Cybersquatters regularly target famous, well-known consumer brands, looking to benefit from the consumer awareness and demand that comes from years of brand-building and operation in the market. This has proven true for the likes of Nike, Apple, Louis Vuitton, and Hermès, for example, which have – on more than one occasion – fallen prey to cybersquatters and counterfeiters looking to register and ultimately, profit from these company’s world-famous names and other brand-specific trademarks, including by hijacking similar web domains.
Traditionally speaking, building highly-recognized brands takes time and no small amount of capital allocated to budgets for marketing and promotion. While brand-building remains a largely time-consuming and expensive process, if recent years are any indication, the rise of a small startup brand to one of global recognition can be swift and dazzling, and in at least some cases, may require a fraction of the resources and capital than previously deemed necessary.
Social media traction, innovative products, headline-making fundraising rounds, famous fans, and a creative or charismatic leader regularly prove to be invigorating circumstances that enable young startups to become well-known brands in a shorter time that it may have taken in a less digitally-connected world. With rapid rises to consumer consciousness inevitably comes bad actors looking to bank on the appeal of a buzzy young consumer goods company that has won over consumers across the globe thanks to a must-have product or an effective social media strategy.
Against that background, the longstanding assumption that cybersquatters are only looking to piggyback on the biggest brands – and thus, that only well-established brands like Nike or Gucci need to be aware of the risk of cybersquatting – ignores the fact that it currently takes less time for many brands to differentiate themselves from their competitors, and gain awareness on a large scale, and that this new timetable comes with consequences for young upstarts.
Juul is a clear illustration of this. Founded in May 2015, the Washington D.C.-based manufacturer of electronic cigarettes has grown at a breakneck pace, and before its “marketing missteps and its fractious relationships with regulators” got in the way, it went from generating $200 million in revenue in 2017 to $1.3 billion a year later, with even more growth on the horizon. “Thanks to a $2 billion investment from tobacco conglomerate Altria Group (owner of Phillip Morris and Nat Sherman, among others) [in 2018], the company’s founders became instant billionaires,” Max Berlinger wrote for Robb Report last year. This all happened before the company was even five years old.
In addition to nabbing a $38 billion valuation in the process, Juul garnered itself a name that was nearly as famous as some of the cigarette giants that predated it by more than 100 years, having won over hordes of (young) consumers across the U.S. and setting its sights on international growth.
Bad trademark actors saw an opportunity in the level of consumer recognition and demand for Juul’s products, and pounced, and web has since been infiltrated with counterfeit Juul devices and like-named websites that have no official ties to the company, itself. As a result, Juul has been forced, in just a few years, to initiate more than a hundred extrajudicial proceedings with the World Intellectual Property Organization (“WIPO”) aimed at ending the use of domain names containing its own trademark-protected name. The company has repeatedly called foul on the basis of unfair competition and misleading advertisement, and at the same time, has sought to obtain the transfer of the various unauthorized domain names. 100-plus proceedings initiated by Juul are largely unprecedented for a company of such a young ago.
Elsewhere in the market, another relatively young company has found itself in a position that has required it to face off against a slew of cybersquatters: Jacquemus.
The Paris-based fashion brand has risen through the ranks of the fashion industry and beyond thanks in large part to the “explosive growth” of its covetable accessories offerings, with the company’s sales doubling every year since 2017, and on track to have reached $20 million by the end of last year. From its meme-prompting mini Chiquito bags and its oversized straw Le Grand Chapeau Valensole hats to its famous fans, including Kim Kardashian, Selena Gomez, Kylie Jenner, and Bella Hadid, and big-name industry awards, Jacquemus is a prime example of a brand which, although barely over a decade old, has been thrust into the spotlight, and become a target of cybersquatters as a result.
The buzzy brand has been early to defend its name and valuable reputation against eager and unauthorized domain-filers in jurisdictions beyond its most immediate turf by way of proceedings under the Uniform Domain-Name Dispute-Resolution Policy (“UDRP”). The brand’s legal team has been prompted to initiate an array of proceedings in recent months and has landed favorable outcomes in a handful of matters, including some very recent ones. In each of those cases, Jacquemus argued that – and WIPO panelists found – that it owns “a considerable number of registrations for the JACQUEMUS trademark throughout the world,” and “has established rights over the mark JACQUEMUS internationally,” as well as “fame and renown” that “is inevitably linked to [its brand].”
In a handful of decisions issued as recently as last month, WIPO panelists ordered that the Jacquemus-bearing domain names be transferred from their unaffiliated owners – who were either actively using the domains to confuse consumers or were holding them passively, which may similarly “constitute bad faith,” according to the WIPO – to the brand. (These proceedings include D2020-2073, Jacquemus SAS v. Wenben Zhou (September 28, 2020), D2020-2076, Jacquemus SAS v. Michael Pe (September 24, 2020), and D2020-2063, Jacquemus SAS v. Privacy Administrator, Anonymize, Inc. (September 28, 2020)).
With the foregoing examples and countless others in mind, the enduring notion that only big brands need to be cognizant of the risk of cybersquatting is not nuanced enough to accurately represent the current reality for brands of varying size. In fact, well-established brands are hardly the only ones that are proving very attractive to cybersquatters, and start-ups are regularly being exposed to difficulties falling within the scope of intellectual property, including cybersquatting and counterfeiting. As such, brands of all sizes are encouraged to conduct an audit of their portfolio of domain names, with an emphasis on future development prospects, and to carry out surveillance at regular intervals in order to identify and eliminate possible instances of cybersquatting or counterfeiting.
Emmanuel Gillet is a lawyer who specializes in online brand protection and alternative methods of settling disputes relating to intellectual property rights. (Edits/additions courtesy of TFL)