The US$3.3 million dollar sale of the domain name "wine.com" in San Francisco earlier this year is believed to be the highest price paid for a domain name to date. Domain names have become increasingly valuable as demand has risen with the exponential growth in commerce on the Internet. Not surprisingly, this environment has given rise to many disputes between trade mark owners and domain name holders.
This article surveys the types of disputes that have arisen and the key issues to be addressed in order to establish trade mark infringement by an unauthorised use of domain names under the Trade Marks Act 1995 ("the Act") in Australia.
The first issue to address is what domain names are, and how they compare to trade marks.
A domain name is an easily recalled form of an Internet Protocol (IP) address. The purpose of the IP address is to enable communication across the World Wide Web by uniquely identifying each computer on the network.
Generally, domain names are allocated on a "first come, first served" basis. In the case of the ".com.au" domain space, the policy of the administrator (auDA) has the following key features:
- domain names are allocated on a first come first served basis;
- domain names are (subject to a few exceptions) only licensed to an applicant if the name is derived from a registered Australian business or company name held by the applicant;
- the applicant does not have to show any evidence of use of the name to be registered; and
- ownership of a trade mark alone will not entitle a trade mark owner to obtain a domain name which incorporates their trade mark.
Trade mark owners have overcome these restrictions by registering their trade marks as business or company names, for the purpose of obtaining a domain name registration. (In doing so, however, they must then comply with the requirements of the business and companies legislation.)
As there is no online directory of domain names, consumers make intuitive guesses as to a trader's domain name. Therefore there are obvious advantages for traders who use their trade marks as part of their domain name.
A trade mark may be simply described as a "badge of origin", as it serves to distinguish the goods or services of one trader from those of other traders.
Unlike domain names, which are unique, in some circumstances the same trade mark may be used by multiple parties in relation to unrelated goods or services and where there is no likelihood of deception or confusion (eg "Apple" for computers and "Apple" for records). Further, unlike domain names, the registration of trade marks requires the applicant to show use or intended use of the mark.
Registration of a trade mark gives the trade mark owner the right to prevent others from using a substantially identical or deceptively similar mark, as a trade mark, in relation to the same or similar goods or services in the course of trade. This protection extends to unrelated goods or services for owners of "well-known" marks in Australia.
The inherent differences between the two registration systems and the exclusive rights given to trade mark owners have led to many disputes between trade mark owners and domain name registrants. The disputes broadly fall into three types - "Cybersquatter", "User" and "Twin" disputes.
"Cybersquatters" speculatively register and stockpile a number of well-known marks as domain names and then attempt to sell them for a substantial profit to the registered trade mark owner, but do not otherwise "use" the mark. Cybersquatter disputes have led to legislative changes in the US (Anti-cybersquatting Consumer Protection Act (S.1255)) and many well-publicised decisions in the US, the UK and (to a lesser extent) New Zealand.
In the One in a Million case, the UK Court of Appeal held that by merely dealing in domain names which were confusingly similar to registered trade marks, the cybersquatter was liable for trade mark infringement under section 10(3) of the UK Trade Marks Act.
Under the Australian Act however it will be more difficult to establish that cybersquatter activity will constitute trade mark infringement for two main reasons. First, because our Act expressly requires that the offending mark is used "as a trade mark", that is, as a "badge of origin" to distinguish the goods or services. Secondly, because the mark must be used in relation to the right goods or services. This second requirement will not apply for "well-known" marks.
"Users" register and use marks as domain names with a view to trading off the goodwill associated with the mark or alternatively causing some damage to the reputation of a competitor's trade mark.
In these situations, it should be easier to establish trade mark infringement under the Australian Act, than in the cybersquatting example, as the two main elements referred to above are likely to be satisfied.
"Twin" disputes arise where two traders have legitimate rights to use the same trade mark and both attempt to secure the same domain name. Typically, one trader seeks to register their trade mark as a domain name but finds that he or she is unable to do so because the other has beaten them to it.
Although the second trader may have a stronger claim to the trade mark, through use or an earlier priority date, cases in this area have tended to show that the courts are unable to assist "we-wish-we'd-registered-first" litigants.
While the prevention and resolution of these disputes ultimately depends on changes to the Domain Name System, a practical solution in the "Twins" dispute scenario may be to negotiate the shared use of the domain name through a gateway page or another form of online directory.
If a domain name is infringing a registered trade mark, the most important remedy will be an injunction restraining continued use of the domain name and requiring cancellation or transfer of the domain name. Other remedies include damages and an account of profits.
The majority of domain name cases are in fact resolved by negotiated settlement. Practical solutions require a creative approach to resolving competing interests, for example, through the use of shared websites and gateway pages.
In April 1999, The World Intellectual Property Organisation ("WIPO") released its final report on reform to the Internet domain name system. The recommendations were aimed at minimising the conflict between intellectual property rights and domain names. These include added protection for well-known marks, a requirement for use and the establishment by registries of domain name directories including accurate "real world" location details of their holders.
WIPO has also proposed a broadening of the scope of protection available to the owners of well-known marks against unauthorised users.
If these proposals are adopted in Australia, owners of registered trade marks will be in a much stronger position to defeat unauthorised holders of domain names including in the cybersquatter situation.
To protect the value and validity of their registered trade marks, it is important for trade mark owners to be vigilant in the protection of their trade marks on the Internet. This includes acting to secure domain names which incorporate their most valued trade marks on the most commercially valuable domains and the regular auditing of those domains to detect any misuse or unauthorised use of their trade marks.
This article provides a summary only of the subject matter covered, without the assumption of a duty of care by Freehill Hollingdale & Page. The summary is not intended to be nor should be relied on as a substitute for legal or other professional advice.
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