Cyprus: Trademarks v. Domain Names v. Trademarks = Bulk Of Leading Court decisions

A company's presence on the Internet starts with its domain name registration. The domain names registration system is usually administered by a non-governmental organization without any functional limitation. Domain names are registered on a first come first served basis without any verification regarding trademark rights that may exists for the domain name. Domain names themselves consist of two separate parts or levels: a top level domain and a second level domain. Top Level Domain names try to identify the type of entity that operates the individual network attached to the internet at that particular site. Second Level Domain names identify what site on the internet a user is visiting.1 In assigning a domain name, NSI uses a multi-level system including a Top Level Domain ("TLD") such as ".com" coupled with a Second Level Domain ("SLD") requested by the party seeking the domain assignment. Usually a company chooses words, names or well known trade marks in order to form its Second Level Domain and establish itself on the web by that domain name. In other words, the SLD often describes the actual name of the entity hosting the website or gives some indication as to the nature of the site. The domain name, beyond being the name under which the company sends and receives e-mail, like any other trademark or trade name it can be a symbol of the company's goodwill and recognition in the market place.2 It is the use of trademarks as SLDs that has led to the problem of domain name infringement.

On the other hand, it is widely accepted that without registration as a trademark, a business or corporate name is not fully and/or adequately protected. Trademarks serve the purpose of distinguishing and identifying the source of a product or service and are issued for one or a few categories of products or services at a time. By making products or services easier to identify trademarks also give manufactures an incentive to invest in the quality of their good. Use of a trademark is known as "trademark use". A registered trademark confers a bundle of exclusive rights upon the registered owner, including the right to exclusive use of the mark in relation to the products or services for which it is registered. Once trademark rights are established in a particular jurisdiction, these rights are generally only enforceable in that jurisdiction, a quality which is sometimes called as territoriality3. However, the laws of most jurisdictions allow a trademark owner to enforce its rights or interests in a trademark by preventing unauthorized trademark use. Trademarks are of the most important property assets and deserve appropriate protection. The trademarks' registration system is administered by a governmental authority on a territorial basis.

As the rapid development of the internet and the dramatically increasing of domain names, many interesting legal issues on domain names and protection of trademarks have arisen and in certain situations the two may overlap with unpredictable consequences.

The conveyance of domain names on a first-come first-served basis contributed to the domain name infringement. Many trademark owners were slow to register their trademarks as domain names; others, known as "cybersquatters" took that opportunity to "pirate" names, typically by obtaining SLD registrations within the .com TLD of a well known company name or brand hold them hostage and demand compensation from the trade mark owner.4

Following a massive attack by cybersquatters, attempts were made, by trademark holders to enforce their rights over domain names that were and are similar or identical to their existing trademarks. Thus, domain names have come into conflict with trademarks. More and more disputes between domain name holders and trademark owners have been taken before relative courts all over the world. It is not surprising that there are conflicting decisions among different jurisdictions and even within the same nation.

Many important issues arise out of this conflict; issues like whether registration of a domain name that is identical to a trademarked term is in and of itself a trademark infringement. What if a website contains someone's registered trademark? What if a domain name is similar to but not identical to some trademark? What if a domain name is actually a misspelling of a trademarked word or term?

The leading case is Panavision v. Toeppen5. Toeppen registered the panavision.com and approached Panavision to sell it. Rather than pay, Panavision sued Toeppen and won an injunction on a trademark dilution theory. The Court found commercial use because Toeppen's business was to reserve trademarks as domain names and then sell to the trademark owners.

Pirating on well known or famous trademarks and registering them as domain names is another issue. The ruling in BT v. One in a Million and others6 case, has provided authoritative guidance for the legal position of the registration of well known domain names. In 1996 and 1997, a company called One in a Million Ltd (OIAM) and others registered a number of domain names which included prestigious or well known names. The registrations took place without the consent of the companies owning the goodwill in the well known names. They then attempted to resell them posting details of availability on a website. The Court found for the Plaintiffs because the cybersquatters's activity amounted to a thread of passing off because it was a deliberate practice with a clear intent to deceive people as to the origin of the domain. This activity in itself constituted appropriation of the plaintiffs' goodwill.

In Harrods Ltd v. Network Services Limited, the plaintiffs had been approached for payment to relinquish the domain name by its unauthorized registrant. Harrods commenced proceedings for infringement, passing off and conspiracy, applying for summary judgment when no defense was filed. The defendants were not represented at the hearing. The trial judge accepted that passing of and trademarks principles were applicable to domain names and ordered the defendants to give up the domain harrods.com and to refrain from infringing or passing off its service as those of Harrods. However, the registration of a domain name without more does not amount to infringement of a mark similar to the name. Infringing acts occur when a domain name is used in website or other internet form of communication in connection with goods or services7.

In Playboy Enterprises v. Frena, the court determined that trademark law did apply to the posting and distribution over the internet of nude photographs taken by Frena bearing the Playboy and Playmate trademark. The court found that Frena's unauthorized use of the "bunny" trademark may lead to consumer confusion and thus his actions infringed upon Playboy's registered trademark. The Court thought the consumer may unwittingly think that the Playboy was the source of the photographs when in fact it was not, based on two factors: (1) the service provided was nearly identical to Playboy's; and (2) the symbol appearing on Frena's nude photographs was identical to that of Playboy's.8

In Affair Sapeso, the defendant registered its competitor's trademark as a .com domain. The French Court ordered the defendant to withdraw its domain name from the internet and enjoined the company from any further use of the trademark. The court held that the offending activity (domain registration) took place outside of France and that trademark rights are defined by territory was no bar to the court's authority since doing otherwise would allow trademark infringers to escape liability by simply registering in a foreign jurisdiction.

So, it is obvious from the above cases, that,in most of the times this problematic overlap occurs when a trade name or trade mark is used in or as a part of a second level domain.Indeed, in a domain name mark, consumers look to the second level domain to identify the source of that mark.

Domain names should be also registered as a trademark in order to protect the domain name more effectively. If a domain name has any source indicating significance, it can and must be registered as a trade mark or service mark. When a domain name as a whole is used as a trade mark or trade name, it rarely poses a problem. The World Intellectual Property Organisation (WIPO) recommends that even if the domain registration is prior to a trademark registration, a related dispute should be resolved in favor of a trademark holder. In fact, the perceived cachet of the domain names, in term of their symbolic, semiotic or brand value, has given sought-after domain names much more importance than their original and primary role as a mere navigational tool.

Domain name infringement poses a threat to the most basic objectives of trademark law. It seems, however, that much infringing activity has been stopped by lawsuits. Case law has established that trademark protection does apply to cyberspace. Many courts tried to expand the traditional trademark law to domain name cases. The precedents show that, all the courts in common law countries looked for a common law trade mark right enjoyed by either party. Most courts focused on cybersquatting and found that it was itself a sufficiently commercial use to reach into the area of trademark infringement. Quoting from Prof Mueller, "This expansion of trademark rights sets a dangerous precedent for the evolution of internet. It indicates that the central organizations used to allocate key internet resources can be capture by business interests with a predominantly regulatory agenda. By that, the distribution of internet domain names becomes linked to control of conduct. According to Prof. Mueller, important changes need to be made in the policies and laws regarding domain name- trademark conflicts9. In other words, a new DNS. I would agree with Prof. Mueller, who suggests that name registries be confined exclusively to the registration and transfer of domain names. Resolving disputes and regulating conflicts between trademarks and domain names should be left to other organization. Creation of more new top level domains also seems to be necessary. Carl Oppedahl, proposed to establish new top-level domains corresponding to each of the several dozen international trademark classifications. However, it is argued that, if such a proposal was implemented, trademark owners would like to protect possible future lines of business and therefore would proceed to register such domain names and keep those as hostage in case of starting the relevant business line.

Footnotes

1 See G. Peter Albert, Jr., Right on the mark: Defining the Nexus between Trademarks and Internet domainnames, 15 J. Marshall J. Computer and Info. L. 277, 279 (1997)

2 See Sally M.Abel, "Trademark Issues in Cyberspace:The Brave New Frontier", 5 Mich Telecomm. Tech. L. Rev. 91 (1999) 2

3 See Wikipedia, the free encyclopedia, http://en,wikipedia.org/wiki/Trademark

4 See Colby B. Springer, "Master of the domain (name): A history of domain name litigation and the emergence of the anticybersquatting consumer protection act and uniform dispute resolution policy. 17 Santa Clara Computer & High Technology Law Journal, May 2001

5 See Panavision Int'l, L.P. v. Toeppen, 945 F. Supp. 1296, 1304, 40U.S.P.Q 2d (BNA) 1908, 1914 (C.D.Cal.1996)

6 [1998] 4 All ER 476, [1999] RPC 1

7 Parenthood Fed'n of America v. Bucci, 42 U.S.P.Q.2d 1430, 1437 (S.D.N.Y)

8 See Playboy Enterprises v. Frena, 839 F. Supp. 1552, 1555 (M.D. Fla 1993

9 See Milton Mueller, Trademarks and Domain Names: Property Rights and institutional revolution in Cyberspace, Syracuse University of Information Studies, http://istweb.syr.edu/~mueller/study.html

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