The rapid growth of the Internet has created rich pickings for the unscrupulous who take advantage of companies’ goodwill and trademarks – so much so that it has become increasingly important for business owners to register their domain names promptly to ensure that their brands and trademarks are protected on the Internet.
If this is not done businesses may be dragged into unnecessary and costly litigation, warns Mia Krog of Shepstone & Wylie.
A domain name is the address of a web site. Domain name disputes typically arise because the applicant is not required on registration to show that it has any rights to the name.
This makes it possible for a person to register a domain name which is identical or confusingly similar to another company name or trademark. It is not impossible that this could occur accidentally, however there have been numerous examples of people purposefully registering a domain name with the intention of selling it back to the trademark proprietor at an inflated price – a practice commonly known as cybersquatting.
There are also many examples of people registering a similar or identical trademark or company name with the intention to falsely attract consumers to a website, who mistakenly assume that the services or products offered on the website are affiliated with a reputable business.
In March this year the World Intellectual Property Organization reported that incidents of cybersquatting continued to rise in 2008, with a record 2 329 complaints filed under the Uniform Domain Name Dispute Resolution Policy (UDRP) of the Internet Corporation of Assigned Names and Numbers (ICANN). Compared to 2007 this is an increase of 8% in the number of complaints handled.
The South African Institute of Intellectual Property Law also reports that thousand of incidents of cybersquatting take place every week.
Businesses in this position have three options.
Firstly they can opt for arbitration. If the dispute relates to a dot com domain name, the UDRP administered by the WIPO Arbitration and Media Centre is the dispute resolution procedure. If the dispute relates to a dot co dot za domain name, the Alternative Dispute Resolution Regulations issued in terms of the Electronics Communications and Transactional Act will be applicable.
Proof of bad faith registration is required which can be countered by the registrant proving he has rights in the name.
This situation often arises when a .co.za domain name has been registered by one party and another party has registered the corresponding .com domain name.
Being the registered owner of the .co.za domain name does not automatically provide the registrant with the right to the .com domain name. If the registrant of the dot com domain name can show that he has rights in the name he will be able to successfully defend a complaint.
Secondly, if a business or person has a registered trademark it could approach the court, in the region where the domain name owner is resident, on the basis that the domain name infringes the trademark.
Thirdly, if there is no registered trademark one is still entitled to approach the relevant court on the basis that the applicant has a reputation under the name and the domain name creates the impression that the registrant's business is associated.
The question that arises in this instance is whether there is a reasonable likelihood that the public could be confused into believing that the business of the one party is connected with that of the other.
An example of cybersquatting is the Telkom Cool Ideas case. In 2006 Telkom registered Telkom Media (Pty) Ltd in order to focus on the provision of pay-television services over the Internet and made an announcement of its intentions, in the media, in August that year.
A few days later Cool Ideas 1290 CC registered the domain name telkommedia.co.za and, when Telkom wanted to register the domain name early in 2007 it could not do so.
Telkom filed a dispute with the South African Institute of Intellectual Property Law, which appointed an adjudicator to handle the dispute. The adjudicator found that Telkom had rights in the name Telkom Media; that the name Telkom Media is identical to the domain name; and that it was an abusive registration.
The fact that Cool Ideas registered the domain name only a few days after Telkom's announcement and that no business was conducted on the site, led the adjudicator to find that Cool Ideas acted in bad faith and as a result the domain name, telkommedia.co.za, was transferred to Telkom.
Don’t wait until it is too late. Businesses should make sure their domain names and related domain names are registered, and that they promptly renew an expiring domain name, says Krog.