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Domain name disputes: An important policy update

The Canadian Internet Registration Authority (“CIRA”) is the body that decides Canadian domain name disputes and has the power to order the transfer of a domain from one entity to another. For a while now, the CIRA has primarily been useful in clear cases of domain squatters (e.g. those who register a domain name to try to sell it to the party that holds the trademark rights or to block a trademark holder from registering that domain name) and competitors registering another entity’s name or trademark. In the past six months this has been changing and opening up more situations where trademark right holders can have relevant “.ca” domains transferred to them.

What changed? An August 2011 update to the rules governing domain name disputes that, among other changes, expanded the definition of bad faith. In particular, the Domain Name Dispute Resolution Policy (the “Policy”) was updated to Version 1.3 and the Domain Name Dispute Resolution Rules were updated to Version 1.4, both of which were released 22 August 2011.

In order for a domain name to be transferred a complainant has to show all of three things. First, that the registrant’s domain name is confusingly similar to the mark in which the complainant has rights (Policy 3.1(a)), second, that the registrant has no legitimate interest in the domain name (Policy 3.1(b)), and third, that the registrant registered the domain name in bad faith (Policy 3.1(c)).

The August 2011 update of the Policy significantly changed each of these aspects. This article concentrates on the changes to the bad faith requirement because it has, in the past, often been the biggest hurdle to use of the CIRA dispute process.

Under the previous version of the Policy there were only three possibilities for finding bad faith:

a) that the Registrant registered the domain name primarily for the purpose of selling the domain name to the Complainant or a competitor at a profit;

b) that the Registrant registered the domain name primarily for the purpose of blocking the Complainant from registering as part of a pattern of registering domain names to block others with Rights in marks from registering them as domain names; and

c) that the Registrant registered the domain name or acquired the Registration primarily for the purpose of disrupting the business of the Complainant, or the Complainant’s licensor or licensee of the mark, who is a competitor of the Registrant.

These restrictive categories meant that it was very difficult to get a domain name transferred to you unless the registrant was a serial squatter or actively trying to disrupt your business.

The new Policy introduced two important changes to the bad faith requirement. First, a fourth possibility was added for finding bad faith, namely:

d) that the Registrant has, for commercial gain, tried to attract visitors to the Registrant’s website by creating a likelihood of confusion with the Complainant’s Mark as to the source, sponsorship, affiliation, or endorsement of the Registrant’s website.

Second, bad faith, which used to apply “if and only if” one of the categories applied, was expanded such that the categories became a non-exhaustive list.

The the new definition of bad faith has recently been applied in a few example cases. First, Glen Raven Inc. v. Kotarac, CIRA Decision 173 (2011), demonstrated the effect of the new open-ended definition of bad faith. Here, the Registrant had registered the domain SUNBRELLA.CA and the Complainant, Glen Raven Inc., applied to have it transferred on the basis of the Complainant’s registered trademark SUNBRELLA (Canadian trademark No. TMA184106).

The decision panel found that the Registrant’s activities did not fall within any of categories a) to c) of the definition of bad faith. Also, because the Registrant had not yet actually established a website, category d) was found not to apply. However, the panel was sceptical as to why “Sunbrella” was chosen in the face of the Complainant’s acknowledged trademark rights and the panel appeared to place at least some onus on the Registrant to show evidence of a lack of bad faith. The panel did not accept any of the reasoning provided by the Registrant for selecting “Sunbrella” and found that use of the domain name would raise a likelihood of confusion with the Complainant’s trademark. As a result, even though the Registrant didn’t fit exactly within any of the headings of bad faith under the Policy, the addition of the words “but without limitation” to that section of the Policy allowed the panel to find that there was bad faith.

Next, TWENGA v. Anonymous, DCA-1351-CIRA (2012) saw an application of Policy category d) and how broadly it can be applied. The Complainant was a French company that operates a shopping platform that allows for price comparisons, while the Registrant was registered as privacy protected and remained anonymous. The disputed domain, TWENGA.CA, is a parking site where the domain is being offered for sale. Often, a registrant will not supply any website content and the domain name registrar will populate this kind of site with links that they think may be relevant (and these links usually offer goods and services for purchase). That appears to be what happened here. Also, because the Complainant’s business is online sale of goods and services, these links were found to be for competitors of the Complainant. As a result, the Registrant was found to have registered the domain name in bad faith under category d) – trying to attract website visitors by creating a likelihood of confusion with the Complainant’s trademark.

Finally, The Exite Group v. Zucker International Marketing Inc., CIRA Decision 176 (2011) (“Exite”) and Ontario Power Authority v. The Urban Environment (Toronto), DCA-1354-CIRA (2012) (“OPA”) are decisions that both show another important effect of the updated definition of bad faith in the Policy: that actions occurring after registration can now be enough to show bad faith. Prior to the Policy update, all of the categories of bad faith required that the Registrant have bad faith at the time of registration of the domain name. The addition of category d) opened up the potential for showing bad faith, and gaining control of a domain name, on the basis of post-registration actions by the Registrant.

Exite involved a dispute over the BELLAPIERRE.CA domain between a trademark holder (the Complainant) and a former distributer (the Registrant). The Registrant had continued selling the Complainant’s goods through the disputed website without the Complainant’s authorization. In this decision, the domain name was found to not have been registered in bad faith at the time of registration (e.g. under category a) of the Policy) because the domain name was registered with the intention of lawfully selling the Complainant’s goods as a distributer. However, due to the lack of continuing authorization from the Complainant, the Registrant was found to have attempted to attract website visitors by creating a likelihood of confusion with the Complainant’s BELLA PIERRE mark and so, to have registered the domain name in bad faith under category d) of the Policy.

In OPA, transfer of the domain name HOMEASSISTANCEPROGRAM.CA was ordered under category d) of the Policy. The Registrant had apparently attended a seminar held by the Complainant where the HOME ASSISTANCE PROGRAM mark was displayed then registered the disputed domain name. While there did not appear to be any evidence of what type of website the Registrant was running, the decision found that the Registrant had improperly placed itself between the Complainant and its licensees whenever anyone accessed the Registrant’s website rather than the Complainant’s website. As a result, the panel found that the Registrant’s activities after registering the domain name resulted in a likelihood of confusion between the Registrant’s website and the Complainant’s mark and so, the domain name was registered in bad faith.

Each of the decisions reviewed in this article demonstrate that, under the new updated Policy, it has become easier to achieve the transfer of a disputed domain name in Canada. Not only can post-registration activity be used to demonstrate bad faith registration, but the list of bad faith categories has been made non-exhaustive. As a result, there may be arguments available in a number of new situations to convince a CIRA panel that a registrant has acted in bad faith and that a disputed domain name should be transferred to a complainant. It will certainly be worth monitoring the CIRA decisions throughout this new year.

By Michael G. Fink

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