You made a decision to increase your online presence. This required significant funds for developing your website and ensuring it ranks high in online search engines. The results are becoming apparent with a broadening of your customer base and measurable increases in visits to your website. This involved choosing a suitable domain name. You chose a domain name that matches your trade mark and since you mainly operate in Australia, the domain name was registered in the top level .com.au.
One day, you receive an email from one of your customers complaining about an email you had sent requiring disclosure of personal details. You are puzzled by this query and learn, after looking into the matter, that you had not sent the offending email. Rather, the email was sent using a domain name with the identical trade mark but in the top level .com. It appears that someone is attempting to exploit potential confusion among your customers as to the origin of the email by creating an association with your company in the form of your trade mark appearing in the domain name.
A common horror story
This is a common scenario of fraudulent conduct experienced by many businesses. This type of conduct is referred to as phishing, whereby personal information is collected through deception and then used for fraudulent purposes. However, phishing is only one example of abusive use of the domain name registration system.
Domain names are commonly used as online addresses that direct internet users to websites. They are also used in email addresses. In the above example, the deception involves registering a domain name that is confusingly similar to your trade mark or your existing domain name and then using an email facility linked to that domain name to mislead the recipient into believing that the email emanates from you.
Another common form of abuse involves pointing a domain name that is confusingly similar to a company’s trade mark to a website that contains pay-per-click advertisements. The perpetrator is often able to derive commercial benefit from such an arrangement. While the trade mark owner is not damaged directly, the effects may be more subtle, for example a reduction in internet traffic to the trade mark owner’s website.
Deliberately diverting traffic
Conduct of more concern would be the registration of a domain name containing a company’s trade mark for use in diverting internet traffic to a competitor’s website or the website of an unauthorised distributor, or perhaps even a website selling counterfeit products. Such conduct may lead to a significant loss of potential customers and thereby inflict financial damage on the trade mark owner.
However, all is not doom and gloom. Something can be done to counter abusive domain name registrations and thereby the potential damage such abuses may inflict. Assuming that the perpetrator remains anonymous (which is true for many cases), you effectively have two options: a reactive and a proactive approach or a combination of both.
The proactive approach is to defensively register domain names in the top levels your customers would expect to find you. A defensive registration will stop another person registering the same domain name in the same top level. However, it will not stop the registration of similar domain names in the same top level or the registration of the same domain name in a different top level. For example, registering yourtrademark.com.au will prevent a third party registering yourtrademark.com.au. However, it will not prevent a third party registering yourtrademarks.com.au (i.e. plural of your trade mark) or yourtrademark.net.
How domain name registration works
The domain name system currently caters for 21 generic top level domains (gTLDs) such as .com, .net, .org and in excess of 250 country code top level domains (ccTLDs) such as .com.au, .co.nz, co.uk. Registering your most important brands in each of these would most likely not be feasible even for large corporations. In any event, if your market is confined to Australia it makes little sense for example, to defensively register domain names in a Ukrainian top level. However, registration in an Australian top level, such as .com.au and perhaps a more general top level, such as .com, may be prudent.
The governing body of the domain name system, the Internet Corporation for Assigned Names and Numbers (ICANN) is proposing to expand the domain name system by allowing an indefinite amount of additional top levels, i.e. in addition to the existing 21. According to some (perhaps optimistic) expectations, applications for new top levels may be accepted towards the end of this year. This new expansion of the domain name system would potentially allow new generic top levels, such as .home and .art, geographical top levels, such as .melbourne and .sydney and even top levels that consist of trade marks. For example, a recent news release by Canon Inc signals its intention to apply for the top level .canon.
Despite some criticism, most notably from trade mark owners and their representatives, the mass expansion of the domain name system is likely to occur. This will add many new top levels to the already long list of top levels for trade mark owners to consider when devising their strategy, i.e. whether to take a proactive approach, a reactive approach or a combination of both.
Proactive and reactive approaches
Where the proactive approach involves defensive registration of key domain names, the reactive approach involves challenging abusive domain name registrations, most commonly in fast track administrative proceedings. The manner in which such domain names may be challenged depends on the top level in which the disputed domain name is registered. The common attribute of most administrative procedures is that they aim to combat abusive behaviour, i.e. the complainant must show that the respondent’s conduct is in bad faith.
The administrative proceeding that applies to most gTLDs and some ccTLDs is the Uniform Domain Name Dispute Resolution Policy (UDRP). Disputes relating to Australian domain names are governed by the .au Dispute Resolution Policy (auDRP), which is only a slight variation of the UDRP. Both proceedings are able to deliver results in a short timeframe, usually two–to-three months and at a reasonable cost when compared to litigation in the courts.
ICANN is envisaging a number of additional tools to assist trade mark owners in protecting their brands in the proposed expanded domain name system. Such tools are aimed for example, at enabling trade mark owners to be notified of certain domain name applications and/or for trade mark owners to be able to reserve domain names that match their trade marks. Regular updates on ICANN’s proposed expansion of the domain name system may be found on Griffith Hack’s website at www.griffithhack.com.au.
In addition to administrative proceedings, such as the UDRP and the auDRP, some jurisdictions also offer alternative options. In Australia, for example, domain name registrations that contain a third party trade mark and point to websites which contain sponsored links, may be challenged by filing a complaint with the administrator of Australia’s domain names system, the au Domain Name Administrator. However, the effect of a successful complaint under this system is the cancellation of the disputed domain name. In other words, the domain name could again end up in the control of the initial registrant or perhaps in the hands of another party. In contrast, the remedy of a successful UDRP or auDRP is the transfer of the disputed domain name to you or your company.
If the respondent is identifiable and depending on the manner in which the domain name is used (for example in conjunction with the trade mark appearing in a website offering), further options may be available including trade mark infringement proceedings and/or proceedings under the relevant provisions of the Trade Practices Act 1974 and/or the tort of passing off.
Don’t waste time, act now
In the face of increasing online fraud and misrepresentation and against the backdrop of the possibility of a vastly expanded domain name system, it is advisable to map out a strategy for dealing with domain names. Such a strategy may consist of a proactive approach (i.e. determine relevant top levels and register your most important trade marks) or a reactive approach (i.e. challenging abusive domain name registrations in the nominated top levels) or a combination of both. Your intellectual property lawyer will be able to assist you with the preparation and implementation of your strategy and with advice on the availability and the pros and cons of each of your options.
–Jürgen Bebber is Senior Associate and Andrew Sykes is Trade Mark Attorney with Griffith Hack (www.griffithhack.com.au), specialist IP lawyers and trade mark attorneys.