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Who would guess that your www. could have so many legal considerations?

0001-Formal-onwhiteBy Robert Galloway


Domain names are unique identifiers/addresses for a specific websites. In today’s technological age, sole practitioners, partnerships, and corporations must have an online presence to succeed in the corporate world. The easiest way to create an online presence is by creating a website and registering an associated domain name. Unlike trademarks where there can be several owners of the same word mark, but in relation to different goods and services, there is only one owner globally of each domain name per top level domain. So what do you do when another entity has used your brand or trademark in their domain name or used a domain name which is confusingly similar to your brand or trademark?

In this internet era, when considering trademarks, you must also turn your attention to their interaction with domain names. The interplay between trademarks and domain names causes many internet-based trademark infringement issues to arise. Such issues include: whether domain names can be trademarks, whether there is priority for a trademark owner in allocating domain names, and when a domain name infringes a registered or unregistered trademark. Domain names have a functional aspect, but can also act as trademarks to distinguish the goods and services of one business from another. As such, where a corporation wants to register their domain name as a mark, similar to all other trademarks, that corporation must satisfy the registerability requirements of the Trademarks Act.

With respect to the allocation of domain names, the policy followed in Canada is that a domain name is awarded to the person or corporation who first registers it. It is a first-come, first-served system and registration is done through an accredited registrar. It is also possible to register multiple domain names which all resolve to the same website. Although the first registrant may own the domain name, this does not necessarily protect them from possible trademark infringement claims if that domain names infringes upon another corporation’s trademark.

Registrants of a domain name must accept a binding arbitration clause as part of the registration which creates dispute settlement proceedings to hear disputes revolving around trademark and domain name holders. For general top-level domains (such as “.com”, “.org”, and “.net”) the Uniform Domain Name Dispute Resolution Policy (UDRP) sets out the dispute resolution procedures. The URDP was adopted by the Internet Corporation for Assigned Names and Numbers, which controls the assignment of domain names. Under the UDRP, the arbitration panel may order the transfer or cancellation of a domain name registration. In cases involving the use of the national code of Canada “.ca” domain names, the Canadian Internet Registration Authority (CIRA) has jurisdiction over any disputes and implements the Domain Name Dispute Resolution Policy (CDRP). The main difference between the UDRP and CDRP is that CDRP has a more limited definition of what constitutes bad faith and draws more parallels with Canadian Trademark law. When facing a trademark infringement case involving a domain name, an individual can use either the UDRP or CDRP process or bring action in national courts. That being said, the arbitration processes run by UDRP and CDRP are generally a much faster and less expensive means of recourse than normal court proceedings.

The presence of copy-cats and cyber-squatters is a major issue facing trademark holders and domain name registrants. Copy-cats register domain names that are confusingly similar to known brands by either including that brand in the domain name or registering a domain name that includes common typos in hopes that potential customers may accidently makes those typos. Cyber-squatting is where an individual purchases a domain name with the intention of selling that domain name at a higher cost to the owner of the trademark. When a potential customer types in a possible domain name, their initial expectation of the resulting site is that it is related to the business in which they are searching for. Knowing this, copy-cats and cyber-squatters will purchase domain names of well-known brands in an attempt to direct customers to their websites.

Actions for trademark infringement can be brought for both registered and common law trademarks. A trademark owner must demonstrate, similar to general trademark infringement cases, that the domain name is identical or confusingly similar to that owner’s trademark, that the domain name owners has no rights or interests in respect of the domain name, and that the domain name has been registered and is being used in bad faith. All three elements must be proved to cancel or transfer a domain name.

With respect to the first element, that the domain name is identical or confusingly similar, this is determined using the normal procedures of the Trademark Act. The second element requires that the domain name holder have no legitimate right or interest in the domain name. To halt the cancellation or transfer of the trademark, the registrant must demonstrate that they were authorized by the trademark owner to register the domain name or have made fair use of the domain name with no commercial intent. Lastly, the trademark owner must establish that the domain name was registered and used in bad faith. The following situations have been deemed to be of bad faith:

  • circumstances indicating that you have registered or you have acquired the domain name primarily for the purpose of selling, renting, or otherwise transferring the domain name registration to the complainant who is the owner of the trademark or service mark or to a competitor of that complainant, for valuable consideration in excess of your documented out-of-pocket costs directly related to the domain name; or
  • you have registered the domain name in order to prevent the owner of the trademark or service mark from reflecting the mark in a corresponding domain name, provided that you have engaged in a pattern of such conduct; or
  • you have registered the domain name primarily for the purpose of disrupting the business of a competitor; or
  • by using the domain name, you have intentionally attempted to attract, for commercial gain, Internet users to your web site or other on-line location, by creating a likelihood of confusion with the complainant’s mark as to the source, sponsorship, affiliation, or endorsement of your web site or location or of a product or service on your web site or location.

Where these situations of bad faith do not exist, the panel may still find bad faith if they are convinced that at the time of registration, the registrant knew of the trademark holder’s trademark interest and the domain name was used in bad faith. Where the elements can be satisfied it is often determined that the domain name makes a false misrepresentation that the owner of that domain name is associated or connected with the trademark owner’s trademark and associated corporation and could constitute passing-off. The courts have held that the intentional registration of a domain name knowing that the domain is similar or identical to another corporation’s valuable trademark weighs in the favour of the likelihood confusion exists.

Rob Galloway is an Associate with Lancaster Brooks & Welch LLP. Rob assists clients with their Corporate and Commercial needs and is available for advice at 905-641-1551.


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