Over the past several years, e-commerce use has been growing exponentially, as consumers and corporations alike turn to this convenient method of exchange. As this trend increases, so too does the importance of a corporation’s domain name. Domain names (the words we see before “.com” in a given website’s URL) are consumers’ first impression of a corporation’s product or service, as their wording gives a taste of what the website will hold. Domain names are also often connected to a website’s meta tags, which are used to increase the likelihood that the website will appear as a result during search engine use.
Naturally, many corporations use their trademarked names as their domain names. This way, consumers who are familiar with the corporation’s mark can guess what the website’s URL will be, or can likely find the corporation’s website by entering the corporation’s name into a search engine.
But corporations using their trademarks as their domain names face a problem: other website creators may have domain names that are extremely similar to a corporation’s own domain name. Consumers guessing a corporation’s domain name, or typing a corporation’s name in a search engine, may mistakenly end up at another site with a similar domain name. Alternatively, consumers typing in the correct domain name of a corporation may also be automatically redirected to another site with a similar domain name.
In these cases, a corporation loses business from consumers who never arrive at the corporation’s site. These problems get worse when someone intentionally creates a site with a similar domain name to that of a site of a well-known mark; or when someone creates a site with a similar domain name to a corporation’s and also provides similar products or services to that corporation.
So, what can corporations do in these situations? There are several legal avenues that a corporation can take when their trademark or domain name is tarnished in these ways, and we will outline some of them here.
Deciding on the Best Course of Action
In these types of situations, a corporation’s choice of action will affect the remedy that it can receive. A corporation should choose its course of action based on its needs. For example, if a corporation mainly wants to stop consumers from being confused about the whereabouts and/or content of the corporation’s website, it will want to pursue a course of action whose remedy stops other sites from using domain names similar to their own. Similarly, if a corporation mainly wants to be compensated for the business lost, it will want to pursue a course of action whose remedy is damages.
For Stopping Consumer Confusion: ICANN Dispute Resolution Policy
Disputes over .com domain names are sometimes often regulated by the ICANN Uniform Domain Name Dispute Resolution Policy (UDRP). (Similar policies exist for other sorts of domain names—e.g., the CIRA process for .ca domain names—but discussing them goes beyond the scope of this article.) The remedies available to a complainant through this process are limited to the cancellation of the domain name or the transfer of the domain name registration to the complainant.
The Uniform Domain Name Dispute Resolution Policy (UDRP) applies to every registrant of a .com domain name by virtue of their obtaining it, because every accredited domain name registrar has adopted this mandatory process. Registrants must go through this dispute resolution process if another domain name user has brought a complaint against them asserting that they have done all of the following:
The domain name is identical or confusingly similar to a trademark or service mark in which the complainant has rights; AND
The domain name holder has no rights or legitimate interests in respect of the domain name; AND
The domain name has been registered and is being used in bad faith.
For Damages: Legal Action of Passing Off
In many cases, complainants find the UDRP too narrow: either the policy does not adequately cover their concern, or the remedies are insufficient for their needs. The policy does not, however, preclude complainants from also bringing a legal action in court. The legal action that best lends itself to many domain name disputes is passing off.
Passing off in the context of domain name disputes requires that the defendant’s use of a domain name imports the reputation or knowledge of the plaintiff’s service or product into the consumer’s mind when they go to the defendant’s site (British Columbia Automobile Assn v OPEIU). In this way, the plaintiff is essentially trying to stop the defendant from capitalizing on the goodwill attached to the plaintiff’s mark.
Remedies for passing off can include interim and interlocutory injunctions; compensatory damages; and, if the defendant repeats their behaviour, or if it is otherwise a marked departure from the ordinary standards of behaviour by being planned or deliberate, punitive damages (Dentec).
Note that there is a two-year limitation period on this type of action.
Passing off requires the plaintiff to prove three criteria (Ciba-Geigy Canada Ltd v Apotex Inc, 1992 CanLII 33, SCC [Ciba-Geigy]):
Goodwill for the plaintiff’s company exists in the minds of consumers. This criterion is especially important in domain name disputes if a corporation conducts a significant portion of its business through the site, because, “[by] implication, they attach their goodwill to their services supplied through their ‘get-up’, their trade name” (Airline Seat Co v 1396804 Ontario Inc, 2000 CanLII 22666, ONSC [Airline Seat Co] at para 13).
The public was deceived due to a misrepresentation, so that they are led to believe that there is some business connection or association between the parties (i.e., so that confusion exists).
Actual or potential damage will occur to the plaintiff. In cases of passing off, potential damage is presumed when it is caused by the plaintiff losing control over its reputation through a misrepresentation (Ciba-Geigy). The defendant’s use of a domain name similar to the plaintiff’s can cause this loss of control (Law Society of British Columbia).
Again, the complainant should obtain independent proof of the above.
Other Possible Legal Actions
This article has mainly explained the ICANN dispute resolution process and the tort of passing off, but below we will describe some other causes of action that may be more appropriate to a complainant’s situation. Still, these causes of action describe situations where domain name similarity creates confusion for consumers about the location and/or content of the corporation’s website.
Trademark Infringement: A plaintiff may seek an interlocutory injunction on the use of the confusing domain name as remedy for breach of trademark. To achieve this remedy, the plaintiff must meet a three-part test: first, there must be a serious issue to be tried; second, the plaintiff must suffer irreparable harm without the injunction; and third, there is a balance of convenience.
Breach of Copyright: A breach of copyright claim may help corporations whose consumers, in trying to find the corporation’s website, find websites that have used the corporation’s website design, logo, or other artistic features. To succeed at this claim, the plaintiff must show that the defendant reproduced original artistic work belonging to the plaintiff without the plaintiff’s permission.
Defamation: A defamation claim can help corporations whose consumers, in trying to find the corporation’s website, come across websites that are intentionally trying to diminish the corporation’s reputation. To succeed at this claim, the plaintiff must show that the words in question have been published, that the words refer to the plaintiff, and that the words—in their ordinary or natural meaning, or in an extended meaning—are defamatory of the plaintiff.