Does absence of profit guarantee no violation of anti-squatting laws is the US?

Question

I recently bought a celebrity website for $400 on godaddy. It was a "sale" auction. I did it just for fun without any profit motives. In addition I was not aware of the anti-squatting laws.

Today I read an article about anti-squatting. That's rough. Regret i bought it in the first place. So now I want to get rid of this burden and return my money.

Can I sell it for $420? Godaddy will charge a commission. I'll end up with my $400.

Here is the extract from the law:

Under the newly enacted section 43(d) of the Lanham Act, trademark holders now have a cause of action against anyone who, with a bad faith intent to profit from the goodwill of another's trademark, registers, traffics in, or uses a domain name that is identical to, or confusingly similar to a distinctive mark, or dilutive of a famous mark, without regard to the goods or services of the parties.

If there is no profit, then it's okay right?

Answer 1

15 U.S.C. 1125, opens one up to civil action by the owner of the mark if with "a bad faith intent to profit from that mark" one "registers, traffics in, or uses a domain name". Also, it does not matter what goods and services are provided by the parties, since the law specifically disregards that element of "similarity". As long as you do nothing with the domain other than dispose of it making no monetary profit, it might be difficult (not impossible) to prove that you had a bad faith intent to profit. However, the law does not just apply to actually profitable transactions, it applies to e.g. registering a domain with the intent to profit. Such an intent could be established using social media sources, if inculpatory statements were made, e.g. tweeting "Gonna make Taylor pay a million for her website".

It is impossible to know whether bad faith intent to profit would be found, though an experience attorney could give a professional guess. Immediately after subsection (A), subsection (B) gives a long and non-exhaustive list of factors establishing bad faith intent, such as (VI):

the person’s offer to transfer, sell, or otherwise assign the domain name to the mark owner or any third party for financial gain without having used, or having an intent to use, the domain name in the bona fide offering of any goods or services

The law does not say whether such a fact would tend to support a bad faith accusation, or tend to defend against it, so that would be up to the court to decide. There is a defense under the law, if the court determines that

the person believed and had reasonable grounds to believe that the use of the domain name was a fair use or otherwise lawful

Only the owner of the mark can pursue such a legal action, under the law, and the company is generally not liable for vending tainted goods, per (d)(2)(D)(ii):

The domain name registrar or registry or other domain name authority shall not be liable for injunctive or monetary relief under this paragraph except in the case of bad faith or reckless disregard, which includes a willful failure to comply with any such court order.

Answer 2

Profit should probably not be taken too literally in this case. "Profit from the goodwill of" could also reasonable be interpreted to mean "benefit from" even without monetary gain, because the publicity associated with someone's trademark has money value even though it isn't in the form of money.

Also, keep in mind that, in general, a celebrity's name is not protected by trademark and is instead protected by a common law right of publicity. So, squatting on the domain of a non-trademarked celebrity name, even if that is legally protectable as well, doesn't necessarily violate this particular anti-squatting statute.