In The News

Thu 11 Jan 2018

Clarity Around Trademark Rights and Domain Names


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Domain names and trademarks are a contentious area of law. The association of a domain name with a business trademark isn’t always guaranteed, and there is a misguided assumption that having a domain name gives rights to its use.

As it turns out, the issue of domain names and trademark rights is more complex than outright ownership.

Register The Trademark First

A trademark should be registered before a domain name, especially if the domain name is intended for business branding.

Having a registered trademark doesn’t give automatic rights to a domain name.  Domains which are registered first by an outside entity may considered a trademark infringement, and must be obtained through either purchase or legal action.

The domain owner must prove that they were unaware of any infringement prior to purchase or sale. Once a domain owner is aware of a potential conflict, they are liable for any infringement caused by sale or transfer of the name to anyone except the trademark owners.

Where The Confusion Lies

Using a fictitious company to demonstrate a scenario where the domain name and trademark work together in a potential real life scenario; “Blue Arrow” specialise in online consultancy, and own the trademark for their name in Australia.

They own the domains bluearrow.com.au, bluearrow.co.uk, bluearrow.co.nz, bluearrow.co.ca, and the bluearrow.com”.  Although Blue Arrow don’t own a trademark for their name outside of Australia, they have purchased these domain names as a deterrent within those countries, as they have a future intention to expand their business there, they have obtained the high level desirable country domain name.  By purchasing the high-level domain names in those countries, it will force any potential infringers to obtain substandard domain names, such as blue-arrow.com, blue-arrow.co.uk, blue-arrow.net.au and so forth.

In the world of domain name ownership, people can own and squat on domain names hoping that someone or a company will pay a good amount of money to buy the domain name off them. It is possible to own a domain name and “sit on it” without active use, known in some cases as cybersquatting. Should a different consultancy firm of the same name open up in any of the above countries, they are within their rights to use the name Blue Arrow if the Australian Blue Arrow firm has not trademarked the name in that country, let’s say the United Kingdom (UK). The Australian firm does not have to sell their domain name to the UK firm, they will be forcing them to take up a sub desirable domain name.

Blue Arrow Australia may decide whether or not they sell the domain name. On the one hand, they could make a profit from what is now a desirable domain name. On the other, it could inhibit their expansion overseas as they would lose their main form of online presence.

To add to this quandary, the overseas company may register their name as a trademark in that country, thus creating a possible infringement issue for Blue Arrow. The scenario looks like this; the UK firm applies for Blue Arrow as a trademark in the UK and they were successful in registering their trademark. They could start proceedings against BLUE ARROW in Australia to restrict what content they could publish on their website; www.bluearrow.co.uk.  In this case, the trademark trumps the domain name.  It will require legal proceedings to achieve this result, as the trademark owner is responsible for policing and enforcing their own trademark rights.

The Hierarchy of Domain Names

The world of domain names is tiered, with dot-coms being more desirable than dot-net or dot-org.

These options are still higher in the hierarchy than those with a specific location, such as .co.uk, although this would be advantageous within the country of operation.

A high-level domain name can quickly become the centre of conflict, particularly where both parties stand to benefit from its use. Due to international trademark laws, there are now several recommendations around registering both domain names and trademarks.

Cybersquatting

The online equivalent of house-squatting, a cybersquatter will purchase a domain name with the intension of “sitting on it” until it becomes worthy of sale.

A hefty fee may settle a dispute between a domain owner and rightful purchaser, however a challenge may equally result in legal fees as the dispute is taken to court.

Malicious cybersquatting may be proven through knowledge of a trademark prior to domain registration. However, it may be a challenging process to convince the court that a domain name was purchased with malice.

PETA vs Doughney

PETA are a well known animal rights organisation, standing for “People for the Ethical Treatment of Animals”.

In 1995 a parody site was established at peta.org, with the acronym being “People Eating Tasty Animals”.  Despite the court holding that peta.org was a violation of both cybersquatting and trademark laws, PETA was not eligible for any legal financial compensation, as the parodic nature of the site was not considered malicious.

How To Protect Yourself

The ideal scenario for any business, is to own both the trademark and top tier domain names associated with it. It’s not possible to own every variation of a domain name, but a variety such as those owned by Blue Arrow may be a sufficient start.

With online business booming, there is little point in owning a domain name if you can’t use it to promote yourself. Should you find yourself being challenged for your domain name, you are within your rights to refuse to sell it. However, if the domain is truly infringing on someone else’s trademark, you may find yourself being pulled into a legal battle.

As is so often advised, having a unique name and trademark may help to prevent any disputes, so that you and your collection of domain names can continue to promote your business successfully.

If you have any questions or would like to share you own experience with this in your business, leave me a comment.


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