In theory, choosing a domain name is simple. If it is memorable, pronounceable, short, clever, easily spelled and suggests the nature of the commerce on your website, you’ve got yourself a winner. But even if your choice is brilliant from a marketing standpoint, it may not be so smart from a legal perspective.
If you choose a domain name that conflicts with any one of the millions of commercial names that already exist, you risk losing it. And if you’ve put money and sweat into marketing your website and then are forced to give the domain name up, your Web-based business is likely to suffer a damaging, if not fatal, blow. Trademarks that are descriptive and have achieved distinction through sales and advertising can be protected under the law. One trademark legally conflicts with another when the use of both trademarks is likely to confuse customers about the products or services, or their source.
If a legal conflict is found to exist, the later user will probably have to stop using the mark and may even have to pay the trademark owner damages
Applying these principles to your domain name selection, you are at risk of losing your chosen domain name if the owner of an existing trademark convinces a judge or arbitrator that your use of the domain name makes it likely that customers would be confused as to the source or quality of the products.
Sometimes similar domain names can cause customers to buy different goods or services than what they intended to buy. For instance, suppose, on the recommendation of a friend, you decide to purchase Lee’s famous Flamebrain barbecue sauce, which is sold only on the Web. You intend to type “flamebrain.com” into your browser but accidentally enter “flamerbrain.com” instead. You get a website run by Henry, who has both copied Lee’s idea to offer a barbecue sauce for sale on the Web and, with a very minor variation, the name of Lee’s sauce. You order two bottles, completely unaware that you ordered the wrong product from the wrong website. You get a barbecue sauce that is much inferior to Lee’s famous sauce.
Customer confusion matters only if a domain name that’s similar to the one you want to use is a protected trademark. To be protected, a trademark must be distinctive. A name may be distinctive because it is made up (chumbo.com for an online software store), arbitrary in the context of its use (apple.com for computer products), fanciful (ragingbull.com for investment advice) or suggestive of the underlying product or service (salon.com for an online magazine). If a domain name uses surnames, geographic names or common words that describe some aspect of the goods or services sold on the website (healthanswers.com for online health information) it is ineligible for trademark protection unless the owner can demonstrate distinction through substantial sales and advertising.