Working Paper No. 13-34:
White Blackbirds: Defining the Exceptional Cybersquatter

Author(s):

Joshua Cumby

Date Posted: May 2013

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Abstract:

This paper has two interrelated goals.  The first is resolution of a recent circuit split on the availability of attorney’s fees awards in trademark cases where the prevailing party seeks an award of statutory, rather than actual, damages.  A detailed review and analysis of both the relevant statutory text and the legislative history of the remedial provisions of the Lanham Act reveals that neither the text nor the intent and purpose of Congress in providing remedies in trademark disputes precludes a prevailing party who elects to receive statutory damages from also recovering attorney’s fees “in exceptional cases.”

The second goal of this paper is resolution of the issue presented in trademark cases brought under the Anticybersquatting Consumer Protection Act, or ACPA: what (or who) is the “exceptional” cybersquatter?  The Lanham Act’s “exceptional cases” provision is consistently interpreted by federal courts at both the trial and appellate levels to require malicious, fraudulent, deliberate, willful, or bad faith conduct on the part of the cybersquatter.  However, as defined in the ACPA, a cybersquatter has already shown “bad faith intent to profit,” and too often courts confuse that showing with the finding of extraordinarily culpable conduct required to make a case “exceptional” – a prerequisite to any discretionary award of attorney’s fees.  This paper argues that a clear distinction between the mere act of cybersquatting (based in part on a finding of “bad faith intent to profit”) and the extraordinary conduct justifying an attorney’s fees award (including bad faith and willfulness) is necessary to a proper interpretation and application of the Lanham Act and the ACPA.

Simply put, many courts seem to implicitly or explicitly assume that all cybersquatters are “exceptional,” and if all cybersquatters are “exceptional,” then none of them are.  As neither proposition is supported by the text, purpose, or intent of either the Lanham Act or the ACPA, this paper attempts to distinguish cybersquatters from “exceptional” cybersquatters by defining the latter and shedding much-needed light on this frequently decided but infrequently litigated question.