Cybersquatters in a Sticky Situation

When in 2015 word broke out that entertainment giant Warner Brothers had filed new trademarks for “Space Jam,” the possibility of a sequel to the 1996 original seemed around the corner. The original movie grew out of Nike’s “Hare Jordan” campaign, which featured basketball legend Michael Jordan facing off in a one-on-one with beloved cartoon character Bugs Bunny. Picked up by Warner Brothers, Space Jam hit theaters on November 10th, 1996, and became a smash hit. The past 25 years have seasoned the live-action animation to be regarded as a classic. Unsurprisingly, any word of a sequel was set to be a big deal — especially for basketball fans. The 2015 buzz was not unfounded. Soon thereafter, Warner Brothers announced a partnership with SpringHill Entertainment, a company founded by none other than Lebron James, making him an executive producer in upcoming ventures. The partnership between a basketball legend and Warner Brothers seemingly confirmed Space Jam’s sequel even before James officially announced a 2021 release on Twitter. As of now, Space Jam 2 is set to release on July 16th. 

Last week, James gave fans a first look into the updated Toon Squad adding momentum to the buzz as he shared exclusive pictures of him on set. The excitement for the film has been long standing. So much so that about a year ago, advertising creative Hunter Fine and commercial director Peter Marquis bought the domain and, in a very literal interpretation of the name, began to sell fruit jam that “looks like space.” Why number 2? The duo claim, “Our first recipe didn’t look like space enough, so we perfected it with space jam recipe #2.” However, it doesn’t take long to piece together that the domain owners may have other goals in mind. Firstly, the homepage displays two products: their jam for $12.99 and their website for a slightly larger price tag of $1,000,000. The duo even produced their own “Space Jam 2 Trailer”, which showcases visuals from the farm as a couple talks about what makes their jam special. One of the reasons being that “you can also buy our website.” 

Coupled with the site’s ostensibly veiled tone, it is clear that the duo hopes for a Warner Brothers payout. According to Front Office Sports, “the ruse became a quarantine project,” the aim of which is a payday with most proceeds going to a sports-related charity. However, several factors may block their plan. Among which is the existence of cybersquatting laws. Tamara Kurtzman, founder at TMK attorneys and contributor at ABA’s Business Law section, notes, “a viable domain name, is not simply a luxury in today’s economy, but rather a corporate necessity without which a business is unable to effectively compete in the marketplace. The inability of a company to acquire a meaningful domain can therefore directly influence the success or failure of that business.” 

To address these concerns, the 1999 Anticybersquatting Consumer Protection Act (ACPA), specifically prevents “cybersquatters” from registering internet domains containing trademarks later to sell the domain name to the trademark owner. To gain relief by the ACPA, the domain name and the registration of the domain must have been registered in ‘bad-faith’ and must be identical or “confusingly similar” to a well-known trademark. As for the question of whether the duo registered the domain in bad faith, the jam front seems to be an attempt to offer legitimacy to their domain registration and sway any allegation of cybersquatting away. However, their subsequent commentary pretty much gives their motivations away, “When Hunter told me he secured, it just felt like, ‘Oh, we can do something really fun with this rather than just a straight extortion model,”  

Kurtzman points out that a viable domain name is a “corporate necessity” in today’s economy, but given Warner Brothers’ established influence coupled with Lebron James’ star-power, how necessary to sequel’s success is the domain, really? Perhaps this is why Warner Brothers have not yet commented on the situation, nor have they proceeded with any legal action. However, if they were to choose to seek action and to attain the domain, the case can be less straightforward than at first glance. Fine and Marquis may be participating in “anticipatory cybersquatting”, which is the practice of registering domain names with minimal present value in the hopes that these names will become desirable, and consequently increasingly valuable, in the future. Again, the existence of a physical jam for sale may hinder the argument that the domain has minimal present value; however, the advertising duo clearly has motives involving a $1,000,000 payout. Importantly, the ACPA doesn’t directly address the anticipatory nature of the cybersquatting exhibited in the Space Jam 2 case, potentially because this practice only gained popularity in the 2000s. Here, it may be relevant to take a closer look at what trademark law says. 

A trademark is usually deemed to belong to a party that uses the mark first in commerce. In other words, the party that first uses the mark in an ordinary course of trade (e.g., placed on containers/displays/documents, and sold or transported in commerce and on services in more than one State or abroad). Fine and Marquis started selling their jam before the release of the anticipated Space Jam sequel. Not to mention, the sequel’s full title is “Space Jam: A New Legacy” as opposed to “Space Jam 2”. This detail is kind of incongruous for the current domain holders.On the one hand, it may help them avoid cybersquatting charges, but it also provides even less incentive for Warner Brothers to proceed with a payout.

 All in all, it seems unlikely that Warner Brothers or James would proceed with a payout since the squatters occupying the Space Jam 2 domain don’t seem to present an exceptionally high obstruction to potential business. Even without the domain, the influence of Lebron James and Space Jam’s secure status is likely to guarantee a financially fruitful sequel. Of course, nothing is for certain, so it will be interesting to see how/if Warner Brothers or James proceed and whether the advertising duo stays in the jam business.