Trademarks and domain names: Who wins?

Trademarks and domain names: Who wins?

Recently a customer of ours was introduced to the world of competing interests in online real estate. In short, the customer had registered a trademark in the name of a service it provided, but its competitor registered the exact same name as its domain name. To make matters worse, the name was synonymous with a specific type of service offered in what is considered a very specialised industry. Consequently, online traffic destined for the trademarked customer's company was redirected to the competitor.

This is by no means a novel issue, but it is a growing one. A company’s website is the first port of call for customers looking to gain immediate access to its business, and vice versa. Unfortunately, there remains a lack of understanding among business owners on the importance of the rights and the protections associated with trademarks and domain name registration.

This article will offer some perspective to business owners on the legal implications that can flow from these sorts of issues.

Trademark v domain name
Naturally our customer’s first question was, “Can they do this?” In short, no.

Registering a domain name does not give you proprietary rights to the name. A party that registers a domain name does not own the name but holds a licence to use it for a specified period, subject to terms and conditions. The licence may be revoked by the domain name regulatory body (auDA) in instances of trademark infringement (see Remedies for Infringement below.)

All that is required to register a ‘.com.au’ and/or ‘.net.au’ domain is that it must exactly match or be an acronym or abbreviation of the registrant's company or trading name, trademark, or otherwise be closely and substantially connected to the registrant.

A trademark is defined as:

"a sign used, or intended to be used, to distinguish goods or services provided in the course of trade by a person from goods or services provided by any other person".

The owner of a registered trademark has the exclusive right to use and authorise the use of the trademark in relation to the goods and services for which the trademark was registered.

A registered trademark is a perpetual right which may be sold to or licensed for use to other parties. Following the payment of the registration fee a trademark may be renewed every 10 years, indefinitely.

The only way to claim ownership of a domain name is to have it trademarked. If the owner’s rights are infringed, then they generally have a right to have a third party remedy the infringement or seek compensation for the loss and damage caused by the infringement.

Remedies for infringement
The auDA: .au Domain Administration Ltd, is the policy authority and industry self-regulatory body for the .au domain space.

The auDA offers a Dispute Resolution Procedure (auDRP) that brand owners can use when their brands, marks and IP are registered by unauthorised third parties.

The purpose of the auDRP is to provide a cheaper, speedier alternative to litigation for the resolution of disputes between the registrant of a ‘.au’ domain name and a party with competing rights in the domain name.

The dispute is handled by an independent provider (the Provider) of dispute resolution services that is approved by the auDA.

Brief outline of the process:

• The Complainant (the trademark owner) makes a complaint in writing to the Provider.
• Provider reviews the complaint to ensure compliance with the auDRP’s provisions. If it does comply with these requirements, the Provider forwards the complaint to the Respondent (the entity that has registered the domain in dispute) within three calendar days.
• The Respondent must file a response within 20 days of receiving the complaint.
• A Panel is appointed by the auDA to referee the dispute. The Panel consists of either one or three members. If the Complainant elects to have a one member panel, the appropriate fee (currently $2,000) is paid by the Complainant. For a three member panel this fee is $4500.
• The Panel examines the case and the documents, and forwards its written decision to the Provider within 14 days of its appointment.
• Panel decisions under the auDRP are binding on both parties. There is no appeal process.

The remedies available to a Complainant are limited to requiring the cancellation of the domain name or the transfer of the domain name registration to the Complainant.

Unregistered trademarks
In Australia, some intellectual property rights can exist without registration, such as copyright and unregistered trademarks which have acquired a reputation. In these cases, there are two areas of protection.The first – common law – gives protection to those with a claim to unregistered trademark rights.

The act of ‘passing off’ protects the goodwill or reputation developed from the use of the unregistered trademark by the first trader, where another trader's conduct misleads or confuses a significant number of consumers.

An unregistered trademark does not provide any property rights in the trademark itself.  The most common remedy for passing off actions is an injunction ordering the other trader to stop using the trademark and/or damages.

The second area of protection is Misleading and Deceptive Conduct, which prohibits a corporation from engaging in conduct that is misleading or deceptive, or likely to mislead or deceive. The remedy for Misleading and Deceptive Conduct is typically damages.

A letter...
It is important to note that not every instance of trademark infringement is malicious and can occur by coincidence. More often than not a letter outlining your claim as the trademark owner to the alleged infringer proves to be the most efficient and cost-effective solution - as proved to be the case with our customer.

Nevertheless there will be instances where an apology and the removal of the domain name will not repair the financial damage caused.

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