Mickey D Does Espresso Pronto

Dear Rich: I have a coffee business and called it 'espresso pronto.' I failed to get a trademark for it. But I did get a domain name associated with it (the dot com version). A couple of years ago McDonald's decided to get into coffee and chose my business name and got a trademark for it. I changed my business name but kept the domain name. Now I have received a letter from McDonalds stating that not only do they want me to stop promoting my domain but they want ownership of it. Can they do this? Frankly, as much as we'd hate to get involved in a dispute with the folks who invented the "Happy Meal," we're not clear who has the rights to the domain. You'll need to go through the long answer (below). 

WIPO Rules. Under domain name arbitration rules, if McDonald's has a trademark for "espresso pronto" and they can demonstrate that you registered or acquired the domain name in "bad faith," then they'll have a legal basis to acquire that domain from you. What's bad faith? It's if you own the domain primarily for the purpose of selling, renting, or otherwise transferring it back to the trademark owner (or to a competitor) for more than you paid -- in other words, if you're trying to capitalize on McDonald's trademark rights.

Who Has Trademark Rights? We're not clear what trademark rights McDonald's has to the mark. Although some websites use the "R" in a circle to describe the Espresso Pronto product, we're not seeing any U.S. federal registration (or applications) for the terms and the product is not listed on McDonald's U.S. menu. We did find references to it in New Zealand and we found two trademark applications in New Zealand's TM database for the term. Both were filed by McD Asia Pacific, apparently the Singapore subsidiary of the U.S. company. One application was abandoned and the other is currently under examination. So, perhaps we should assume you're writing to us from New Zealand? (That would be exciting. The Dear Rich Staff once traveled to Kiwi country and had a great time.) 

Playing by NZ Rules. We couldn't determine whether New Zealand has a cybersquatting law, but the international rules cited above would apply for ICANN arbitrations. You say you failed to acquire trademark rights to the term when you used it. We're not sure what you mean -- as any first use in commerce generally establishes common law trademark rights --but in any case, the fact that you no longer use the term does not help your case and may hurt it. Your case could also run into problems if McDonald's has evidence that you are offering to sell the domain at a profit to others - particularly a coffee-making competitor. If you're not offering to sell it for a profit and there's no evidence of bad faith, then McDonald's legal basis for seeking the domain appears misguided.