Cyber Squatting and Domain Name Retention

services-banner9

Business owners and traders often fall victim to Cyber Squatting when another party sits on a similar domain name with the intention of exploiting the business owner. We look at the issues surrounding Cyber Squatting and Domain Name Retention.

Cyber Squatting occurs when a person or company registers a domain name which is similar to the domain of another person or company and does so in bad faith. The term bad faith means not using that domain name for any purpose, using it to encroach on the business of the other person by confusing customers with the other person’s business or brand or selling it to the other person at an inflated price.

Fortunately, over the years two effective methods have been developed to combat Cyber Squatting, namely:

  • filing a complaint with the Resolution Institute or WIPO (the World Intellectual Property Organisation) and having the matter compulsorily arbitrated by an approved panel; and
  • filing proceedings in the Courts for an action in misleading or deceptive conduct under the consumer law, passing off or a breach of the Trademarks Act 1995 (Cth).

Complaint and Mandatory Arbitration

A person complaining of Cyber Squatting has recourse by lodging a complaint with either the Resolution Institution or WIPO who are the approved bodies under the .au Domain Administration. The .au Domain Administration is the governing body in Australia in relation to domains.

The .au Domain Administration published a policy in 2015 which regulates the goods use of Australian domain names and the procedure for breaches of that policy.

A complainant lodges a complaint with the approved body, the respondent lodges their response and the approved body lists a date for a panel (of either one member or three members) to convene and determine whether the respondent is in breach of the au. Domain policy.

In particular, the panel considers whether:

  • circumstances exist which indicate that the respondent has registered or acquired the domain name primarily for the purpose of selling, renting or otherwise transferring the domain name registration to another person for an amount in excess of their actual expenses;
  • whether the respondent registered the domain name in order to prevent the complainant, who is the owner of a particular trademark, from reflecting that trademark in a corresponding domain name; and
  • whether the respondent has used the domain name to intentionally attempt to attract, for commercial gain, internet users to that domain by creating a likelihood of confusion with the complainant’s trademark.

It is these factors which the complainant bears the onus of proof in making their complaint. Once the panel convenes and determines whether the respondent is in breach of the au. Domain Administration policy they publish their decision. There is then a period of 10 days which the approved body must wait before handing down an order to give effect to their decision, in order for the complainant or respondent to bring proceedings in the Court. The entire process takes approximately 40 days.

Litigation – Misleading or Deceptive Conduct

A person whose intellectual property rights are being infringed may also have recourse through Schedule 2 of the Competition and Consumer 2010 Act 2010 (Cth), the Australian Consumer Law. The Australian Consumer Law provides that a person must not, in trade or commerce, engage in conduct which is misleading or deceptive.

The Australian Consumer Law allows a person “injured” by the misleading or deceptive conduct of another to apply directly to the Federal Court for orders, including compensation and injunctions for the return or transfer of property. In the case of a domain name the misleading or deceptive conduct would be much along the lines of the breach to the au. Domain Administration policy whereby a person effectively prevents the complainant from reflecting their trademark in a domain name or attempts to attract commercial gain by creating confusion with the complainant’s trademark.

Litigation – Trademark

A trademark is a sign used or intended to be used to distinguish goods or services dealt with in the course of trade from any other person. A sign is any letter, word , name, signature, numeral, device, brand, heading, label, ticket, aspect of packaging, shape, colour, sound or scent.[1]

A trademark will be infringed when a person uses as, a trademark, a sign that is substantially identical with or deceptively similar to the trademark in relation to goods or services in respect of which the trademark is registered.

The term “deceptively similar” is defined in section 10 of the Trademarks Act 1995 (Cth) to mean so nearly resembling that other trademark that it is likely to deceive or cause confusion.

The comparison in order to determine if one sign is deceptively similar to the registered trademark is described in the case of Facton Ltd v. Mish Mash Clothing Pty Ltd [2012] FCA 22 at 14 whereby the Federal Court of Australia said it is sufficient if a person, who only knows one of the trademarks and has an imperfect recollection of that trademark, is likely to be deceived or entertain a reasonable doubt.

Litigation – Passing Off

Passing off is a tort whereby a person suffers loss at the hands of a defendant’s deceit in relation to the origin of goods. This tort may be the basis of a claim in the Federal Court in relation to loss suffered by a trademark holder in relation to a Cyber Squatter.

Powell J in the Supreme Court of New South Wales case of Fletcher Challenge Ltd v. Fletcher Challenge Pty Ltd [1981] 1 NSWLR 196 at 204 outlined the three elements to passing off, namely:

  • the goods have or the business has good will or reputation;
  • the action of the defendant have cause or will cause ordinary purchasers of the plaintiff’s goods or ordinary customers to believe the defendant’s goods are those of the plaintiff; and
  • the plaintiff has or is likely to suffer loss as a result, in the plaintiff’s trade or business.

Summary

While these processes are well established, and in the case of the Dispute Resolution Process through the au. Domain Administration tailored to be able to be filed by a lay person, the application must still be finessed by a solicitor. The team at Boss Lawyers are experts in Intellectual Property and have assisted clients in Intellectual Property disputes in the past from trademark infringements to claims of misleading and deceptive conduct. If your Intellectual Property rights are infringed, call
07 3188 0200 to speak with a member of our team.

Leave a Reply

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.