Virtual Works, Inc. v. Volkswagen of America
Citation and Court
238 F.3d 264 (4th Cir. 2001), United States Court of Appeals for the Fourth Circuit
Facts
Virtual Works registered the domain name “vw.net” in 1996, before the Anticybersquatting Consumer Protection Act (ACPA). The principals of Virtual Works were aware of Volkswagen’s famous “VW” mark when they registered the domain name and hoped that Volkswagen would want to buy the domain. When Volkswagen demanded transfer, Virtual Works refused and Volkswagen sued under the ACPA.
Issue
Whether Virtual Works registered the domain name “vw.net” in bad faith with intent to profit from Volkswagen’s famous mark, subjecting it to liability under the ACPA.
Holding
The Fourth Circuit held that Virtual Works had registered the domain name in bad faith with intent to profit from Volkswagen’s mark and affirmed the district court’s order requiring transfer of the domain name.
Rule / Doctrine
The ACPA prohibits registration, trafficking in, or use of a domain name that is identical or confusingly similar to a distinctive or famous mark, done with a bad faith intent to profit. Courts consider nine non-exclusive factors to assess bad faith, including the registrant’s trademark rights, prior use of the domain, intent to divert customers, offer to sell the domain to the trademark owner for profit, and registration of multiple marks.
Significance
Virtual Works v. Volkswagen of America is a leading early ACPA case illustrating application of the bad faith factors to cybersquatting and establishing that awareness of a famous mark at the time of registration, combined with a hope of sale to the trademark owner, is strong evidence of bad faith intent to profit.