Domain Name “Infringements” and Cyber-squatting

This development has been hailed as a major breakthrough, and certainly it will open up the Internet to non-English speakers or those who are not familiar with Latin characters.  But brand owners should be wary that IDNs could open up more channels for infringement of their brand rights and may also encourage cyber-squatting.

The question, therefore, is what do businesses need to do to prevent misuse of their brand, and if infringement has occurred, particularly if by means of IDNs, what can be done about it.

For claimants who intend to take action against an infringer who has registered a domain name that is identical or confusingly similar to the claimant’s brand and is trading through that domain, the most common grounds to rely on are trade mark infringement or a claim under the tort of passing off.  It is well established, in cases such as Harrods Ltd v UK Network Services Ltd [1997] 4 EIPR D-106, British Telecommunications plc v One in a Million Ltd [1998] FSR 265 (CA) and a few other subsequent cases, that where the defendant has registered domain names of “famous brands” without apparently any interest in them other than to try and sell them to the brand owners at a premium, such infringement would be actionable under trade mark law or in passing off.

The decisions, particularly in the One in a Million case, were not surprising, since it was obvious from the actions of the defendants that they clearly intended to make money out of selling the domains to the brand owners.

Relying on these cases, more established companies would not have too much difficulty enforcing their rights against infringers. Start-up companies, however, may find it difficult to demonstrate the requisite goodwill and reputation required in a passing off action. These businesses will therefore only be able to rely on their earlier trade mark registration, assuming they have taken this precaution. Even then, the respective dates of the parties’ rights are crucial; for instance, it may be difficult to enforce rights under a registered trade mark against a domain name that was created prior to the trade mark filing date.

With IDNs, it becomes even more imperative that brand owners take all the necessary steps to protect themselves against infringers. For companies that already trade in or are planning to trade in countries where the consumers are predominantly non-English speakers, it is a good idea to consider properly branding the company’s trade mark in those countries’ native languages, and to register those native-language trade marks in the respective territories. For instance, it is well known that “Western” brands will find it difficult to establish brand-recognition in China without adopting a Chinese language trade mark. 

Once the branding exercise has been conducted, it would also be wise to consider obtaining the relevant IDN featuring the trade mark in that native-language. This would prevent public confusion over the true source of the brand.

In summary, the emergence of IDNs highlights the importance of:

• Obtaining trade mark registration to prevent unauthorised or fraudulent use of trade marks as domain names, especially for businesses without substantial goodwill or many years of trading.
• Adopting a native-language brand name in the countries of interest, and crucially protecting that name by registration.

Dennis Lee advises businesses of all sizes on protecting and defending their brands.  For advice on this or any aspect of Intellectual Property law, contact Dennis (dktl@silvermansherliker.co.uk) or any of the IP team on +44 (0)20 7749 2700.