A Day Late and a Dollar Short

Well wouldn’t you know it, beaten to the punch, and by a Houstonian no less. It seems this Houston man has a line of refrigerator magnets and other materials dealing with issues of human sexuality and STDs (yeah, I want that on my fridge). He trademarked the word “sex” and has now won his battle with a Korean who registered the domain sex.biz. Read about it here. He won his argument because he was able to show that he had a legitimate business use for the trade name “sex” and therefore was allowed to preserve the internet domain name as well. It’s no longer a case of who registers the name first.

[Reprinted in full below]

So it would seem to me that in light of this new ruling, cybersquatters sitting on names of famous people certainly wouldn’t be able to show a more legitimate use of the domain than a so-named person. Will be interesting to see what else shakes out in the aftermath of this.

?2002 Law.com
Page printed from: http://www.law.com

Domain Name Owner Has Right to ‘Sex’
Brenda Sandburg
The Recorder
11-11-2002

Marcus Schatte owns sex, and he doesn’t want anyone to forget it.

The Houston man has been trying to prevent a businessman in Korea from using the sex.biz domain name. Schatte trademarked the word for several products he’s developed and argued he should have the Internet address too.

Though many intellectual property rights experts argue it’s a stretch, an arbitrator thinks Schatte has a good point. On Nov. 4 he gave Schatte the right to have sex — as a domain name.

“Although the mark SEX may be generic, complainant demonstrated to the United States Patent and Trademark Office that there is a distinctive, unique or secondary meaning to the mark and was granted full registration,” wrote Irving Perluss, the arbitrator. He issued the decision through the so-called Start-up Trademark Opposition Policy, which handles disputes relating to new top-level domains, such as .biz.

Despite the titillating nature of the trademark in question, attorneys said they were surprised that Schatte was given leeway to use his “sex” trademark to get a valuable piece of Internet real estate.

“The problem is, the panel said that if you have a trademark, you must have the right to preclude any use of the domain name,” said Professor Mark Lemley of the University of California, Berkeley’s Boalt Hall School of Law.

Lemley said there are many cases in which a common word is trademarked, such as “apple” for computers or “guess” for jeans. In such situations, he said, “You don’t get to own the word, but to prevent others from selling similar goods using the word.”

Schatte trademarked “sex” for a line of refrigerator magnets and “educational materials … in the fields of human sexuality and sexually transmitted diseases via audio, visual and printed media, and online via a global computer network,” Perluss’ opinion stated.

J. Thomas McCarthy, a professor at the University of San Francisco School of Law and author of a well-known treatise on trademark law, agreed that the decision is “a very expansive use of trademark rights.”

Domain names are generally issued on a first-come basis, as long as the person has a legitimate right to it, McCarthy said.

Perluss concluded that the original owner of sex.biz — Osan-si Kyounggi-do, who lives in Korea — did not have a legitimate claim to the domain name. He cited the owner’s lack of a trademark or service mark identical to the domain name and the lack of evidence that the owner intended to use the name to offer goods or services.

By contrast, he said, Schatte intends to use the domain name “for bona fide business purposes on the Internet.”

Lemley said he was also troubled by the judge’s decision that the original registrant acted in bad faith since he should have known someone else had a “sex” trademark. There was “no evidence” of that, Lemley said.

This isn’t the first time “sex” has caused domain name dysfunction. A legal battle settled last year over the sex.com domain name. That case involved the theft of the domain name from the original owner, who was first to register it.

The current case, however, touched on the rights a trademark confers.

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