Out-Law Analysis | 26 Mar 2015 | 9:50 am | 3 min. read
Brand owners might have lost the battle to prevent the expansion of generic top-level domains (gtlds), but a bit of pragmatism now could massively reduce those companies' exposure to reputational risks.
There will be a cost for businesses in registering web addresses rooted at the new domains, but it will be lower than the costs those businesses would face in retrospectively challenging ownership of web addresses that cause damage to their brands. Even then, businesses whose brands are protected by trade mark rights do not always have a legal right to ownership of web addresses featuring the names of their brands.
Whereas businesses used only to have to be concerned with web addresses at a short list of domains such as '.com' and '.net', almost any word can now be registered as a domain. With the launch of thousands of new gtlds already, it seems that some stars and brands are waking up to the risks of not properly protecting their names.
Earlier this week, it was reported that pop star Taylor Swift has bought 'TaylorSwift.porn' and 'TaylorSwift.adult'. However, the issues are not confined to celebrities - Microsoft has purchased equivalent web addresses rooted at the new '.porn' and '.adult' domains for its 'Office' brand.
For brands, the issue will become pertinent again in June when the '.sucks' domain will come into operation. The chance to register web addresses featuring brand names rooted at '.sucks' provides endless opportunities for cybersquatters as well as disaffected customers keen to spread unwelcome critical rhetoric about brands online.
In order to recover a domain name from the registered owner through the Uniform Domain-Name Dispute Resolution Policy (UDRP) procedure, you need to show it was registered in 'bad faith'. However, where a website is going to be used to criticise a company, as seems likely in the '.sucks' example, the registrar will take a stand on the side of free speech and say that its registration to highlight businesses' shortcomings is completely legitimate.
Brand owners may not be able to raise a claim for transfer of ownership of web addresses on trade mark infringement grounds either.
The law is clear. If a trade mark is included in the domain name and the website is used for a commercial purpose which does not fall within one of the legitimate exceptions which allows third parties to use another person’s trade mark, then the domain can be recovered.
An example of a legitimate use might be www.bmwserviceagent.tires for a specialist BMW garage – the '.tires' domain follows the US spelling. However, the same website might not be legitimate if the garage did not sell any tires that could be fitted to a BMW car. Even with a trade mark registration, www.bmw.sucks will be okay and BMW will not be able to recover it provided no other laws, such as defamation or malicious falsehood, are breached.
If there are no trade marks, then brand owners might be able to turn to the law of 'passing off'. It was just before the turn of the millennium that BT, Marks & Spencer and others sued a group of cybersquatters trading through a company called 'One in A Million' to recover domain names registered for the sole purpose of extracting cash from the company which traded by reference to the brand name. These registrations were regarded as "instruments of fraud" and so 'One in A Million' had to hand over the registrations.
In essence the court said that the domain names were registered to misrepresent, that there was a connection between the domain name and the company when there was not, and that this would cause the brand owner damage and that, therefore, passing off had taken place.
Nearly 20 years later, cybersquatters are smarter than they were when the internet was in its infancy and won’t make it easy for companies and successful people to recover the domain names rooted at '.sucks' and '.porn' domain names. If not registered by the rightful party, these domain names will be picked up by unscrupulous people in readiness for when they can be deployed to have the maximum impact on the company’s brand or the person’s reputation.
Why wait for that to happen? Businesses should buy the web addresses that pose a risk to their brands before others get their hands on them.
Iain Connor is an intellectual property law expert at Pinsent Masons, the law firm behind Out-Law.com