v) A domain name registrant whose domain name has 
        been suspended, disabled, or transferred under a policy 
        described under clause (ii)(II) may, upon notice to the 
        mark owner, file a civil action to establish that the 
        registration or use of the domain name by such 
        registrant is not unlawful under this Act. The court 
        may grant injunctive relief to the domain name 
        registrant, including the reactivation of the domain 
        name or transfer of the domain name to the domain name 
        registrant.
            [(D)] (E) As used in this paragraph--
                    (i) the term ``violator'' means a person 
                who violates section 43(a); and
                    (ii) the term ``violating matter'' means 
                matter that is the subject of a violation under 
                section 43(a).

           *       *       *       *       *       *       *

    Sec. 34. (a) The several courts vested with jurisdiction of 
civil actions arising under this Act shall have power to grant 
injunctions, according to the principles of equity and upon 
such terms as the court may deem reasonable, to prevent the 
violation of any right of the registrant of a mark registered 
in the Patent and Trademark Office or to prevent a violation 
under subsection [(a) or (c)] (a), (c), or (d) of section 43. 
Any such injunction may include a provision directing the 
defendant to file with the court and serve on the plaintiff 
within thirty days after the service on the defendant of such 
injunction, or such extended period as the court may direct, a 
report in writing under oath setting forth in detail the manner 
and form in which the defendant has complied with the 
injunction. Any such injunction granted upon hearing, after 
notice to the defendant, by any district court of the United 
States, may be served on the parties against whom such 
injunction is granted anywhere in the United States where they 
may be found, and shall be operative and may be enforced by 
proceedings to punish for contempt, or otherwise, by the court 
by which such injunction was granted, or by any other United 
States district court in whose jurisdiction the defendant may 
be found.

           *       *       *       *       *       *       *

  Sec. 35. (a) When a violation of any right of the registrant 
of a mark registered in the Patent and Trademark Office, a 
violation under section 43(a), (c), or (d), or a willful 
violation under section 43(c), shall have been established in 
any civil action arising under this Act, the plaintiff shall be 
entitled, subject to the provisions of sections 29 and 32, and 
subject to the principles of equity, to recover (1) defendant's 
profits, (2) any damages sustained by the plaintiff, and (3) 
the costs of the action. The court shall assess such profits 
and damages or cause the same to be assessed under its 
direction. In assessing profits the plaintiff shall be required 
to prove defendant's sales only, defendant must prove all 
elements of cost or deduction claimed. In assessing damages the 
court may enter judgment, according to the circumstances of the 
case, for any sum above the amount found as actual damages, not 
exceeding three times such amount. If the court shall find that 
the amount of the recovery based on profits is either 
inadequate or excessive the court may in its discretion enter 
judgment for such sum as the court shall find to be just, 
according to the circumstances of the case. Such sum in either 
of the above circumstances shall constitute compensation and 
not a penalty. The court in exceptional cases may award 
reasonable attorney fees to the prevailing party.

           *       *       *       *       *       *       *

    (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 may remit 
statutory damages in any case in which the court finds that 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.

           *       *       *       *       *       *       *


   TITLE VIII--FALSE DESIGNATIONS OF ORIGIN, FALSE DESCRIPTIONS, AND 
                           DILUTION FORBIDDEN

    Sec. 43. (a)  * * *

           *       *       *       *       *       *       *

    (d)(1)(A) A person shall be liable in a civil action by the 
owner of a trademark or service mark if, without regard to the 
goods or services of the parties, that person--
            (i) has a bad faith intent to profit from that 
        trademark or service mark; and
            (ii) registers, traffics in, or uses a domain name 
        that--
                    (I) in the case of a trademark or service 
                mark that is distinctive at the time of 
                registration of the domain name, is identical 
                or confusingly similar to such mark;
                    (II) in the case of a famous trademark or 
                service mark that is famous at the time of 
                registration of the domain name, is dilutive of 
                such mark; or
                    (III) is a trademark, word, or name 
                protected by reason of section 706 of title 18, 
                United States Code, or section 220506 of title 
                36, United States Code.
    (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 lawful use, if any, of the 
        domain name in connection with the bona fide offering 
        of any goods or services;
            (iv) the person's lawful 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 financial gain 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 provision of material and 
        misleading false contact information when applying for 
        the registration of the domain name or the person's 
        intentional failure to maintain accurate contact 
        information;
            (viii) the person's registration or acquisition of 
        multiple domain names which the person knows are 
        identical or confusingly similar to trademarks or 
        service marks of others that are distinctive at the 
        time of registration of such domain names, or dilutive 
        of famous trademarks or service marks of others that 
        are famous at the time of registration of such domain 
        names, without regard to the goods or services of such 
        persons;
            (ix) the person's history of offering to transfer, 
        sell, or otherwise assign domain names incorporating 
        marks of others to the mark owners or any third party 
        for consideration without having used, or having an 
        intent to use, the domain names in the bona fide 
        offering of any goods and services;
            (x) the person's history of providing material and 
        misleading false contact information when applying for 
        the registration of other domain names which 
        incorporate marks, or the person's history of using 
        aliases in the registration of domain names which 
        incorporate marks of others; and
            (xi) the extent to which the trademark or service 
        mark incorporated in the person's domain name 
        registration is distinctive and famous within the 
        meaning of subsection (c)(1) of section 43 of the 
        Trademark Act of 1946 (15 U.S.C. 1125).
    (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.
    (D) A person shall be liable for using a domain name under 
subparagraph (A)(ii) only if that person is the domain name 
registrant or that registrant's authorized licensee.
    (E) As used in this paragraph, the term `traffics in' 
refers to transactions that include, but are not limited to, 
sales, purchases, loans, pledges, licenses, exchanges of 
currency, and any other transfer for consideration or receipt 
in exchange for consideration.
    (2)(A) The owner of a mark may file an in rem civil action 
against a domain name in the judicial district in which suit 
may be brought against the domain name registrar, domain name 
registry, or other domain name authority that registered or 
assigned the domain name if--
            (i) the domain name violates any right of the 
        registrant of a mark registered in the Patent and 
        Trademark Office, or subsection (a) or (c) of this 
        section, or is a trademark, word, or name protected by 
        reason of section 706 of title 18, United States Code, 
        or section 220506 of title 36, United States Code; and
            (ii) the court finds that--
                    (I) the owner has demonstrated due 
                diligence and was not able to find or was not 
                able to serve a person who would have been a 
                defendant in a civil action under paragraph 
                (1); or
                    (II) personal jurisdiction cannot be 
                established over any person who would have been 
                a defendant in a civil action under paragraph 
                (1).
    (B) The remedies in 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.
    (C) The in rem action established under this paragraph and 
any remedy available under such action shall be in addition to 
any other civil action or remedy otherwise applicable.
    (3) The civil action established under paragraph (1) and 
any remedy available under such action shall be in addition to 
any other civil action or remedy otherwise applicable.

           *       *       *       *       *       *       *


                 TITLE X--CONSTRUCTION AND DEFINITIONS

    Sec. 45. In the construction of this Act, unless the 
contrary is plainly apparent from the context--
    The United States includes and embraces all territory which 
is under its jurisdiction and control.

           *       *       *       *       *       *       *

    A ``counterfeit'' is a spurious mark which is identical 
with, or substantially indistinguishable from, a registered 
mark.
    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.
    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)).

           *       *       *       *       *       *       *

                              ----------                              


               SECTION 41 OF TITLE 35, UNITED STATES CODE

Sec. 41. Patent fees; patent and trademark search systems

    (a) The Commissioner shall charge the following fees:
            (1)(A) On filing each application for an original 
        patent, except in design or plant cases, [$760] $690.

           *       *       *       *       *       *       *

            (4)(A) On filing each application for the reissue 
        of a patent, [$760] $690.

           *       *       *       *       *       *       *

            (10) Basic national fee for an international 
        application where the Patent and Trademark Office was 
        the International Searching Authority but not the 
        International Preliminary Examining Authority, [$760] 
        $690.

           *       *       *       *       *       *       *

    (b) The Commissioner shall charge the following fees for 
maintaining in force all patents based on applications filed on 
or after December 12, 1980:
            (1) 3 years and 6 months after grant, [$940] $830.

           *       *       *       *       *       *       *


                                
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