Hershey Entertainment & Resorts, owner of The Hotel Hershey in Hershey, Pa., filed a domain name complaint with the National Arbitration Forum against Darien Hospitality Group, the operator of a nearby Howard Johnson hotel in Harrisburg.  Hershey Entertainment is the exclusive licensee of the federally registered trademark, Hershey, and the common-law trademark, The Hotel Hershey, both of which are used in connection with its luxury hotel, lodging and resort facilities.  For years, Hershey Entertainment has used the domain names hersheyhotel.com and hotelhershey.com.  Hershey Entertainment alleged that Darien registered the confusingly similar hersheyhotels.com domain name in bad faith and with knowledge of its marks. Ultimately, the three-member panel found that the disputed domain name was confusingly similar to Hershey Entertainment’s marks and that Darien’s registration and use of the disputed domain name was in bad faith in an attempt to attract and mislead Internet users to its Web site associated with the hersheyhotels.com domain name.  The panel ordered Darien to transfer ownership of the hersheyhotels.com domain name to Hershey Entertainment.

Businesses in the hospitality industry use targeted domain name registrations of business names and important trademarks as an integral and inexpensive marketing tool.  Often a customer’s first contact with a hospitality service is initiated with a simple Internet search for a hotel in San Francisco, a restaurant in Chapel Hill, or a theater in Philadelphia.  These searches can result in a huge variety of results and, unfortunately, provide fertile ground for third-party competitors looking to gain an advantage by pinching your company’s good name and valuable trademarks.  In addition, a substantial number of Internet users forego search engines to guess what they believe is your domain name.  This practice, called direct navigation, is a popular target for third-party competitors attempting to corral wayward Internet users by registering domain names similar to your domain names.  These misleading sites may be costing your business a substantial amount of income annually, all because your customers cannot find the Web site they were searching for in the first place.

As important as a good due diligence strategy is now, it will be essential in the near future, as domain name protection is likely to become more difficult.  The International Corporation for Names and Numbers (ICANN) is the non-profit entity responsible for managing the assignment of domain names and IP addresses. ICANN recently proposed a series of resolutions that would widely expand the commercial reach of the Internet.  One of these resolutions addresses generic top-level domains (gTLDs), which are domain names that use either the .com, .info, .net or .org domain designation.  These gTLDs are generally well known and widely considered the most popular types of domains. 

ICANN’s proposed expansion of these traditional gTLDs will allow the public to propose and register new gTLDs with ICANN.  The proposed ICANN resolution, which could take effect as early as 2009, permits seemingly limitless expansion of gTLDs and would have a profound effect on Internet marketing.  For instance, a premium hotel in New York City that currently owns and maintains a .com domain name for its hotel name may soon be faced with the decision of registering .hotel, .nyc, .newyork, .travel or even .spa, if the hotel has such a service. 

While the future of domain name registration and maintenance remains uncertain, one thing is for sure, simply owning domain names and maintaining Web sites associated with those domain names is not enough to protect your business on the Internet.  Having a due diligence plan is a vital step to ensure that your customers are not being diverted improperly to competitors’ Web sites.

Sean M. McGovern practices in the intellectual property, food industry and international law groups of McNees Wallace & Nurick LLC in Harrisburg, Pa. He may be reached at (717) 237-5406 or at smcgovern@mwn.com. This information provided is general and educational and not legal advice. For additional information, please visit www.hospitalitylawyer.com.