Australia: Cybersquatters – How to protect your brand from unwanted guests online

Last Updated: 10 March 2018
Article by Georgina Hey and Rebecca Brenikov

The internet is now the normal conduit for everyday personal, commercial and social transactions. It is more important than ever to ensure that your consumers know where to find your business online, and that no third parties are seeking to trade off your reputation in the online space.

Domain names are the primary form of online address. This creates potentially enormous value in domain names and makes them a tradable commodity. Domain names are particularly valuable if they wholly incorporate the trade mark (Google.com, Facebook.com, Amazon.com) of a business or if the domain name has the dual function of describing the activities of the business as well as comprising its trade mark (finder.com.au, carsales.com.au, comparethemarket.com.au). It has been long known that with this value comes risk for businesses. The pirates and kidnappers of old have been replaced by their equivalent in the digital age: cybersquatters.

Yet not all cybersquatters are the same;

  • The opportunistic cybersquatter – they simply see that a domain name containing a popular trade mark is available and register it;
  • The calculating cybersquatter – they actively troll domain name registries for domain names registrations that they can sell. Some even go so far as running algorithms to search domain name registers for lapsed domain name registrations, and re-register them the same day;
  • The business case cybersquatter – they see registering and selling domain names as a legitimate business. They often object to being called a cybersquatter, arguing they are entitled to register and sell domain names. Some literally hold thousands of domain names available for sale.

Regardless of the type of cybersquatter, there are a variety of options available to businesses to deal with these issues. In this article, we look at some of the pros and cons of the different options, and some recent domain disputes, to help you decide which option might be most appropriate for your business.

  1. Bring a complaint under the Uniform Dispute Resolution Policy (UDRP)

This can be the best method if:

  • the problematic domain name is a generic top level domain or gTLD (such as .com, .net and the like);
  • you have registered trade mark rights in the subject of the domain name, or a reputation that would ground a claim to the domain;
  • the registrant of the domain name has used a privacy agent to keep its identity hidden;
  • the registrant is using the domain name in bad faith (perhaps offering counterfeit products through the website on the domain name); and
  • you are only interested in the recovery of the domain name and not additional remedies

Lego is a prolific user of this service, having lodged 19 domain name complaints in 2017. In one such instance, Lego lodged a complaint against the domain name legointernet.com. The UDRP Panel determined that the domain should be transferred to Lego given the domain name contained an element that was confusingly similar to the LEGO trade mark, likely confusion with Lego's existing suite of domain names, and implicit bad faith, evidenced by the domain being used without authorisation.

  1. Bring a complaint under the Uniform Rapid Suspension System (URS)

The URS is a newer, faster and cheaper process than the UDRP. However, it is more limited as it requires a higher standard of proof and complainants are required to have a registered trade mark. The URS is a good method if:

  • your brand is a registered trade mark (or an unregistered mark that a court has validated);
  • the infringing domain is on a newer (post 2012) gTLDs (eg, .clothing, .bike and the like);
  • you need a quick turn-around and do not want to file complex submissions;
  • you want a cheaper resolution than that provided for by the UDRP (URS complaint fees start at $375, compared to $1300 for the UDRP)

Virgin Group recently used this procedure to suspend the operation of a number of 'Virgin' themed gTLDs, such as virgingalactic.group, being operated out of China. Despite Virgin's lack of presence in the commercial space industry in China, the Examiner ordered the suspension of the domains on the basis that Virgin's extensive brand recognition and portfolio of registered marks implied bad faith registration.

  1. Bring a complaint under the .au Dispute Resolution Policy (auDRP)

This can be the best method if:

  • the domain name is an .au domain;
  • the holder has no obvious rights in the domain name or does not fulfil the eligibility criteria for holding an .au domain; and
  • you do not necessarily have rights of your own in the domain name and do not wish to acquire the domain name itself, but merely want to prevent the current holder from having it.

A company called dkcb Pty Ltd opted to bring a auDRP complaint in 2017 (dkcb Pty Ltd v Eveready Pty Ltd). Eveready, a courier company, registered the domain name rushcouriers.com.au. dkcb complained to the auDA, stating the domain name clashed with their business name 'Rush Express', as well as their registered domain name rushexpress.com.au. dkcb had been trading for several years under the name 'Rush Express', and had incorporated the name into their emails and website, as well as on the side of their vans.

The auDA Panel found that Eveready's domain name was confusingly similar to dkcb's. The Panel also found that, as Eveready and dkcb operated within a short distance of each other in the same suburb of Sydney, Eveready must have been aware of dkcb's business and considered this enough to deem that Eveready had used the domain name in bad faith. The Panel ordered that the domain name be transferred to dkcb.

  1. Pay for it!

Although it can feel immensely unsatisfying at times, paying a cybersquatter for a domain name may, in some cases, be the most practical outcome in terms of time and costs. This is particularly so if your business does not have the time to wait for complaint decisions or is unsure whether a panel decision would go in your favour. There are now companies and private investigators that can act and negotiate with cybersquatters on your behalf. Using intermediaries can be useful if you are concerned that a cybersquatter, on knowing your interest in the domain name, may mysteriously increase the purchase price.

  1. Pick another domain name

This could be also be a more practical option if your business simply does not have the appetite or the capital to purchase the domain name, and if you believe that consumer confusion is unlikely.

For instance, BHP Billiton recently refused to pay an alleged $10 million to cybersquatters for south32.com, the name of its Perth-based metals and mining sister company. Instead the business opted for the domain name south32.net.

  1. Commence legal proceedings for trade mark infringement, passing off, and/or for breach of the misleading or deceptive conduct provisions of the Australian Consumer Law.

Today, domain name disputes being brought before the courts are less common, given the expense and time required for an outcome that can usually be achieved more efficiently by other methods. However, if the offender is engaging in a suite of intellectual property infringements, of which domain name squatting is just one, this may be the most appropriate course of action.

Take away comment

Given the value of domains is unlikely to diminish, cybersquatters and domain name disputes are not going to go away. However, over time different mechanisms have developed to make it simpler, easier and cheaper for businesses to deal with cybersquatting. The system isn't perfect, but if you are aware of the options open to you, a resolution can often be reached.

Businesses should also take proactive steps to ensure that they secure any domain names they actually want to use for their own businesses early, and then maintain those domains appropriately, to help avoid some of the potential cybersquatting issues arising.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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Authors
Georgina Hey
Rebecca Brenikov
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