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Friday, 9 August 2013

When someone has designs on your domain name -- literally

Domain name disputes do feature from time to time on this weblog, but not that often; likewise, disputes from Canada. It is thus with unfeigned delight that this Kat brings you a report on a recent decision that happily remedies both of these two shortcomings.  It's in the form of a note from Catherine (Cat) Lovrics, an Associate with this Kat's friends in the Canadian practice of  Bereskin & Parr LLP.  Cat writes the following text, which the Kats have slightly fiddled around with and commented on:

Design First? No, invention first --
design second!
 
A recent decision under the Canadian Domain Name Dispute Resolution Policy (CDRP) denied transfer of the domain name designfirst.ca, and ordered that the complainant pay $5,000 for reverse domain name hijacking. Why is this decision significant? Because it's relevant to future disputes involving two companies that use the same mark in different fields.  Here the complainant had earlier common law rights to the mark DESIGN FIRST for construction-related services, while the registrant had adopted the mark DESIGN 1st /FIRST for various product design services.   There had been concurrent use for over a decade.

In short, the junior user of a mark is unlikely to offend the CDRP unless (i) there is clear evidence of a deliberate intent to confuse internet users, (ii) the registrant knew of the complainant’s rights and adopted the mark to trade on it, or (iii) there has been illegitimate or unfair competition.  If a mark is somewhat descriptive or generic, bad faith and/or lack of legitimate interest is hard to prove.  Incidentally, a senior user who unsuccessfully invokes the CDRP to try to get a domain name from a legitimate junior user who operates in an unrelated field may be ordered to pay up to CAN$ 5,000.

Here are some choice extracts from the decision.

First, in finding no that bad faith had not been established and that the registrant did NOT intentionally attempt to attract internet users for commercial gain, by creating a likelihood of confusion, the panel’s comments bring in elements of “good faith” and “legitimate interest”. Thus the panel notes: 
*         "Commercial gain as a motive for a website is not per se unacceptable. [Now, that's good news!]… The Registrant is not a competitor of the Complainant; being a competitor is a factor that has been noted, and is often cited as a prerequisite, for the bad faith criterion in numerous domain name disputes. The Registrant has shown that it is attempting to use the domain name to advertise to its own client base, for its own services, in a (wider) market …" 
*         " ... while the domain name as registered and the common law marks are conceded to be confusingly similar on paper, no evidence of actual or likely confusion has been offered [Merpel notes that in England, regarding the tort of passing off, in the absence of an intention to deceive or mislead, the mere act of confusing the public is not actionable.  People sometimes think that trade mark law is there to protect the consumer, but the same can't be said about passing off. She wonders how closely this position is reflected in Canadian law]. As stated, the services offered and markets catered to are different, one business is more local, the other much more national. Both are award-winning enterprises, and thus each is sufficiently distinct in its own sphere.  The Complainant fails to show that the Registrant was attempting to create any link to anything attached to the Complainant or its business". 
*          "The Complainant fails to show that the Registrant was attempting to create any link to anything attached to the Complainant or its business. While it did register the domain name, and did intend to so register, the Registrant on the evidence did so only because the domain name reflected its chosen name for doing business. Its purpose appears to have been legitimate, and independent of the Complainant. No evidence was proffered to show that the Registrant was intending to disrupt, take advantage of or benefit from any goodwill that the Complainant may have had in its own sphere of commerce [Adds Merpel: all this builds up to a general picture that use of one's own name, even if it's a business name and not one's birth name, enjoys a far wider degree of tolerance in domain name law than it does in trade mark law -- unless you are Swiss, you are litigating in Switzerland, your name is Maggi and the junior user is Nestlé -- see Maggi v Société des Produits Nestlé SA, Case 4C.376/2004/Ima, January 21 2005] ".

The panel also found that the registrant’s activities were not an example of non-enumerated bad faith, grounded in the larger proposition that Registrant was knowingly and intentionally attempting to harm the Complainant through its registration and use of the name, while benefiting itself.  Here the panel expressly refuses to conflate issues of confusing similarity and legitimate interest with the bad faith analysis (while acknowledging that there may be overlaps). 
*         Turning to the evidence, the Complainant has not shown that the Registrant knew that the Complainant had rights in the mark when it registered the domain name. As a mark that is partly descriptive and partly generic, and given the distinct spheres of operation and clientele, it is quite conceivable that the Registrant had no idea of any distinctive use of the words “design first” [But is it conceivable that the registrants would never have taken the trouble to conduct an online search or two, to see if there were any business out there in Canada who were using the name Design First? After all, says Merpel, the internet was in existence when the junior registrant applied for its .ca mark, by which time the complainant had established a website at designfirstkitchens.com].
On legitimate interest, the panel found that the business name registrations for DESIGN 1st (the numeral, not the letter) were sufficient to show a legitimate interest, and noted.
*         "It is irrelevant that the Complainant’s trademark is closer than the Registrant’s business names to the domain name in dispute; all that matters here is that the Complainant cannot show that the Registrant does not have its own legitimate, objective link to the name under this head. The Complainant has identified the objective link, but without providing any evidence to undermine its legitimacy.

On reverse domain name hijacking: 
*         "In all past cases decided under the Policy, save forsale.ca, the existence of a confusing trademark was deemed to have been sufficient to defeat a claim of reverse domain name hijacking. The forsale.ca decision held that while the existence of a trademark registration would be a relevant consideration in deciding whether a complaint was filed in good faith, the Panel must also consider other factors, including the conduct of the complainant and the nature of the domain name. In this case, the whole of the Complainant’s argument turns on what is effectively an unsupported allegation of confusion. Both the bad faith and legitimate interest arguments are based on this allegation, which is advanced without any actual proof of actual or likely confusion"  [it's the old story, notes the IPKat: no proof, no progress ...]. 
*         "The Panel thus concludes that this Complaint is part of a strategy to force the Registrant into relinquishing the domain name it had legitimately obtained in good faith, conducted without a state of facts which could give rise to an honest belief of entitlement to succeed under the CDRP, and fueled by at the very least incoherent and misleading beliefs. Under these circumstances, the Panel feels that such practice is an abuse of the Canadian domain name dispute process. Moreover, in fairness, the Registrant should not be forced to bear a significant expense for such a proceeding. Paragraph 4.6 of the Policy was meant to discourage and correct this practice. It allows us to compensate to a maximum amount, and the Panel should show responsibility to the integrity of the process and exercise that discretion here" [Merpel was wondering what sort of proof does the Panel require for itself that a complaint is "part of a strategy to force the Registrant into relinquishing the domain name ..." rather than being merely a weak case that is not adequately founded on supporting evidence. The answer, at least in part, is found in the next paragraph]. 
*         "On an objective view of the facts, it is difficult to see how the Complainant could have acted with an honest, yet mistaken belief. There was longstanding concurrent use of “design first”, in separate fields of activity. Under these circumstances, it is impossible that the Complainant could have formed an honest belief that there was confusion. There is no state of facts suggesting actual confusion, no misdirected correspondence, odd customer inquires, etc. Moreover, the Complainant had abided with the Registrant’s use the domain name for a legitimate, non-competitive commercial activity for a period of ten years before taking action".
You can read the decision in full here.

3 comments:

Anonymous said...

"Merpel notes that in England, regarding the tort of passing off, in the absence of an intention to deceive or mislead, the mere act of confusing the public is not actionable."

Oh dear. I think Merpel needs to do some further reading on the English law of passing off.

I suggest Merpel starts with the judgment of Millet L.J. in Harrods Limited v Harrodian School Limited [1996] R.P.C. 697 which includes the following passage:

“Deception is the gist of the tort of passing off, but it is not necessary for a plaintiff to establish that the defendant consciously intended to deceive the public if that is the probable result of his conduct. Nevertheless, the question why the defendant chose to adopt a particular name or get up is always highly relevant. It is “a question which falls to be asked and answered”: see Sodastream Ltd. v. Thorn Cascade Co. Ltd. [1982] R.P.C. 459 at page 466 per Kerr L. J. If it is shown that the defendant deliberately sought to take the benefit of the plaintiff's goodwill for himself, the court will not “be astute to say that he cannot succeed in doing that which he is straining every nerve to do”: see Slazenger & Sons v. Feltham & Co. (1889) 6 R.P.C. 531 at page 538 per Lindley L. J.”

Merpel McKitten said...

Come off it, anonymous! Intention is presumed where confusion is the natural and probable consequence of a person's acts. Thus Lord Diplock in Erven Warnink v Townend [1979] AC 731, speaks of a misrepresentation "which is calculated to injure the business or goodwill of another trader". Nobody "calculates" anything -- Lord Diplock explains he means "in the sense that this is a reasonably foreseeable consequence".

But confusion by itself will not support an action for passing off: HFC Bank v Midland Bank ("HSBC") [2000] FSR 176

Anonymous said...

Sorry Merpel McKitten, but in citing HFC Bank v Midland Bank ("HSBC") [2000] FSR 176 you are confusing the issue of whether the mere fact that there is confusion necessarily means that there is misrepresentation (it does not necessarily follow and in the unusual facts of the HSBC case, the court concluded there was not) and whether or not INTENTION (the word that was used) is an ingredient of the tort, which it most definitely under the modern law is not.

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