How to Enforce Your Rights in Domain Name Disputes

A good website can be one of the more valuable assets of your business. It provides immediate access to information about your goods and services and can act as a point of purchase. Use by others of a domain identical or similar to your trademark or trade name can confuse your customers and cause financial damage to your business.

If you have already approached the registrant of the problematic domain name and they are not willing to stop using it, then there are two main avenues you can pursue: arbitration or litigation. Arbitration is generally the more time- and cost-efficient option. Arbitration is generally the more time- and cost-efficient option. Arbitration, however, does have its downsides; namely, the complainant is not able to recover monetary damages. The only remedies available through arbitration are a transfer of the domain or cancellation of the registrant's registration. If your desired resolution involves anything further, you must commence legal proceedings.

Domain name arbitration through the CDRP and the UDRP

Arbitration for domain name disputes is governed by uniform rules. Canadian domain disputes – those over domains that end with .ca – are decided under the CDRP, which stands for CIRA's (Canadian Internet Registration Authority's) Dispute Resolution Policy. Disputes regarding generic domains such as .com, .net, and .org, among others, are dealt with under the Uniform Domain Name Dispute Resolution Policy (UDRP).

Importantly, domain registrants under both regimes must agree to participate in any dispute initiated regarding their domain by a third party as a condition of registration. That means that an initiated proceeding cannot be stopped by the registrant.

The two regimes are similar, both procedurally and substantively. In both regimes, the onus is on the complainant to prove, on a balance of probabilities, that it has the rights to the domain name. The CDRP and UDRP employ similar three-pronged tests to determine whether a domain should be transferred or cancelled. Under the CDRP, this test is as follows:

1. the domain is identical or confusingly similar to a mark in which the complainant had rights prior to the registration of the disputed domain name and in which the complainant continues to have such rights;
2. there is evidence that the registrant has no right or legitimate interest in the domain name; and
3. there is evidence that the registrant registered the disputed domain name in bad faith.

Each of these requirements is addressed in more detail below.

The domain must be identical or confusingly similar to the complainant’s mark

First, the complainant must prove that the registrant’s .ca domain name is “confusingly similar” to the complainant’s mark. The complainant must have had rights in its mark prior to registration of the disputed domain name and must continue to have such rights. A complainant’s “mark” may be a trademark or trade name used in Canada by the complainant (or the complainant’s predecessor in title) to distinguish the wares, services or business of the complainant or the complainant’s predecessor in title from those of others. A complainant’s “mark” may also be a registered trademark, official mark or certification mark.

To determine whether a domain name is confusingly similar to the complainant’s mark, the adjudication Panel considers only whether the domain name so nearly resembles the complainant’s mark in appearance, sound or ideas suggested so as to be likely to be mistaken for the complainant’s mark.

A recent decision from the Canadian International Internet Dispute Resolution Centre demonstrates the importance of this factor. The dispute was between an individual registrant of the domain name investment-finder.ca and complainant 483A Bay Street Holdings LP, a subsidiary of FIL Limited, which owns multiple Canadian trademark registrations for FIDELITY INVESTMENTS and related trademarks.

Although it was alleged that the domain was the source of phishing activities which involved FIDELITY branded application forms for a guaranteed investment bond being sent to users of the site on submission of an enquiry thereby, the fact remained that the domain name itself was not confusingly similar to the complainant’s mark. Having determined this, the arbitrator had no need to consider the remainder of the test and the domain name was ordered to remain with the registrant.

The registrant must have no right or legitimate interest in the domain name

The second factor that the complainant must prove is that the registrant does not have a right or a legitimate interest in the disputed domain name. Section 3.4 of the CDRP provides a non-exhaustive list of circumstances that, if demonstrated, will establish the registrant's interest in the domain. They are as follows:

1. the domain name was a mark that the registrant had rights in and used in good faith;
2. the registrant registered the domain name in Canada in good faith in association with the goods/services sold and the domain name was clearly descriptive in either English or French of
   1. the character or quality of the wares, services or business;
   2. the conditions of, or the persons employed in, production of the wares, performance of the services or operation of the business; or
   3. the place of origin of the wares, services or business;
3. the registrant registered the domain name in Canada in good faith in association with any services, wares or business for which the domain name was understood to be a generic name in any language;
4. the registrant used the domain name in Canada in good faith in association with a non-commercial activity such as criticism or news reporting;
5. the domain name comprised the legal name of the registrant or another name by which the registrant was commonly identified; or
6. the domain name was the geographical name of the location of the registrant's non-commercial activity or place of business.

Importantly, the current CDRP does not require registrants to provide evidence of use of the domains that they have registered.

Even where a registrant does not meet any criteria above, there is an overarching safety net within both the CDRP and the UDRP: a registrant must not only lack rights to the domain name but must also have explicitly registered the domain name in bad faith.

The registrant must have registered the domain name in bad faith

The bad faith requirement is the hardest of the three criteria to meet under both regimes. The CDRP states that, even if a complainant proves both their rights in the trademark and the registrant's absence of rights therein and provides some evidence of bad faith, the arbitration will favour any registrant who can show, on a balance of probabilities, a good faith legitimate interest.

That said, the CDRP has become more amenable to complainants since 2011. Previously, the policy had provided only three acceptable categories of bad faith that aimed to resolve clear cases of cybersquatting. The most recent change to the policy added a much broader fourth category that allows for less-clear-cut cases to be adjudicated. It further stipulated that the grounds are non-exhaustive, and bad faith can be demonstrated through other examples. This is much more consistent with the UDRP policy on bad faith; since the 2011 amendments, the two regimes are quite similar.

The four examples of bad faith provided by the CDRP are as follows:

1. the registrant registered the domain name, or acquired the registration, primarily for the purpose of selling, renting, licensing or otherwise transferring the registration to the complainant, or the complainant's licensor or licensee of the mark, or to a competitor of the complainant or the licensor or licensee, for valuable consideration in excess of the registrant's actual costs in registering the domain name or acquiring the registration;
2. the registrant registered the domain name or acquired the registration to prevent the complainant (or the complainant's licensor/licensee) from registering the mark as a domain name provided that the registrant has engaged in a pattern of registering domain names to prevent registration by rights-holding entities;
3. the registrant registered the domain name or acquired the registration primarily to disrupt the business of the complainant, or its licensor/licensee, who is a competitor of the registrant; or
4. the registrant has intentionally attempted to attract, for commercial gain, Internet users to the registrant's website or other online location, by creating a likelihood of confusion with the complainant's mark as to the source, sponsorship, affiliation or endorsement of the registrant's website or location or of a product or service on the registrant's website or location.

While the above examples are non-exhaustive, cases that fit clearly into one or more of the above categories will likely have a much better chance of succeeding at arbitration.

A 2019 decision from the Canadian International Internet Dispute Resolution Centre shows just how high the bar for a determination of bad faith may be. The decision addressed the use of behaviour.ca by Maser Media, Inc., to which Behaviour Interactive, Inc. objected. Despite Behaviour having shown that the registrant (Maser) had registered 3240 domain names, all of which had either fewer than five pages or were undeveloped and some of which featured famous trademarks (for example, ticket-master.ca), and the panel’s admission that the registrant’s explanation for these registrations was “thin”, the panel was not convinced that the complainant met its burden of demonstrating on a balance of probabilities that the domain name was registered in bad faith.

Obtaining a decision from the arbitration proceeding

A complainant that fulfills its onus of proving the above three requirements on a balance of probabilities will likely be awarded a domain name transfer as the outcome of an arbitration process. The complainant will not be permitted to recover any costs, whether for damage done to its business or for the arbitration itself. The decision is usually fairly quick; a CDRP decision can be rendered within a few months of a complainant initiating the dispute.

Neither a decision in or against the complainant’s favour prevents the complainant from pursuing the matter through litigation.

Differences between the UDRP and CDRP

When considering domain name arbitration as an enforcement option, you should be aware that there remain some differences between the UDRP and CDRP (collectively, the “policies”) that may affect your chances of success. The following are some key differences between the policies:

• Under the CDRP, a complainant must show that it had rights in its mark prior to the registration of the disputed domain name. Under the UDRP, however, a complainant need only show that it “has rights” in its mark. Owing to this and other differences, it is recommended that you seek counsel before initiating proceedings.
• The time to implement a decision (10 days under the UDRP versus 60 days under the CDRP).
• The availability of compensation to the registrant if a complaint is commenced in bad faith (available under the CDRP).
• Whether the factors point to bad faith or a legitimate interest are exhaustive (the CDRP factors are exhaustive – meaning no other factors will be considered).
• A Complainant who files a CDRP complaint and wishes to have the .ca Disputed Domain Name transferred to itself must satisfy the Canadian Presence Requirement (“CPR”). The CPR is met where, for example, a Complainant is a Canadian citizen; a Crown corporation; or a corporation under the laws of Canada or any province or territory of Canada. A foreign corporation will meet the CPR if it is the owner of a trademark which is the subject of registration under the Trademarks Act, but its registration of a .ca domain name will be limited to .ca domain names consisting of or including the exact word component of that registered trademark. For example, in case number CDRP-2247-CIRA, the Complainant, Skechers USA, Inc., brought a CDRP complaint with regards to the dispute Domain Names, skechers.ca and sketchers.ca. With respect to skechers.ca, the Complainant satisfied the CPR provisions by demonstrating its ownership of the CIPO registered trademark for SKECHERS. However, the Complainant did not satisfy the CPR provisions with respect to sketchers.ca because (i) “sketchers” in sketchers.ca does not consist of or include the exact word component of SKECHERS and (ii) the Complainant did not own a trademark for SKETCHERS.

Domain name litigation

If you choose to commence a legal proceeding to obtain a domain name transfer or cancellation, rather than engage in arbitration, or after you have lost an arbitration, you will have to determine the appropriate cause of action. The cause of action under which you will pursue your legal remedy depends on whether your trademark is registered or unregistered. If your trademark is registered, you may claim that the offending domain infringes your trademark. If your trademark is unregistered, you will claim passing off.

Trademark infringement is the easier claim to make. The complainant will need to prove ownership of the registered trademark and provide evidence that the registrant is using a domain that is identical or confusingly similar to the complainant’s trademark or trade name.

Passing-off is more complex. There are three elements that will generally have to be proven by a complainant: the existence of goodwill or a reputation in the unregistered trademark, deception of the public due to a misrepresentation, and actual or potential damage suffered by the complainant as a result of the responding party’s misrepresentation. Both actual and potential damage to the plaintiff will suffice to give life to a passing-off claim where the first two elements are met.

The first requirement, the existence of goodwill, is generally the most onerous and must be proven specifically in Canada. If an unregistered trademark is used elsewhere but the disputed domain is Canadian, a court may be unlikely to award a remedy. Courts have shown a greater willingness to find deception and/or actual or potential damage where a registrant has used a bad faith domain registration to redirect or subvert the web traffic of a competitor.

Complainants who start legal proceedings based on trademark infringement or passing-off may claim a wide variety of remedies, including an injunction, domain name transfer damages or an accounting of profits. Successful complainants may also recoup some of their legal costs.

Comparing arbitration to litigation

Domain name arbitration has some obvious and distinct advantages in comparison to initiating a court proceeding. The process is significantly faster – a decision could be obtained in as little as two months, whereas litigation can take years. Further, arbitration is less expensive. That said, your remedies following arbitration are limited. Initiating court proceedings may be worthwhile if you have suffered significant financial damages to your business as a result of the registrant's improper use of the domain and you are seeking compensation as well as a domain name transfer.

We can help you determine which option would serve you best. Take the first step toward resolving your domain dispute by booking a confidential and complimentary initial telephone appointment with a member of our team.