When a rival comes after your Web site domain

January 13, 2009: 2:05 PM ET

How to avoid Website trademark disputes, and where to turn when you run in to one.

Phil Schmidt, President, Capital Medical, Sacramento
I created a Web site in 2004 to help me sell medical equipment for a third-party manufacturer. Two years later a competitor trademarked [sic] my domain name. Recently the competitor threatened to sue me unless I shut down my Web site. They claim they have used my domain name since the 1990s to help them sell their product. They offered to pay me a nominal amount for the URL. Do I have to stop using my URL?

By Adriana Gardella, Fortune Small Business senior editor
Your situation presents a cautionary tale. The lesson? "Check the publicly accessible USPTO online database for registered trademarks, or consult a trademark attorney before adopting and using a domain name that may infringe on another's trademark rights," says Gayle Strong, an intellectual-property lawyer with the Denver office of Greenberg Traurig. Since it is already too late for that, we urge you to do the next best thing: Talk to a lawyer. To find one, you might start with the Sacramento County Bar Association, which has a referral service. Only a professional with a full understanding of the facts of your case can help you choose the best course of action.

That said, we can offer some insight into the possible issues raised by your question. Using the right language is a start. Your competitor did not "trademark" your domain name. Rather, it registered the trademark.

"The fact that your competitor did not register its trademark until after you registered your domain name is not controlling if the competitor was using its trademark nationally before you registered your domain name," says David Kelly, a partner with Finnegan Henderson Farabow Garrett & Dunner in Washington, D.C. He notes that merely registering a domain name will not give you the right to use it. "Your ability to use a domain name is subject to the prior trademark rights of others."

"The first user of a mark will typically be protected," explains David Burgert, chair of the IP group at Porter & Hedges in Houston. "As with most trademark issues, the key question is likelihood of confusion. In your case, it sounds like both parties make the same or similar products and use the same or similar trade name to market it. So consumer confusion between the two companies seems likely." Burgert says the question will probably become: Which one of you first used the name for the product?

This column provides general information only and is not intended to replace the services or legal advice of an attorney. Always consult a lawyer regarding any specific legal concerns, as laws vary from state to state.

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