In a rare trademark battle over an adult term, in a one man panel decision, the World Intellectual Property Organization ruled in the favor of the owner of the domain, VirtualSex.com, Network Telephone Services of Woodland Hills, California,  rejecting the claims of Digital Playground of Chatsworth, California, which owns the trademark, on the term “Virtual Sex”.

Digital Playground, which has a 40% market share of the DVD adult video market, claimed Network Telephone Services, purchased the domain in bad faith in 1995.

Digital Playground said they coined the phrase “Virtual Sex” in 1994 giving it a common law trademark, but did not apply to register a trademark on the term “Virtual Sex” until 2000.  The Trademark was granted in 2005.

Network Telephone Services claimed it did not know of the trademark and considered the “virtual sex” to be a generic term.

Although the panel agreed with Digital Playground that the domain was “confusingly similar” to the valid Virtual Sex trademark, the panelist ruled in favor of NTS because:

“””1.  NTS submitted a declaration that it had not heard of the Complainant when it registered the domain name and that it understood “virtual sex” to be a descriptive and generic term.

2.  Complainant did not bring this action until 14 years after Respondent had registered the domain name at issue and more than 13 years after Respondent had used the domain name at issue to resolve to a web site.

3.  The diverse offerings available on the web site VirtualSex.com suggest that Respondent is trading on the descriptiveness of the term “virtual sex,” rather than on the goodwill attached to Complainant’s mark.

Accordingly, the Panel finds that Complainant has failed to establish that the domain name at issue was registered and is being used in bad faith.”””

We believe this is a good decision.

Trademark holders who fail to timely act to protect their mark should be barred from claiming it at a much later date.  We have blogged about the legal theory of latches before, and how it should apply to claims for domains.

Basically in law, you can’t wait forever to bring a claim.  If you have a trademark and someone is infringing on it, you need to bring a claim against the offending party within a reasonable time after learning of the infringement.

Moreover, just taking a well know term and trademarking it, should not give the trademark holder any rights to the identical domain.

For example,  you should not be able to trademark the phrase “a pig in the poke”, or “a bird in the hand” and then go after the domain.

What existed first, the well known term or the trademarked term?

If the well known term existed first, then the phrase is generic, and the trademark should not give someone any right to claim the domain containing the famous phrase.

That’s my take.

Good decision.