In July 2008, the United States Olympic Committee (USOC) and Chicago 2016, a non-profit corporation responsible for the preparation, submission, and negotiation of a bid application to bring the 2016 Olympic Games to Chicago, filed an administrative complaint with the WIPO Arbitration and Mediation Center against Stephen Frayne under the Uniform Domain Name Dispute Resolution Policy (UDRP). They alleged that Frayne had violated the UDRP by registering and using the domain name chicago2016.com in "bad faith."

Frayne, a grad student at North­western’s Kellogg School of Management, registered the chicago2016.com domain name in 2004, two years before Chicago made a bid for the 2016 Olympic Games and two years before Chicago 2016 filed to register "CHICAGO 2016" as a trademark (the mark was registered on April 22, 2008). He uses the domain name in connection with a website forum designed to provide a "comprehensive, balanced discussion about the Chicago 2016 Olympic bid." The site hosts economic analysis and articles by local residents on the "economic and safety issues associated with the Olympics and their impact on Chicago and surrounding areas." Chicago 2016 and USOC initiated the WIPO action after unsuccessfully attempting to persuade Frayne to sell the domain name to them.

After the WIPO action commenced, Frayne filed a lawsuit in federal court in Illinois, seeking a declaration that his use of chicago2016.com did not infringe Chicago 2016 and USOC's trademark, that he had not violated the Ted Stevens Olympic and Amateur Sports Act (which protects certain trademarks associated with the Olympics), and that his use did not constitute cybersquatting under the Anticybersquatting Consumer Protection Act (ACPA). He also claimed that Chicago 2016 had violated his constitutional rights, and that Chicago 2016 and USOC had engaged in reverse domain name hijacking and attempted reverse domain name hijacking.

USOC and Chicago 2016 filed counterclaims, alleging trademark infringement, violations of the Ted Stevens Act, and cybersquatting. They successfully moved to dismiss Frayne's reverse domain name hijacking claims, but the district court denied their motion to dismiss Frayne's other claims.