Domain Name Rights
by Kate McCormick
Our guide to understanding domain name rights.
A domain name is a contractual right to use a particular web address. With so many modern businesses actively involved in e-commerce, a website is a valuable component of a business and is often its main portal to new customers. Having a domain name that reflects a business’s goodwill and brand image is therefore extremely important.
In order to obtain a domain name, you must apply to a registrar. Domain names are registered on a first come first served basis and each particular domain name can only be registered once. This is why the opportune registration of desirable domain names has become a profitable business in some cases. ‘Cybersquatting’ involves registering someone’s trade mark or personal name as a domain name in bad faith so as to oblige them to pay a premium for its transfer or use. Similar domain names may however, be registered and this can also pose a problem to businesses who find that competitors have registered domain names similar to their trade marks in order to benefit from their reputation or to cause them commercial damage.
There is now a Uniform Domain Name Dispute Resolution Policy (UDRP) which allows anyone to lodge a complaint with an approved dispute resolution service provider (such as the World Intellectual Property Organisation ‘WIPO’) against the registration of a domain name which is identical or confusingly similar to a trade mark (including an unregistered trade mark) owned by them. To succeed in a dispute, the complainant must establish that the respondent has no legitimate interest of his/her own in the name (e.g it is not his/her personal name) and has registered and used it in bad faith. This procedure allows unregistered trade mark owners to protect their marks without having to bring an expensive ‘passing off’ or defamation action in the courts.
Once a complaint is lodged, a panel of one or three independent adjudicators will decide whether the conditions above have been established and if so, will order the registrar to transfer or cancel the domain name registration. A decision will normally take between 30 and 60 days. Anyone registering a domain name with a registered provider will have signed a registration agreement to the effect that s/he will comply with any future judgment of a UDRP panel. Accredited registrars are obliged to implement the panel’s decision but some do not always comply.
In order to prove their case, the complainant will have to submit sufficient evidence to establish that they have common law rights in their unregistered trade mark. However, even where this is done, this does not mean that another person with a legitimate reason for registering the domain name and who uses it in good faith must give it up.
In order to be confusingly similar, the domain suffix is ignored. The content of the website arrived at by using the domain name is also irrelevant as it is the name itself that is compared with the complainant’s trade mark. This is because by the time the respondent’s web site is arrived at, the damage caused to the complainant’s business, for example through loss of potential customers, may well have been done.
To establish that the respondent has no prior rights in the domain name, the complainant must prove that s/he has not licensed or allowed the respondent to use the mark. S/he must also show a reasonably held belief that the respondent has not established any significant good will or common law rights of its own in the name, through legitimately using the name in connection with its business, prior to registration.
A further hurdle for the complainant is establishing bad faith on the part of the respondent. This will be a question of fact based on the evidence available but panels have developed a list of examples of bad faith and have taken a more hard-nosed approach recently. Examples include: the respondent having registered the name, intending to sell it to the complainant at a profit or to disrupt or damage the complainant’s business, or to prevent the complainant from acquiring the name, or to use it to gain from the complainant’s reputation, or the respondent failing to cooperate with the dispute resolution procedure. Difficulties may arise where the respondent has no particular knowledge of the applicant but engages in practices that result in an incidental registration of the complainant’s name, for example registering numerous names from a database or huge portfolios of domain names through automated software. However bad faith will often be evident if the respondent has done this in order to sell the domain names at an inflated price later. Evidence of bad faith is also necessary to contest ‘gripe names’ (for example ‘coca-colasucks.com’) in order to show that they are not established as a forum to air legitimate grievances about the complainant’s business but have been set up solely for commercial gain or to damage the complainant’s reputation.
Once the panel has made its decision, this will be communicated to the domain name registrar who may be asked to transfer or cancel the registration. There is no right for the complainant to appeal against a decision. The only recourse is for the complainant to take the case to court within ten days of the decision. Legal advice should always be sought as it is an offence to make a ‘groundless threat’ of trade mark infringement, under the Trade Marks Act 1994.
It may be possible to re-submit a complaint at a later date but only if there is new evidence, or if the first complaint did not comply with the procedural requirements or further infringing acts took place after the first complaint was raised.
The UDRP contains differences for different domains and should be read in full along with its accompanying rules. Certain domains also have their own additional dispute policies and rules to cater for their specific purposes, which should also be read. The UK registry, Nominet, has its own dispute resolution procedure which should be used for .co.uk registrations.
If you find that your business has become a victim of cybersquatting, you should consider carefully whether you wish to raise a complaint through the UDRP. Is the domain name in question commercially valuable to you and would its use by someone else pose a genuine commercial threat to your business? Also, consider whether bringing a court action for passing off or defamation would be more appropriate, although this will certainly be more costly. A UDRP complaint is not kept confidential and there is no right to damages, costs or injunctions to prevent use of the domain name pending the decision. If you lose, the respondent is unlikely to wish to sell the domain name to you and may even try to accuse you of using the Policy in bad faith. Writing to the owner of the domain name may be advisable at first, particularly where there is a risk that you may not have sufficient evidence to win a claim and it does not appear that they have registered the name in bad faith. You could enquire as to what price they would consider selling or licensing the domain name to you or ask them to include a link to your website or a disclaimer on their website explaining that they are not connected with your business. However, delaying in bringing a claim creates a risk of a hostile domain owner transferring the domain name to someone else, which is only prohibited once a complaint has been filed.
If you do wish to complain through the UDRP, you should seek legal advice as the complaint must comply with the formal requirements of the Policy including rigid time limits and word limits and must be structured carefully with appropriate evidence and references to previous UDRP decisions.
Taking preventative action to protect your trade marks and domain names is the best way to avoid damage to your business. You should purchase any domain names that will be essential to your business as soon as possible. Before doing so, conduct searches to establish whether any similar domain names have been registered or any registered or unregistered trade marks exist, whose owners could object to your registration. Such a trade mark search is also essential as a trade mark owner could seek to bring a separate action for ‘passing off’ or trade mark infringement as a result of your use of the name, even if they do not object to your registration of the domain name. You should also purchase any variations of the domain name that you may require (such as both .co.uk and .com versions) and consider registering certain common misspellings of your name to prevent ‘typographical squatters’ from benefiting from the accidental arrival of your customers at their page. If your preferred domain names have already been taken and the registered owner was not acting in bad faith, you should watch the registry for when those domain names lapse in case they are not renewed, allowing you to purchase them. Popular domain names can be purchased within just a few seconds after they become available so you must be quick. You should also watch for the possibility of extending your protection by registering under any new suffixes that become available, for example new country suffixes where you may intend to trade.
Make sure that you renew your domain names on time and do not rely on the registrar to remind you of the need to do this, in case your contact details become out of date. You should employ a watching service to monitor any similar domain names and/or trade marks that are subsequently registered which you may wish to object to. The rules for the ICANN dispute resolution procedure can be seen on the ICANN Website.