Thieves in the Temple? Prince Estate Files Cybersquatting Case vs. Prince.com

The latest in a string of suits filed by the estate of the recording artist Prince (Prince Estate), a New Jersey-based domain name trader, Domain Capital, is being accused of cybersquatting by the Prince Estate for registering the domain name <prince.com> (Paisley Park Enterprises, Inc. and Comerica Bank & Trust, NA as Personal Representative of the Estate of Prince Rogers Nelson v. Domain Capital LLC, 2: 18-cv-12044-JMV-JBC, US Disctrict Court, Disctrict of New Jersey). This domain name has two peculiarities. On the one hand, it is not used. On the other hand, it appears that by virtue of a leaseback financing agreement, Domain Capital, the current owner of the domain name, licensed it to the previous owner from whom it had acquired it.
The cybersquatting suit filed last 25 July 2018 alleges that Domain Capital’s ownership of <prince.com>  violates the Lanham Act, as expanded by the Anti-Cybersquatting Consumer Protection Act which grants a cause of action to trademark owners against those who, in bad faith or with intent to profit, register, traffic in, or use domain names that infringe the rights of those trademark owners.
Pursuant to § 1125(d)(I)(A) of the U.S.C.,
A person shall be liable in a civil action by the owner of a mark, including a personal name which is protected as a mark under this section, if, without regard to the goods or services of the parties, that person—
(i) has a bad faith intent to profit from that mark, including a personal name which is protected as a mark under this section; and
(ii) registers, traffics in, or uses a domain name that—
(I) in the case of a mark that is distinctive at the time of registration of the domain name, is identical or confusingly similar to that mark;
(II) in the case of a famous mark that is famous at the time of registration of the domain name, is identical or confusingly similar to or dilutive of that mark.
According to the Prince Estate, these conditions are met. The Prince Estate is seeking the transfer of ownership of the domain name <prince.com>, in addition to statutory and actual damages, and a permanent injunction against Domain Capital.
Furthermore, the Prince Estate alleges that Domain Capital trades in domain names by offering a lease-back program wherein a domain name owner will sell to Domain Capital their domain names and lease it from them, thereby increasing the level of privacy for the beneficial owner of the domain name.
Domain Capital is shown as not new to cybersquatting. The Prince Estate alleges that, on several previous occasions, Domain Capital has been ordered to transfer domain names to the complainant under the Uniform Domain Dispute Resolution Policy (UDRP) of WIPO due to registration of domain names in bad faith.
However, there is no doubt that the Prince Estate will have to overcome the argument based on the fact that the domain name refers to a generic word, which could come into conflict with the demonstration of bad faith. This aspect could explain the choice of the Prince Estate to engage in legal proceedings before the US judge and not in the UDRP. Indeed, the time of the judicial procedure, much longer than that of the UDRP procedure, can play in favour of the plaintiff.

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IP Twins collects evidence of cybersquatting acts. Our team can advise you on all matters relating to domain names. We can also represent you in out-of-court procedures (such as UDRP).