Domain Names and Trade-marks

Materials prepared for the Continuing Legal Education Society of British Columbia seminar "Internet Law for Small Business"

Photo by Warchi/iStock / Getty Images

Summary

After providing an over view of the Internet domain name space, with emphasis on the .CA (Canadian) top level domain, the paper (1) introduces legal issues relating to domain name allocation arising out of the failure to take into account national trade-mark laws when allocating domain names, and (2) provides an overview of selected trade-mark fundamentals in the context of use on the Internet.

The paper points out the control that U.S. interests have over the major top level domains (.COM, .NET, .ORG. and .EDU) and the applicability of U.S. laws to domain name allocation and retention. The paper predicts a decline in the popularity of the .COM domain, and encourages the use of the .CA domain by Canadian residents as a way of ensuring that domain name allocation and retention is governed by local trade-mark law.

The paper ends with several recommendations regarding choosing a domain name, including suggesting pre-clearing a domain name on at least the same basis that is required in Canada to obtain a federally approved corporate name.

The Domain Name Space

The Internet - A Brief History

The Internet is a network of networks connected to each other through national "backbones" and international trunklines.

The Internet started life in 1969 as a research project in networking known as ARPNET, funded by the U.S. Department of Defense. The first node on the network was at UCLA, and soon after that at Stanford Research Institute. By 1971 there were 23 hosts on the network. In 1973 the first international connection to ARPANET was made when England and Norway joined. In 1983 name server technology was developed at the University of Wisconsin, removing the need for users to know the exact path to other systems on the network. In 1986 NSFNET was created with a backbone speed of 56Kbps. By 1989 (1) the number of hosts on the network exceeded 100,000 for the first time, (2) the NSFNET backbone was upgraded to T1 status (1.544Mbps), and (3) the first relays between a commercial electronic mail carrier and the Internet were made - MCI Mail through the Corporation for the National Research Initiative and CompuServe through Ohio State University. In 1992 the World-Wide Web standard was released by CERN - Tim Berners-Lee was the developer. In 1993 InterNIC was created by NSF to provide specific Internet services and the White House came on-line. In 1994, shopping malls arrived on the Internet. And the rest is history.

The Top Level Domains

The Internet domain name space is a structure of alphanumeric addresses which point to particular computers which are part of the Internet.

The major top level domains are .EDU, .NET, .ORG, and the most popular, the .COM domain. These domains are administered by Network Solutions Inc. (a U.S. corporation), which acts as the Registrar. In addition, each country has been assigned its' ISO two character country designation as a geographic top level domain.

Given that Internic is subject to U.S. law, the enforceability of foreign judgements relating to the top level domain name allocation and retention is a serious concern. The international community also believes that U.S. interests dominate domain name allocation and retention.

The Internet Assigned Numbers Authority (IANA) has delegated to the .CA Domain Registrar the authority to issue top level domain names with the suffix ".CA".

Contrasting Domain Names to Trade-marks

By their very nature, domain names are also trade-mark like in nature. Since the recognition of the Internet’s importance to business, Internet addresses are increasingly viewed by business as a key component of corporate identification. As a result of this, a collision between the allocation of domain names and national trade-mark law was inevitable.

The conflict between national trade-mark regimes and domain name allocation can be divided into two categories - domain name allocation/entitlement and trade-mark enforcement.

Registration of a domain name is an inexpensive administrative procedure, without regard to the trade-mark regime of Canada, the U.S. or any other country. Trade-mark applications go through a thorough and tested process on a national basis before approval. Anyone can apply for a domain name. Only qualified trade-marks can be applied for, with the exception of trade-marks based on "proposed use". There are no requirements regarding the composition of domain names.

While the same name can be registered as a trade-mark with respect to more than one product or service by different owners, a domain name is only available once in a given domain name space. The effect of this can be to prevent a trade-mark owner from having a domain name which is the same as her trade-mark.

The corollary of this is that it is possible to obtain a domain which differs from another by only one character. The negative result of this is a significant increase in the potential for trade-mark like "confusion" between two domain names, and for an infringer to adopt a domain name almost identical to a registered trade-mark.

Selected Overview of Canadian Trade-mark Law

Statutory

A trade-mark is a statutory right conferred by the Government of Canada, based on use, to the exclusive use of a word, symbol, or combination of both, with respect to specified products or services. The purpose of a trade-mark is to distinguish products or services or both from those of others by creating a limited monopoly. In Canada, trade-marks are renewable every fifteen years, in perpetuity, assuming continuing use and distinctiveness.

Section 19 of the Trade-marks Act grants the owner of a trade-mark the exclusive right to "use" the exact mark in respect of the described wares or services throughout Canada. Section 20 of the Trade-marks Act prohibits the use of a confusing trade-mark with the advertising, sale or distribution of any goods or services unless the use does not depreciate the good-will of a registered trade-mark. Section 22 of the Trade-marks Act prohibits the use of a trade-mark in any way that is likely to depreciate the goodwill associated with a registered trade-mark.

Additional provisions found in Canadian legislation, such as the Competition Act, also restrict passing off, misleading statements, dishonesty, or a depreciation in goodwill relating to trade-marks.

"Use" differs for Products and Services

Section 4 of the Trade-marks Act defines when a trade-mark has been used - important both to qualify a trademark initially and to restrain others from using it.

In Canada, trade-marks relating to services enjoy a greater degree of protection than do trade-marks relating to wares/products. Subsection 4(2) deems use to occur whenever a trade-mark is used or displayed in conjunction with the performance or advertisement of a service.

In order to constitute deemed use with respect to products, the trade-mark must either (1) be used in association with the products at the time of the transfer of either the property rights or the physical possession of the products, or (2) marked on the products themselves or on the packages in which they are distributed -subsection 4(1).

This also means that in Canada, one cannot use a third party’s trade-mark on the packaging of goods, or at all in conjunction with services, without permission, because this would constitute use - for example, this is how Microsoft Corporation restricted the use of the "Windows" logo on software packaging.

"Use" in an Internet Context

As with corporate names, the mere use of a domain name does not result in "use" for purposes of trade-mark entitlement.

Proof of use on the Internet with respect to products, as contrasted with services, raises technical difficulties in creating a trade-mark. The difficulties are not as great for digital products as they are with hard goods.

For example, in Internet based transactions, it is not hard to imagine title to products passing at the time of the transaction. This is consistent with the instantaneous payment possible in such a transaction. Additionally, it is conceivable that possession might also pass in the case of digital products. The trade-mark must be in "use" at this point to qualify for registration, or to constitute an act of infringement. In either of these circumstances, it is possible to imbed the trademark in the electronic goods to constitute marking and use for purposes of the act. See BMB Compuscience Canada Ltd. v. Bramalea Ltd.(1989) 22 C.P.R. (3d) 561 (F.C.T.D.).

If neither possession (particularly with respect to hard goods) or title passes at the time the contract is entered into, the trade-mark must be in use at the time either of these events subsequently take place.

In order to qualify a domain name as a trade-mark, the domain name must be in "use" at one of the two relevant times. This will effect (1) whether one acquires the right, by use, to a particular domain name by virtue of trade-mark law, and (2) whether a domain name is in fact being used in contravention of the exclusive rights of the owner of a trade-mark.

Whether the combination of the display of a trademark and the link to another site displaying goods or services similar to those protected by the trademark has been an issue. In the U.S., instances involving linking, framing and the use of metatags have been held to constitute trade-mark "use", and consequently infringement.

Jurisdictional issues arising out of Internet use will also result in uncertainty for the conceivable future. For example, it remains to be seen how the legal system will respond when a trademark is lawfully used in the jurisdiction where it was granted, but is alleged to be unlawfully used electronically in another jurisdiction.

It has been speculated that changes in technology will relegate many domain names to relative obscurity. This is happening to a degree already with the use of index services which provide links and descriptions to other sites in a way that diminishes name prominence.

"Making known" as an Alternative to "use"

Section 5 of the Trade-marks Act provides that in limited circumstances a trade-mark will qualify for registration in Canada as a result of having become "well known".

Trade-marks and Confusion

When considering whether a trade-mark is confusing with an other trade-mark, the courts have established that consideration must be given to all surrounding circumstances, including:

(1) inherent distinctiveness of the trade-mark and the extent to which the trade-mark has become know;

(2) the length of time each has been in use;

(3) the nature of the wares or services;

(4) the nature of the trade;

(5) the degree of resemblance.

There is a growing awareness in Canada of the possibility for confusing domain names. The prudent, but expensive and time consuming, course of action is to obtain a domain name in all of the name spaces that one qualifies for. For a business, this conceivably would include ".com", ".ca", "org" and ".net" plus other relevant geographic domain name spaces.

Unregistered (Common law) Trade-marks

Canada also has a common law trade-mark regime recognizing unregistered trade-marks. The ability to prevent a competitor from pretending that her goods, business or services are those of another is continually changing.

This right is closely related to s. 7 of the Trade-marks Act. The plaintiff must prove (1) conduct directing public attention to the defendant’s wares or services, (2) in such a way as to cause confusion in Canada (3) at the time the defendant started to direct attention to the goods or services.

Passing off

Reckitt & Coleman Products Limited v. Borden Inc. & Ors [1990] R.P.C. 341 established the three requirements required at common law of (1) recognition of goodwill by the public, (2) misrepresentation to the public leading to or likely to lead the public to believe that the goods or services are authorized by the plaintiff, and (3) actual or likely damage to the plaintiff. Goodwill can be of a local nature for either national or international claimants. Intent on the part of the defendant is immaterial. Proof of (1) and (2) can give rise to a presumption of damages.

Direct Infringement

To quote Hughes on Trade marks, (Butterworths Canada Ltd., 1984-1996) at 586,

"The extent of the exclusive right given by s. 19 of the Trade-marks Act is defined by the mark as registered; the ambit of protection for it is expanded by s. 20 when what is done by another is likely to cause confusion and by s. 22 when what is done is likely to depreciate the value of the goodwill attached to the trade marks."

Whether the mere use of a domain name constitutes "use', creates confusion or depreciates the goodwill of a trade-mark depends heavily on the facts of each individual case. CITV of Edmonton, Alberta, through its parent WIC Television Ltd. claimed infringement of the trade-mark CITV - WIC Television Ltd. v. ITV Technologies Inc. (Fed. Crt. T1459-97) . The Federal Court of Canada issued a temporary injunction in November, 1997 ordering ITV Technologies Inc. to stop operating a web site with the Internet address itv.net.

The result of an action based on a claim of trade-mark infringement is generally an order that the infringer cease and desist from the particular conduct. On occasion, the court may also order the impoundment and destruction of the goods. Nothing in the Trade-marks Act contemplates the infringer delivering up its property - in this case the domain name. This has not held back U.S. courts in similar circumstances from ordering a defendant to give up a domain name.

The combination of Canadian legislative provisions appear to bestow similar rights in Canada as those conferred in the U.S.. Having said that, Canada has not adopted the approach of the U.S. in permitting limited trade mark use by third parties in the context of encouraging freedom of speech. Nor does Canada have the extent of remedies available in the U.S. for different types of infringement - such as the Federal Trade-mark Anti-Dilution Act and the Lanham Act.

Recommendations

Prior to Choosing a Domain Name

Prudence recommends that searches, analogous to those made prior to adopting a trade-mark, be performed prior to adopting a domain name.

Choosing the Domain Name Space

Unless a way is found to reconcile the inability of the domain name space to grant multiple domain names with the ability of the trade-mark regime to do so, it is inevitable that other domain name spaces such as the .CA domain will continue to be popular. In addition, the applicability of U.S. law to the .COM domain name space is a disincentive to persons not residing in the U.S. to choosing .COM for their domain name space.

Doing Business in Other Jurisdictions

When products or services are supplied into other jurisdictions, trade-mark rights owned by others in that jurisdiction should be considered. In particular, consideration should be given to whether the domain name is being used as a trade-mark pursuant to the relevant legislation in the foreign jurisdiction.

Relaxation of Mandatory Obligation to Enforce Trade-mark rights

Many legal regimes require trade-mark owners to enforce trade-mark rights or be deemed to have abandoned their trade-mark. A relaxation of this obligation may result in fewer companies feeling that they have to restrain trade-mark like domain names in other domains.

GARY DUNN, LAWYER & MEDIATOR

2768 WEST BROADWAY AVENUE, #568

VANCOUVER, BC V6K 4P4, CANADA

+1 604-739-7011

GARY@DUNN.COM

 

DISCLAIMER

THE FOREGOING IS NOT INTENDED TO CONSTITUTE LEGAL ADVICE. YOU SHOULD CONTACT YOUR LEGAL ADVISOR ABOUT YOUR SPECIFIC LEGAL PROBLEM.