Brand your domain name!

September 2004

Brand your domain name!

bouton-vers-francaisMarie Laure Leclercq
This email address is being protected from spambots. You need JavaScript enabled to view it.
514 878-3204

Since the arrival of the Internet, it has become more important than ever to register your trademarks in order to protect your goodwill. There are two trademarks, in particular, that require protection through registration: your trade name (as well as the name of your leading products and services, if applicable) and your domain name, if its distinctive portion differs substantially from your trademark. In today's world, protecting one's domain name by way of trademark registration is an indispensable part of every retailer's legal arsenal. But, against what exactly is it that trademark registration will protect you? The answer is cybersquatting.

Caveat Emptor (Purchaser beware - old Latin maxim)

The arrival of the Internet has made it easier than ever to defraud consumers with impunity. In cyberspace, unfair competition and passing off (forgery) are child's play. There is no physical address, no physical location, no recognizable face and no human contact.
 
However, consumers and clients do not want to be fooled. Given the anonymous face behind each site, clients have been willing to make electronic payments only on sites that inspire confidence—Sears, Canadian Tire and the like—such that only the big names have had the lion's share of electronic commerce in Canada.
 
Furthermore, how can consumers satisfy themselves that they are truly on the site of the company they are seeking? Once they are connected to the Internet, users have no choice but to rely on trademarks and domain names as indicators of authenticity. Under these circumstances, only a trademark can guarantee and certify the legitimacy of a supplier or contact person in the electronic marketplace.

Are you a retailer who has opened a virtual store on the Internet?

You know that a large part of the retail trade is now carried out on the Internet and that the number of sales conducted through the Internet is growing exponentially, and you want to be a part of this trend.
 
However, you have to watch out for passing off and unfair competition! There are any number of persons who are willing to pass themselves off as you and it is not necessarily easy to stop them. They can be anywhere on the Internet—in any country—and it can be difficult to prevent them from acting. Only a domain name can guarantee a site's authenticity throughout the world. And in order to acquire a domain name, the self-regulatory agencies rely particularly on the trademarks registered in the country of origin in order to establish one's legitimate right to a domain name. Only a registered trademark inspires such confidence.
 
As a result, registered trademarks are no longer merely a means of identifying the wares or services of a given company in a given territory. They now also serve as certification labels for the self-regulatory agencies in order to establish one's right to a domain name—and the domain name, in turn, is the only means of verifying the authenticity of a product or service on the Internet.

Domain name problems in cyberspace

In addition to the challenge of marketing products and services internationally through the Internet, retailers must also deal with obstacles regarding the use of their domain names. Certain online retailers, having created their domain names based upon their trademarks, have discovered that the Internet already contains similar domain names which attract their existing or potential clients. Conflicts relating to these domain names produce real legal effects. As a result, virtual domain names on the Internet have given a new dimension to the problem of unfair competition. The tool for fighting unfair competition is the trademark. This is why the federal statute is called An Act relating to trade-marks and unfair competition.

What is a trademark?

A trademark is the means that has been used from the very beginning to identify the origin of a product or service in the real world. With the arrival of the Internet, trademarks now also play the same role in the virtual world.
 
In order to protect trademarks, the law allows them to be registered, thereby conferring upon the owner the exclusive right to use the trademark throughout Canada in connection with the wares and services with which it is associated. The same process can also be carried out in the United States.

What is a domain name?

Within the Internet infrastructure, domain names are electronic addresses that have been made more esthetically pleasing for Web surfers. Strictly speaking, each computer hooked onto the Internet has a unique numeric address to identify it. However, instead of being represented by numbers, the Domain Name System (DNS) allows online retailers to identify themselves with a symbolic address. Instead of identifying themselves by the actual IP address (Internet Protocol address) which is only a long series of numbers (e.g. 111.11.11.11) employed in the Internet infrastructure, they can use more user friendly letter combinations to create a domain name, such as "DGCconstructions.ca", for example. The natural choice when selecting a domain name is one which comes close to the trademark of the firm that owns the Internet site. This is where protecting the domain name as a trademark comes into play. In today's world, protecting one's domain name by way of trademark registration is an indispensable part of every retailer's legal arsenal.

Certification of your domain name

One has to apply to a certification agency in order to obtain a domain name. However, these domain names are not trademarks—they are electronic identification and tracking tools which have become signs for distinguishing businesses. The certification agencies grant domain names on a "first come, first served" basis. This is why countless cybersquatters have, intentionally or unintentionally, hoarded domain names in order to resell them. In order to fight such abuses, the certification agencies have implemented rapid international mechanisms for settling domain name conflicts.

The certification agencies: CIRA and ICANN

A Canadian merchant has several agencies from which to choose in order to obtain a domain name. In Canada, the organization established to manage the granting of domain names is CIRA (the Canadian Internet Registration Authority). It has been entrusted with managing domain names with the ".ca" extension.
 
Outside this regional boundary, ICANN (the Internet Corporation for Assigned Names and Numbers) is in charge of assigning domain names with more generic extensions such as ".com". On the international scene, ICANN's mission is to coordinate the domain name system and ensure its operational stability.
 
In addition to managing electronic IP addresses, these agencies have implemented an effective mechanism to protect the rights of online retailers with respect to their domain names, and they place great importance on the fact that the name or a component thereof is a registered trademark. ICANN and CIRA have each developed a uniform policy for settling disputes regarding domain names and, although our discussion below is limited to the Canadian agency, ICANN's mechanism is very similar.

Who is entitled to a given domain name?

A certification agency must determine who is entitled to a given domain name. The easiest and most efficient method—by far—of answering that question is to provide a certificate of registration of one's trademark in one's country of origin.

CIRA Domain Name Dispute Resolution Policy

In order to provide an effective and accessible mechanism, CIRA established a procedure allowing Internet users to settle disputes by way of arbitration. In accordance with paragraph 3.1 (a) of the CIRA Domain Name Dispute Resolution Policy, a person may file a complaint if a domain name is confusingly similar to that person's registered trademark. If the complainant successfully proves these elements, the arbitration panel may cancel the respondent's domain name registration, or transfer the registration to the complainant.
 
In Diners Club International Ltd. v. Planet Explorer Inc., a decision rendered in February of 2004 pursuant to the CIRA Domain Name Dispute Resolution Policy, the arbitration panel ordered that the domain name registered by the respondent be transferred to the complainant. In this case, the respondent had obtained the domain name "DINERSCARD.CA". As for the complainant, it had obtained the domain name "DINERS-CLUB.CA" which was based on its trademark "DINERS CLUB" of which it was also the owner. According to the arbitration panel, this was not a matter of determining whether or not there was confusion between the two domain names, but rather whether or not there was confusion due to a similarity between the respondent's domain name and the complainant's trademark. The arbitration panel held that the combination of the words "DINERS" and "CARD" in the respondent's domain name was clearly similar to such an extent as to create confusion in the minds of online consumers. Given that the complainant had registered its trademark before the registration of the respondent's domain name, the complainant was able to assert its rights and protect its goodwill.

Protect your rights

In conclusion, in this brief overview we have shown you why, since the arrival of the Internet, it has become more important than ever to register your trademarks in order to protect your goodwill, and we have explained that there are primarily two trademarks that require protection: your trade name (as well as the name of your leading products and services, if applicable) and your domain name if it differs from your trademark. Protecting one's domain name by way of trademark registration is now an indispensable part of every retailer's legal arsenal in the fight against cybersquatting.

This bulletin provides general comments on recent developments in the law. It does not constitute and should not viewed as legal advice. No legal action should be taken on the basis of the information contained herein.

 

DE GRANDPRÉ CHAIT LLP

1000, Rue De La Gauchetière Street West, Suite 2900 Montréal, Québec Canada H3B 4W5

T 514 878-4311 | F 514-878-4333 | This email address is being protected from spambots. You need JavaScript enabled to view it. | www.degrandprechait.com