Spoor and FisherSince the introduction of the information era, through the internet, many South African companies have been affected by domain name hi-jacking, cyber-squatting or simply the unauthorised registration of trade marks as domain names.

In the past, disputes of this nature had to be settled through expensive and time consuming court proceedings.  Now they are settled through an Alternative Dispute Resolution (ADR) process in terms of regulations governed by the Electronic Communications and Transactions Act of 2002.  The ADR process is administered by the South African Institute of Intellectual Property Law (SAIIPL).

The purpose of this article is to explore the procedure and criteria involved to lodge a complaint with SAIIPL and, to provide an overview of how the criteria are applied in the form of case studies.

CRITERIA FOR LODGING A COMPLAINT:

The ADR procedure is preferred over litigation proceedings in the courts of South Africa not only because it does not have the problems often encountered in vesting jurisdiction but also because it is quick and relatively inexpensive.

The Regulations allow for complaints to be lodged against domain names which:

1.    take unfair advantage of the rights of a trade mark owner;

2.    are contrary to the law;

3.    give offence to any class of persons;

4.    amount to hate-speech, racism; or

5.    could be considered to be contrary to public policy.

In the case of trade mark rights, the complainant needs to show that:

1.    it has rights in respect of a name or mark which is identical or similar to the domain name; and/or

2.    that the domain name, in the hands of the registrant, is an abusive registration[i].

An abusive registration is considered to be a domain name that was used or registered in a manner which took unfair advantage of and/or was unfairly detrimental to the complainant’s rights. These rights include, but are not limited to, intellectual property rights such as common law or statutory rights in a trade mark, commercial, linguistic, religious and personal rights protected under South African law.

PROCEDURE:

Domain name disputes are lodged directly with SAIIPL as a Dispute Resolution Provider. The Registrant will have an opportunity to respond to such a complaint and, once all the arguments have been submitted, an Adjudicator will be appointed to make a determination. It takes approximately 2 months to obtain a decision and the Adjudicator’s decision will be implemented through the Registry system directly. Therefore, the assistance of the domain name Registrant is no longer required to ensure the successful transfer of a domain name.  (This has combatted previous constraints where the Registrant provided false or incomplete details under the WHOIS database).

CASE STUDY:

thelittleblackbook.co.za

In this matter, the Complainant was the licensee/user of the THE LITTLE BLACK BOOK trade mark. The Complainant lodged a complaint against the registration of the domain name thelittleblackbook.co.za. The actual owner of the THE LITTLE BLACK BOOK trade mark was, however, not cited as a party to the proceedings. 

In terms of Regulation 3(1) of the domain name dispute regulations the complainant has to prove:-

·         “it has rights in a name or trade mark;

·         that the trade mark is identical or similar to the domain name complained about; and/or

·         that the domain name in the hands of the registrant is abusive”.

The adjudicator panel has to be convinced of all of the above factors.

The Adjudicator found that any rights stemming from the use of the THE LITTLE BLACK BOOK trade mark would accrue to the trade mark owner and note the licensee/user.  Since the actual owner of THE LITTLE BLACK BOOK trade mark was not cited as a party to the proceedings the Adjudicator found that the Complainant, as the licensee, and not the owner, of the trade mark, consequently could not show that it had rights in the THE LITTLE BLACK BOOK trade mark.  The dispute was therefore refused.

nutri-ag.co.za

The domain name nutri-ag.co.za was registered on 14 August 2009 and was used in relation to the distribution of plant fertilizers and nutritional products.  The Complainant, whose business also includes the marketing and distribution of plant fertilizers and nutritional products, relied on its NUTRIAG trade marks in its complaint. These trade marks were, however, applied for on 17 November 2009 (approximately 3 months after the date of registration of the domain name in question).

The Complainant’s business was established internationally in 1960.  In South Africa specifically, the complainant alleged that its products under the NUTRIAG trade marks were available through one of its agents since 2001 and that its trade mark NUTRIAG had, as a result, achieved prior rights in South Africa.

In support of the above allegations, the complainant submitted invoices dating back to at least 2004 showing that its NUTRIAG products were available in South Africa prior to the date of registration of the domain name in question.

The Adjudicator found that “although the trade mark registrations are irrelevant, having been applied for after the domain name registration” the Complainant has proven the requisite common law rights through its use of the mark NUTRIAG in South Africa prior to registration of the domain name.  Therefore, the Adjudicator found that the Complainant successfully established rights in the NUTRIAG trade mark. 

Furthermore, in order to determine if the domain name was abusive, the Adjudicator evaluated whether or not the domain name was acquired primarily to:-

·         block intentionally the registration of a name or a mark in which the complainant has rights[ii];

·         disrupt unfairly the business of the complainant[iii]; or

·         prevent the complainant from exercising his/her/its rights[iv].

The Adjudicator held that as the Registrant and the Complainant operate in the same field and since the Registrant failed to explain its conduct, it was reasonable to infer that the Registrant had registered the domain name to block the registration of the domain name by the Complainant and/or that it was registered to mislead the public.  In the circumstances, the Adjudicator found that “at the time when registration took place the domain name took advantage of or was unfairly detrimental to the complainant’s rights”.  The Registrant was ordered to transfer the domain name to the Complainant.

sterkinikor.co.za

The Complainant established that it is the registered proprietor of various trade marks in South Africa which incorporate the trade mark STER-KINEKOR.  The Complainant also showed that its licensee/user of the STER-KINEKOR trade marks is the registrant for the ster-kinekor.co.za and ster-kinekor.com domain names. 

The Complainant contended that the STER-KINEKOR trade mark has been used extensively in South Africa and that it is considered to be a well-known trade mark.  The Complainant submitted that the domain name sterkinikor.co.za is identical or similar to it STER-KINEKOR mark.

In showing that the domain name was registered in bad faith, the Complainant showed that the website at www.sterkinikor.co.za contains an image of a movie reel and also a link to the complainant’s website at www.ster-kinekor.com.  In the circumstances, the Complainant submitted that the Registrant’s conduct falsely creates an impression that the Registrant is associated with the Complainant.

In addition, the Complainant alleged that the registration of the sterkinikor.co.za domain name amounted to cybersquatting as the Registrant offered to sell it to the Complainant for approximately R200 000.

The adjudicator found that although the domain name was registered as long ago as 2 April 1998, the Complainant and its predecessors in title had proven that they had used the trade mark STER-KINEKOR since the early 1970’s and had acquired a substantial reputation by 1998. The adjudicator found that it must be inferred that the Registrant was familiar with the Complainant and that the Registrant registered the disputed domain name for the sole purpose of misleading the public in to believing that the disputed domain name is associated with the Complainant. 

The Adjudicator described the conduct of the Registrant as “typo squatting” i.e. where the Registrant registers a domain name virtually identical to a trade mark but containing a small typographical error which could easily be made by a consumer when entering the name on the internet.

In the circumstances, the Adjudicator found that the Registrant’s conduct amounted to an abusive registration and it was ordered to transfer the domain name to the Complainant.

dedrego.co.za

The dispute related to a matter in which the Registrant was employed by the Complainant as an IT manager for the period 3 January 2011 – 24 November 2011.  On 28 January 2011 the Registrant registered the domain name dedrego.co.za on instructions of the Complainant but recorded himself as the Registrant. The Complainant only became aware of this fact after the Registrant’s employment was terminated and it transpired that the Registrant was using the domain name to re-direct email correspondence, intended for the Complainant, to himself.  The Registrant had also contacted the Complainant’s clients in an attempt to poach work from the Complainant.

When the Complainant requested the transfer of the domain name, the Registrant requested payment in the amount of R250 000. As a result, the domain name complaint was lodged.

Since the Complainant did not have a registered trade mark for DEDREGO the Complainant submitted evidence that its business was established in 2008 and that the name DEDREGO has been used since 2008. The Complainant also stated that the domain name was registered on its instructions and that the Registrant was well aware of the value that the Complainant attached to the name DEDREGO.

The Complainant submitted that the registration of the domain name was abusive not only because the Complainant had established rights in the name DEDREGO but also because the Registrant requested payment for the domain name and unfairly and prejudicially disrupted the business activities of the Complainant.

The Adjudicator held that, even though the Complainant did not own a trade mark for the name DEDREGO the Complainant had established that it had common law rights in the name DEDREGO as a result of its use of the name since 2008. Furthermore, the Adjudicator found that the name DEDREGO has no obvious meaning and it appears to be an invented word and that the domain name dedrego.co.za is identical to this invented word.

The Adjudicator held that the Registrant’s employment as an IT Manager at the Complainant would generally include the registration of domain names and therefore, the registration of a domain name would normally be a duty that falls within the job description of an enterprises’ IT personnel.  The Adjudicator found that the domain name should be transferred to the Complainant in light of the following factors, which all indicate that the registration was abusive:

·         The Registrant was an employee of the complainant at the time that the domain name was registered.

·         The Registrant made an exaggerated offer to sell the domain name to the Complainant.

·         The Registrant intentionally blocked the registration of a name or a mark in which the complainant has rights and therefore disrupted unfairly the business of the complainant.

CONCLUSION:

The ADR principles outlined in the Regulations and implemented through the domain name dispute process are based on equity and common sense.  Having said this, the basic legal principles of evidence should not be neglected as can be seen from the thelittleblackbook.co.za case study.  All in all, the ADR process is a welcome addition to our body of law and has provided an efficacious and cost effective means to resolve domain name disputes.



[i]Regulation 3(1) and 3(2)- Alternative Dispute Resolution Procedure

[ii]Regulation 4(1)(ii)- Alternative Dispute Resolution Procedure

[iii]Regulation 4(1)(iii)- Alternative Dispute Resolution Procedure

[iv]Regulation 4(1)(iv)- Alternative Dispute Resolution Procedure

 

Contributed by:

Alicia Castleman

Spoor & Fisher

(this article was overseen by Megan Reimers, Partner, Trade Mark Litigation)

 

Please note: The above article was previously published in the September 2012 edition of the Without Prejudice.

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