By E. Susan Vogt , email@example.com
One of the biggest obstacles to electronic commerce is domain name regulation. In a perfect world, the owner of a well-known brand would have presumptive rights to Famousbrand.com or Famousbrand.ca. Not so in cyberspace. A domain name can be pirated by a cybersquatter or by an innocent third party who shares the famous name. The ca. domain is so problematic that some Canadians have taken to registering in the U.K. (Which is perfectly legal in cyberspace).
".ca" is the top-level domain for Canada. Every country has its own top-level domain identified by a two-letter suffix. As the Internet evolved, the U.S. regulators, a quasi-governmental group, delegated temporary authority for the .ca domain to a University of British Columbia professor.
For several years, he has been the sole gatekeeper to the .ca domain, and has instituted Draconian measures including a limit of one domain name per registrant. At long last, things are about to change. In the next few months, the Canadian Internet Registration Authority will take control of the .ca domain and establish new registration rules. Registrants will be allowed to own more than one .ca domain name (for example, Mattel.ca and Barbie.ca). There will be some protection, possibly a grace period, for the owners of well-known brands.
Trademark owners should be ready. If you want to operate in the new .ca domain, here are some suggestions. First, identify which brands are vital to your business. Register all of them as domain names. In addition, register likenesses of the names and obvious misspellings (Mattelcanada.ca, Barbi.ca).
Domain name registration is inexpensive compared to the costs of dealing with confusingly similar names which front pornography sites, or a competitors’ pages. You do not need to set up a web page or website for each and every domain name (or URL). They can all be linked to your primary website. This is simply a strategy for brand protection. The acquisition and management of domain names is an increasingly important part of intellectual property protection.
If you venture beyond the .ca domain into the popular, generic top-level domains - ".com", or ".net", for example - the ground has already shifted. Network Solutions, Inc. ("NSI") has recently signed agreements with the Internet Corporation of Assigned Names and Numbers ("ICANN") and the U.S. Department of Commerce. According to the ICANN-NSI Registry Agreement, NSI will continue to operate the registry for the .com, .net and top-level domains according to terms set by ICANN and will share with other ICANN-accredited Registrars access to the registry and the responsibility of domain name registration.
There will be competition among registrars on prices and services but the underlying problem remains: there are no uniform global rules for registering domain names or for resolving disputes between domain name and trademark owners.
In the absence of an effective dispute resolution procedure, the legal system has set the rules. In most jurisdictions, trademark laws will protect the owners of famous brands from cybersquatters. If a cybersquatter registers your well-known brand as a domain name, he/she will eventually be required, under trademark laws, to abandon their claims to the name. In fact, the U.S. Senate has recently passed an Anti-Cybersquatting bill which has retroactive effect and its penalties will include fines up to US $100,000. A number of actions relating to the Bill have already been initiated.
The more difficult cases arise with "innocent" parties who have competing claims to the same name. For example, "ty.com" registered by a computer consultant in the name of his son Ty and disputed by Ty, Inc., the makers of Beanie Babies. Trademark law allows the co-existence of multiple identical trademarks, provided they do not give rise to confusion in the marketplace. The system of assigning domain names, however, permits only one registration of any particular name per domain. Thus if Famousbrand.com is taken by a pirate or by a legitimate claimant, you will have to sue or negotiate to get the name back. Therein lies the problem if you want to protect your brands. It will cost a significant amount of money and aggravation to recover a domain name.
Because trademark laws do not support cybersquatters, they are generally less greedy than in the past. The going rate for the negotiated return of a domain name approximates the legal fees the trademark owner would have spent on litigation. This is not prohibitive for a single domain name. It becomes prohibitive when you are dealing with many pirated names. Porsche North America recently sued to recover approximately 130 domain names that infringe its famous trademarks. Although Porsche lost this case, the new U.S. bill includes the in rem remedy that Porsche unsuccessfully invoked.
Prevention is cheaper than the cure. All trademark owners should have a domain name strategy to protect their legacy brands - including those brands that may never be retransfigured as dot.com brands.
Susan Vogt practices in the Toronto Office's Intellectual Property Department, specializing in advertising law, and trade-mark and technology issues. She can be reached at (416) 862-5439 or by e-mail at firstname.lastname@example.org.
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