After being granted the rights to a domain name by registering the name with a Registrar, you receive a letter from a company or their Lawyer claiming to have rights in a Trademark, alleging your registration violates their Trademark rights and requesting it’s surrender or transfer to them. Are Trademark owners allowed to take your Domain Name which you have registered away from you under the the law?
THEFT OR STEALING APPLIES ONLY TO PROPERTY
The first thing to understand is that most people including business talk about ‘owning‘ a registered name as if it is legal property. However domain name law doesn’t ascribe the status of property to a registered name. The legal character of a name is a renewable form of permission or licence to use the name for a specified period of time under a Registration Agreement. By contrast, by law, property is something which can be owned, mortgaged, assigned, or bequeathed under a Will. Therefore a Domain Name cannot be legally stolen.
Only one Court has ever characterised a domain name as property. A registered name is like a telephone number or car registration plates. You have the right or permission to use them which you acquire from a licensing body, but they never really belong to you or are legally owned by you. Neither can you own a business name or a company name, as they don’t have the legal status of property, although if your business name, company name or personal name has been used as a trademark in trade or commerce and has acquired a reputation in the market for goods or services, it may have acquired what is known as common law trademark status.
There have been cases where a Domain Name holder has accused a Domain Name Registrar of being negligent and allowing their Domain Name to be fraudulently registered or stolen by a party who has submitted false papers to the Registrar. This occurred in the sex.com case in 1995, however this situation is not the focus of this article which discusses whether or not a person claiming they have Trademark rights in your Domain Name can take your name away from you.
HOW DOMAIN NAMES ARE ALLOCATED
Domain names are allocated on a first come first served basis. By contrast when an Applicant files a Trademark Application they are applying for a registered grant of legal property. Property can be stolen or subject to theft, not a revocable licence or permission. There are two ways a Trademark Owner can try to take your domain name away from you which often feels like theft as you are being deprived of something which you have purchased and may have put a lot of time, energy and effort into selecting. Domain name law consists of a number of different legal actions and administrative procedures which consider aspects of international trademark law, e-commerce and internet law to resolve domain name disputes.
1. SUBMITTING A COMPLAINT UNDER ICAAN’S DISPUTE RESOLUTION POLICY
A person asserting they have legal rights to your registered name under law cannot just ask you to surrender it to them. If you don’t believe the Trademark Owner has a sound claim, the Trademark Owner must either sue you in a Court of law to recover the name or have the dispute heard under the Internet Corporation for Assigned Names and Numbers (ICAAN) which created the Uniform Dispute Resolution Policy (UDRP). The Trademark Owner pays a filing fee of $1500 to have the matter heard before one Panelist or $4000 to request the matter be decided by three Panelists.
A Trademark owner can bring a Court action for what is called the tort of passing off, misleading and deceptive conduct, and trademark infringement.
Alternatively a Trademark owner can file an online dispute under the UDRP created by ICANN. When you sign up for a registration, nobody questions whether you are legally eligible to use name. Most people don’t search company registers, Trademark Registers and other sources to check whether their name might conflict with a Trademark which is in existence.
The UDRP Policy is one which you agree as a condition of your registration of your Domain Name to abide by when you purchase it and electronically sign a Registration Agreement. The Agreement says to your knowledge, your registration does not infringe upon or violate the rights of a third-party. It is your legal responsibility to ensure when you register a name you are not violating the law. The UDRP Policy contains rules to resolve disputes for most top-level generic domain names, although some countries will have their own Dispute Resolution Policies which vary slightly from the UDRP Rules. Therefore it is important to consult the relevant Registration Agreement to acquaint yourself with the Rules which will be applied to your dispute.
You also agree to submit to a mandatory legal proceeding called arbitration by an Approved or Accredited Dispute Resolution Provider if a disagreement arises. A complaint can be filed online by a Trademark Owner who says you are using their Trademark unlawfully and the dispute will be registered and sent to you via email at the address listed under your whois information. It is important to keep your whois registration details up to date.
The whole procedure takes place online and no oral evidence is heard, unless there are exceptional circumstances. The dispute usually is heard in the language of the Registration Agreement. Only written submissions of both parties are considered and a decision may be available within sixty days. There are no legal costs under this procedure nor does the Respondent have to pay the Complainant’s legal costs even if they lose the dispute. Registrants can represent themselves, hire a Lawyer or a specialist. Either party can appeal the decision of the Arbitrator to a Court of Law within 10 days if dissatisfied with the decision.
Before an Arbitrator approved to hear disputes under the UDRP Policy will cancel, suspend, or transfer a domain name, the Trademark Owner must satisfy them of each and every one of the following under the UDRP Rules: –
1. the trademark owner owns a trademark (either registered or unregistered) that is the same or confusingly similar to the registered second level domain name;
2. the party that registered the domain name has no legitimate right or interest in the domain name; and
3. the domain name was registered and used in bad faith
These requirements are listed under para 4 of the Policy.
The Trademark Owner has to submit proof of either a Certificate of Registration of their Trademark to the Panel or evidence they have a common law trademark acquired by prior usage which is confusingly similar or identical to the name in dispute. The Panel only looks at the name to the left of the.com or.net suffix in evaluating the names. Also, if the Respondent has only added a generic word such as ‘online’ or a ‘geographic indicator’ to an otherwise identical trademark, this addition won’t prevent the domain name being evaluated as confusingly similar to the Trademark.
If the Trademark Owner proves element one, the burden of proof shifts to the holder of the name to prove element two. The UDRP Rules in para 4 (c) list the criteria to determine whether the domain name holder has a legitimate right or interest in the domain name based on the evidence, facts and quality of legal argument. For example, one of the factors is whether, prior to receiving notice of the dispute, they had been preparing to use the name to sell goods or services in good faith. If the website hasn’t been developed yet this might involve submitting evidence of a business plan.
Another factor is whether as an individual, company or business entity, a registrant has been known by a name that corresponds to the domain name. An alternative consideration is whether you are legitimately using the name in a non-commercial way for some other legitimate purpose. For instance some people set up fan sites to honour their favourite sports star, celebrity or set up a review, parody site, or a political site, which can be regarded as fair use. An important factor may be whether the site was set up with an intention to profit from the Trademark by misleading consumers into thinking that there is some connection between yourself and the trademark owner or is ruining their image.
The Panel will review evidence to decide whether you have both registered and used a name in bad faith under domain law, which includes buying it with the intention of selling it back at an inflated price to either the Trademark owner or a third-party. The Panel may look at any previous patterns of conduct in your registrations, and whether you are using the domain name to deprive the Trademark owner of the opportunity to use their trademark in a website address, or deliberately diverting their traffic to your website by creating confusion in consumers minds that you are associated with the Trademark Owner.
It is hard to state exhaustively how all the domain name laws are applied in practice, but you can get a better understanding of the way the Arbitrators apply the rules by reading both the Dispute Resolution Policy and the index of decisions available on the internet under the World Intellectual Property Dispute (WIPO) website. This will help you formulate your factual and legal arguments. As a Respondent you must file your Response within 20 days of the commencement of the administrative proceeding otherwise you will be in default and the dispute will be heard based only on the Complainant’s submissions..
The process if faster, cheaper and informal than going to Court and the Panelists are experts in domain name law, trademark law, internet law and e-commerce.
However it is still open to the Respondent to bring Court action to have the domain name law dispute decided.
2. BRINGING COURT ACTION IN THE COURTS
Most decisions which have been heard in the Courts have involved causes of action such as trade mark infringement, or unregistered trade mark infringement, otherwise known as the tort of passing off, frequently coupled with an action for breach of Trade Practices law in Australia or unfair competition legislation in the United States.
America has enacted legislation specific to cyber law called the Anti-Cybersquatting Consumer Law Protection Act 1999 which allows a dispute to be brought in the US Courts against a foreign national under some circumstances. It was designed with the intent of preventing people registering, trafficking in or using a name confusing similar to, or which dilutes the Trademark owner’s mark or name.
Bringing action in any Court whether jurisdiction in a US Court or the Court of another country can be satisfied involves delay, expense and uncertainty when it comes to enforcing judgement.
However some Trademark Owners bring Court claims as there are remedies available other than the cancellation or transfer of the domain name, such as damages and under exceptional circumstances Lawyer’s costs.
Whilst Trademark Owners can sometimes try to steal your name from you, this is not the way the law characterises the rights of the Trademark Owner when they bring a dispute either in the Courts or through the administrative online procedure. Whether they succeed in taking your name from you depends on all the facts and circumstances and the manner in which you argue your case.