Domain names are often chosen quickly and intuitively—based on how they sound, a marketing concept, or the name of the business. However, according to lawyers, this is precisely the stage where most mistakes are made: no one checks whether that or a similar name is already registered as a trademark, no one assesses whether a similar (identical) name is being used by other market participants, and sometimes a domain is even chosen that has no obvious connection to the company’s business or its name.
At first glance, these may seem like minor details, but they can later turn into real legal disputes—especially in cases where it turns out that an identical or very similar name is being used by a well-known company that holds a registered trademark and prior rights. In such situations, the domain owner may face a demand to transfer the domain, and the dispute is often resolved not in national courts but through a special international procedure. Sandra Mickienė, a senior attorney at the law firm AVOCAD, comments on these risks and their practical assessment.
She notes that disputes over domain names rarely arise immediately after registration—they typically emerge once the domain begins to “operate” in the market or becomes recognizable to third parties. In practice, several typical situations can be identified that most often give rise to claims:
First, the domain is actually put to use in commercial activities and becomes visible to consumers—for example, by creating a website, an online store, or a service platform. If such a domain is identical or confusingly similar to another business entity’s trademark, the trademark owner may take action to prevent consumer confusion;
Second, a dispute may arise even when a domain name is not actively used but is publicly visible—for example, when it redirects to a promotional page. In such cases, the question of whether such use exploits the reputation of third-party trademarks becomes particularly relevant;
Third, a situation of practical significance is the so-called “parked domain” model—where a domain is held without any apparent activity, but its name objectively matches a well-known trademark or is very similar to it. It is precisely these situations that often lead to conflicts, as trademark owners may view the holding of such a domain as a potential obstacle to the exercise of their rights or even as a speculative act.
To protect their interests, trademark owners in such cases typically do not turn to national courts but instead utilize a special international dispute resolution procedure administered by WIPO and based on the Uniform Domain Name Dispute Resolution Policy (UDRP) adopted by ICANN. It is this procedure that determines whether a domain may continue to be used lawfully or must instead be transferred to the holder of legitimate interests.
In UDRP proceedings, disputes are resolved based on a strictly defined evidentiary framework; the complainant must prove all three cumulative conditions, and if even one is not proven, the claim must be dismissed in its entirety. “The first element of the complainant’s case is that the disputed domain name is identical or confusingly similar to the trademark in which the complainant has rights. This assessment is made by comparing the dominant element of the trademark with the domain name. In practice, this means that even minor modifications—such as the addition of generic words, geographical terms, or variations in spelling—are often insufficient to negate similarity if the consumer still associates the domain name with the trademark,” the lawyer states.
The second element, she says, is the absence of the defendant’s rights or legitimate interests. When applying this criterion, a specific burden of proof applies: it is sufficient for the petitioner to present preliminary facts suggesting that there is no legitimate interest, and the defendant must then prove otherwise.
The third element is the bad-faith registration and use of the domain name. This is the most complex element and the one that most often determines the outcome of the dispute. The UDRP provides an illustrative list of situations involving bad faith, including the registration of a domain name with the intent to sell it to the trademark owner, the disruption of a competitor’s business, or the misleading of consumers regarding a connection with the complainant. The respondent’s defense in such cases must be constructed systematically, focusing on refuting at least one of the UDRP criteria; however, in practice, it is the justification of legitimate interests that carries the greatest weight. As provided for in the UDRP rules, when preparing a response to the complaint, the respondent must submit specific evidence confirming their rights or legitimate interests in the domain name.
The UDRP rules set forth a non-exhaustive list of circumstances which, if proven, allow the respondent to establish a legitimate interest. One such situation is where, prior to notification of the dispute, the respondent was already using the domain name or had commenced genuine and reasonable preparatory steps to use it in connection with legitimate business activities. WIPO practice emphasizes that such preparatory actions must be supported by objective evidence, such as business plans, investments, or contracts, rather than mere declarations.
Second, a legitimate interest may be based on the fact that the defendant (as a natural or legal person) is widely known by the same name (as the domain), even if they have not registered a trademark. In such cases, the actual recognition in the market is assessed, rather than merely the formal registration of the domain.
In addition to these criteria, analyzing the timing of the domain registration remains particularly important in practice. If the domain was registered before the applicant acquired rights to the trademark, it is usually difficult to prove that the registration was made in bad faith, which may result in the claim being dismissed. It is also assessed whether the domain has an independent meaning—such as a generic or descriptive one—and whether it was chosen independently of the applicant’s business activities.
However, according to a senior lawyer at AVOCAD, the fundamental practical rule remains the same— mere declarative explanations are not sufficient. The defendant’s position must be supported by consistent, objective, and document-based evidence that allows the panel to assess the actual use of the domain and the defendant’s intentions.
“Although at first glance it may seem that the burden of proof in UDRP proceedings falls more heavily on the complainant—after all, it is the complainant who bears the burden of proving that all three cumulative conditions are met— while the respondent need only refute at least one of them—in practice, the situation is far more complex,” notes S. Mickienė.
In cases where a domain was registered without conducting a preliminary analysis (in particular, without checking for the existence of an identical or confusingly similar registered trademark), and the business is operated without a clear business model, without retaining all documents related to the business, without having achieved significant market recognition, and with low turnover, it may be particularly difficult for the defendant to establish a legitimate interest. Even in the absence of an intentional attempt to exploit the reputation of another entity’s trademark or to mislead consumers, a lack of objective evidence (e.g., regarding actual business operations, investments, or readiness to use the domain) significantly weakens the defendant’s position.
An AVOCAD attorney also highlights the practical aspects of this procedure: upon receiving a complaint, the defendant often has to respond immediately within tight deadlines, assess the situation, and prepare a legally sound response. This usually means the need to engage lawyers who would analyze relevant WIPO practice, check trademark and domain databases, gather evidence, and prepare a well-reasoned position. Such actions inevitably entail additional time and financial costs.
“Choosing and registering a domain name should not be viewed as a mere formality or a secondary step. Failure to do the necessary ‘homework’ (i.e., checking trademark registries, assessing the market situation, and evaluating potential conflicts) this may later result not only in the risk of legal disputes but also in real costs associated with defense, potential loss of the domain, or the need to change the trademark and business identity,” warns Sandra Mickienė.
Therefore, according to her, a thorough legal review must be conducted during the domain selection stage: assessing trademark registry data for identical or confusingly similar marks, checking domain availability, as well as evaluating the overall market context and potential associations with existing businesses. Such an analysis should focus not only on formal similarities but also on potential consumer perception.
Furthermore, it is important that the chosen domain name has a clear and logical connection to the planned business activities and does not fall into the so-called “borderline similarity” zone with respect to other trademarks. The actual use of the domain is equally important—the domain should not be held passively. The conduct of actual business activities, a clearly defined business model, and supporting documents (e.g., contracts, investments, evidence of operations) can be of critical importance in assessing the existence of a legitimate interest and the outcome of a dispute.
