23rd March, 2016
There are numerous inquiries each year from brand owners complaining that someone else has registered a domain name containing their brand.
The most popular top-level domain in Australia is .com.au, and this is where most disputes occur.
Business owners in this position usually either want to shut down the domain, or get the domain transferred to them.
The .au domain name space is managed by auDA (.au Domain Administration Ltd). As part of its role, auDA administers the auDRP (.au Dispute Resolution Policy).
When a person registers a domain name, they do not take ownership of it. Rather, they are granted a license to use the domain name. This license can be terminated in certain situations.
A brand owner can file a complaint asking for the domain name license be cancelled or transferred.
All complaints are referred to a panel. Both the domain name holder and the complainant also have an opportunity to file evidence and make submissions. Proceedings are conducted electronically.
To succeed in a complaint, the complainant must prove three things:
However, proving all three of the above factors can be challenging.
The third requirement is that a domain name has been used in ‘bad faith’.
This usually means there has been some ulterior or unfair motive in registering or using a domain name. This may include redirecting traffic to a competitor’s website, or registering the domain with the intention of selling it to a specific brand owner for a profit.
If the domain name includes a famous brand, it will be easier to show bad faith. There would usually be a strong inference that the person registering or using the domain name did so to take advantage of the brand’s reputation. Where the domain name holder has also tried to sell the domain name to the brand owner for a big profit, this is also strong evidence of bad faith.
With less famous brands a domain name complaint can be much more difficult. This is particularly so where the domain name has been registered but is idle and unused.
In these cases, it is often impossible to prove that a person has registered or used the domain name in bad faith. Simple registration of domain name does not in itself constitute bad faith. Something more is needed. For example, if registration of the domain name was followed by an offer to sell the domain name to the brand owner, this might constitute bad faith. Similarly, if it can be shown that there is a pattern of the person registering trade marks that obviously belong to other people; this may indicate the registrant is a cyber-squatter.
Otherwise, the element of bad faith is where most domain name complaints will fall over.
This is particularly the case where the domain name was registered before the complainant’s trade mark was registered or used. Similarly, where the brand owner claims trade mark rights in a purely descriptive term in the domain name, allegations of bad faith are usually doomed to fail.
A domain name complaint can be expensive.
The auDRP filing fees are $2,000 for a single member panel, or $4,500 for a three-member panel.
If you add legal costs on top of that you are looking at anywhere between $5,000-$15,000 (perhaps more, depending on the firm you use and the amount of time required to prepare evidence). Also, unlike in court proceedings, the loser is not ordered to pay the winner’s costs.
The best initial option is to talk to a specialist in trade mark disputes, to get some idea of your legal position. However, the simple rule with domain name complaints is not to make one, unless your adviser is at least 80 percent sure that you will win.
If a domain name is unused and contains a non-famous brand, it will be difficult to prove bad faith, and there is often little that can be done to force the domain name holder to hand over the domain name.
It often better to put the person on notice of trade mark rights and warn them that use of the domain name could lead to court action. An unused domain name is a nuisance but is rarely damaging.
Alternatively, many domain name holders are prepared to sell their domain for a reasonable price (often less than the cost of a domain name complaint). Although unpalatable, paying for transfer of the domain is often the most cost-effective way of obtaining the domain name.