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How to Enforce Your Rights in Domain Name Disputes

By: Christopher Heer, Stefanie Di Giandomenico, Daryna Kutsyna | Last updated: August 15, 2018
A good website can be one of the valuable assets of a business. It provides immediate access to information about the goods and services the business sells and can act as a point of purchase. When someone else is using a domain that is identical or similar to your trademark or trade-name, this can confuse your customers and be financially damaging 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. However, it has downsides; namely, the complainant is not able to recover monetary damages. The only remedies that arbitration can provide are a transfer of the domain or the cancellation of the registrant's registration. If you want anything other than one of those two things, then 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 – 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).

Crucially, domain registrants under both regimes must agree to participate in any dispute initiated in regard to 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 they have the rights to the domain name. Both the CDRP and UDRP employ a three-prong test to determine whether a domain should be transferred or cancelled:

  1. the domain is identical or confusingly similar to a mark which the complainant had rights to prior to the registration of the disputed domain name;
  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 a registered mark

The second factor that the complainant must prove is that the registrant does not themselves 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 which 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 thereof 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 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 to both the CDRP and the UDRP: a registrant must not only not have rights to the domain name but had to have explicitly registered it 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, 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-exclusive, and bad faith can be demonstrated through other examples. This is much more consistent with the UDRP policy on bad faith; since the 2011 amendment, 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 a 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 in order to prevent the complainant (or a complainant's licensor/licensee) from registering the mark as a domain name provided that registering domain names to prevent registration by rights-holding entities is a pattern of behavior in which the registrant previously engaged;
  3. the registrant registered the domain name or acquired the registration primarily to disrupt the business of the complainant, or their 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 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.

Obtaining a decision from the arbitration proceeding

A complainant that fulfills their 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. They will not be permitted to recover any costs, whether for damage done to their business or for the arbitration itself. The decision is usually fairly quick; a result can be expected several months after initiating the dispute.

Neither a positive nor a negative decision prevents the complainant from pursuing the matter through litigation.

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 it. If it 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 as a 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 a goodwill or a reputation of the unregistered trademark; deception to the public due to a misrepresentation; and actual or potential damage caused to the complainant. The first requirement, proving the existence of goodwill, is generally the most onerous and will have to be proven specifically in Canada for .ca domain names. If the unregistered trademark is used elsewhere but the disputed domain is Canadian, the court is unlikely to award remedies. Both actual and potential damage to the plaintiff will suffice to give validity to a passing-off claim. However, Canadian courts have not been favourable to passing-off actions pursued immediately after a domain name registration before damage has occurred.

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 full litigation can take years. Further, arbitration is less expensive. However, your remedies 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 be best for you to pursue. Take the first step to resolving your domain dispute by booking a confidential and complimentary 15-minute phone call.