When Companies Merge, Cybersquatters Emerge

Big corporate mergers sometimes create big domain name headaches. Aside from increasing the burden and expense of managing a potentially extra-large portfolio of domain name registrations, a prominent merger can alert cybersquatters about new opportunities. This is especially true when the merger is -- as is usually the case -- announced before completion and when the deal is quite large.

For example, the recently announced $15.4 billion deal between Newell Rubbermaid and Jarden will, as The Wall Street Journal reported, combine such high-profile brands as Sharpie markers and Baby Jogger strollers with Rawlings baseball gloves and Mr. Coffee machines. And the $16.5 billion deal between Johnson Controls and Tyco will bring together prominent brands from the automotive and HVAC industries with security and fire-suppression products.

Big corporate mergers are nothing new, of course. But companies are wise to consider important domain name issues as a part of the process.

Many well-known companies have failed to register domain names that contain obvious trademark combinations created by a merger. In many cases, the companies resorted to filing complaints under the Uniform Domain Name Dispute Resolution Policy (UDRP) to obtain control of those domain names:

  • Before Chevron and Texaco announced that their merged company would be known as "ChevronTexaco," a cybersquatter registered the domain names <chevrontexaco.info> and <chevrontexaco.org>. In finding that the registrant acted in bad faith, the UDRP panel wrote: "Despite Respondent’s protestations that it had no idea that Complainant was going to choose the name CHEVRONTEXACO for its merged company, Respondent admits that it was fully aware that both marks were registered trademarks of the Complainant. Further, proof submitted by Respondent shows that he closely monitored and was fully aware of the merger activities of the Complainant, and of the likelihood that CHEVRONTEXACO would be used as Complainant’s name and mark."
  • On the same date that information leaked about a merger between Thermo Electron and Fisher Scientific, a cybersquatter registered the domain names <thermofisherscientific.com> and <fisherthermo.com>. In their UDRP complaint, the companies argued that the registrant of the domain names was "opportunistically engaged in bad faith registration," and the panel agreed -- calling the timing of registration "a compelling indication of bad faith."
  • Not all merger-related domain name issues involve well-known global corporations. In 2005, according to a UDRP decision, the Nordic media "widely reported" that a company in Finland known as Orion Corporation  "planned to demerge into two separate companies, one of which would be Oriola-KD Corporation" -- which promptly encouraged one cybersquatter to register the domain name <oriola-kd.com>. The UDRP panel said the domain name registration was nothing more than "an opportunist act by an alert entrepreneur with a view to making a profit."

These same issues arise not only during corporate mergers but also when information about highly anticipated products is leaked. For example, a cybersquatter registered the domain name <amazonfirephone.us> only "days after publication of an article on the tech website BGR under the headline, 'Insider reveals launch timing and specs for mysterious Amazon smartphone,' and the same day on which Complainant filed applications to register the trademark AMAZON FIRE with the USPTO [U.S. Patent and Trademark Office]."  (Disclosure, I represented Amazon.) The dispute panel called this "opportunistic bad faith."

While all of these disputes ultimately resulted in transfers of the relevant domain names to their trademark owners, the legal proceedings created expenses and delays.

Of course, it's impossible to anticipate every possible trademark combination, typo and top-level domain name that will lead to a dispute; so, it's impossible to avoid every potential cybersquatting problem created by a merger or new product. Fortunately, when those problems inevitably arise, trademark owners can use the UDRP and other dispute policies to reclaim their domain names.