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Marcus Schatte owns “sex,” and he doesn’t want anyone to forget it. The Houston man has been trying to prevent a businessman in Korea from using the domain name sex.biz. Schatte trademarked the name for several products he’s developed and argues he should have the Internet address too. Though many intellectual property rights experts call that claim a stretch, an arbitrator believes that Schatte has a good point. On November 4 he gave Schatte the right to have sex–as a domain name. “Although the mark SEX may be generic, complainant demonstrated to the [U.S.] Patent and Trademark Office that there is a distinctive, unique, or secondary meaning to the mark and was granted full registration,” wrote the arbitrator, Irving Perluss. He issued the decision through the Start-up Trademark Opposition Policy service of the National Arbitration Forum, which handles disputes relating to domains with a “.biz” extension. Attorneys contacted acknowledge the titillating nature of the trademark in question. But they say they’re suprised that Schatte won the leeway to use his “sex” trademark to obtain a valuable piece of Internet real estate. “The problem is, the [arbitrator] said that if you have a trademark, you must have the right to preclude any use of the domain name,” says Mark Lemley of Boalt Hall School of Law at the University of California, Berkeley. Lemley says there are many cases in which a common word is trademarked, such as “apple” for computers or “guess” for jeans. But, he says, “you don’t get to own the word, [you get] to prevent others from selling similar goods using the word.” According to Perluss’s opinion, Schatte trademarked “sex” for a line of refrigerator magnets and “educational materials . . . in the fields of human sexuality and sexually transmitted diseases via audio, visual, and printed media and online via a global computer network.” J. Thomas McCarthy, a professor at the University of San Francisco School of Law and author of a well-known treatise on trademark law, agrees that the decision is “a very expansive use of trademark rights.” Domain names are generally issued on a first-come, first-served basis, as long as the person has a legitimate right to it, McCarthy says. Perluss concluded that the original owner of sex.biz–Osan-si Kyounggi-do, who lives in Korea–did not have a legitimate claim to the domain name. He cited the owner’s lack of a trademark or service mark identical to the domain name and a lack of evidence that the owner intended to use the name to offer goods or services. By contrast, he said, Schatte intended to use the domain name “for bona fide business purposes on the Internet.” Lemley says he was troubled by the judge’s decision that the original registrant had acted in bad faith, since that individual should have known that someone else had a “sex” trademark. There was no evidence of that, Lemley says. This isn’t the first time “sex” has caused domain name dysfunction. A legal battle was settled last year over the domain name sex.com. That case involved the theft of the domain name from its original owner, who was first to register it. Schatte’s case, in contrast, revolved around the rights that a trademark confers. This article originally appeared in The Recorder, a sibling publication of Corporate Counsel and a part of American Lawyer Media.

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