A theoretical cause of action in which one claims that a trademark owner has used its trademark registration to unfairly promote its monopoly trademark rights. Although purely speculative at this point, some legal scholars have suggested that the owner of a trademark registration should lose their trademark registration if they engage in abusive tactics that violate the boundaries of fair competition. (See article). This doctrine was already applied successfully with respect to patents and copyrights, and thus has some precedential merit.
The trademark misuse theory was proposed most recently to address abuses occurring as a result of Network Solutions' earlier dispute resolution policy, which placed domain names on hold whenever a trademark owner with a federal registration went through the minimal procedural steps required to invoke the hold. Since Network Solutions' old dispute policy did not require proving infringement or even any likelihood of infringement, the old policy gave the trademark owner substantial leverage in negations to acquire a domain name. Proponents of the trademark misuse theory claimed that unless the trademark owner had a good faith believe that the domain name was infringing their trademark, invoking the hold policy was a misuse of their trademark registration. As such, the domain name owner should have a right under the misuse theory to have the court order cancellation of the trademark owner's trademark registration.
Abuses by some trademark owners of the earlier dispute policy was one of the reasons that Network Solutions was forced by ICANN to adopt a new dispute policy. Even though the old hold policy is no longer effective, the trademark misuse theory may still prove useful where a domain name owner is coerced into litigation or arbitration over a frivolous claim of infringement.
