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International and Comparative Law Journal (ICLJ)

COVER ARTICLE

Fighting ‘Cybersquatting’ with The Trade Marks Act 1994: A Critical View on the Dominant Demand of a Separate Statute in UK Regarding the Increasing ‘Domain Name Disputes’ Barrister Tanjib Rashid Khan1 1. INTRODUCTION With great power comes great responsibility; and with this great responsibility comes a greater possibility of exploitation of power. Likewise, the power of digital technology is bringing new opportunities to be exploited and so, at the present time, we have seen the emergence of a new breed of cyber criminals, i.e. Cybersquatting. This cybercrime is the particular dispute that has received

much

concentration

by

Judiciary

and

Legislative

throughout the globe. Since the Mid 90's, the period from which internet has become commercialized and empowered mass public with the great power of digital technology; the cybersquatting appeared as a shortcut to the cyber criminals for earning quick The author is a Barrister-at-Law of the Honourable Society of Lincoln‟s Inn, and an Advocate. He is also working as a Lecturer & Academic Guidance Tutor (Research & Journal) at the London College of Legal Studies (South) 1

International and Comparative Law Journal (ICLJ)

money by abusing this great power. Currently, different states have implemented specialized legislations to combat this cybercrime2, but UK is yet to adopt one and still trying to defend cybersquatting with the orthodox laws.

2. CYBERSQUATTING The term „Cybersquatting‟ means the abusive registration and usage of a domain name3 with bad faith intending to profit from the goodwill of a trade mark belonging to someone else. The cybersquatter4 then offers to sell the domain to the person or company who owns a trade mark contained within the name at an exaggerated price. For example, the www.wallstreet.com; this was registered for $70 and sold for $1 million by the cybersquatters. The term is derived from "squatting", which is the act of occupying an abandoned or unoccupied space that the squatter does not have permission to use. There are different categories of cybersquatting offenders-

e.g. the USA has adopted the Anticybersquatting Consumer Protection Act 1999 (ACPA), 15 U.S.C. § 1125(d) 3 Domain Name system (DNS) was introduced solely with the purpose of aiding users; in as much as they can be remembered more easily. This is because the actual addresses are known as Internet Protocol and are composed of four sets of numbers, between 0-255 separated by dots, such as 123.245.35.67. Domain names are registered in a hierarchy, with a number of levels. At the top level, domains are registered as either country codes (ccTLD's) such as for example, .uk, .us, .ie or as generic (gTLD's) such as .com or .net. At this level, the root servers will maintain a table of all the names registered under that level and then direct all enquirers to the next level. Using .uk as an example, in Britain, Nominet operate the top level country code domain name .uk name server which contains second level domains under it, such as co.uk or org.uk. 4 The person who commits cybersquatting 2

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

Domainsquatting/ Domain Name Hijacking: A person commits

bad faith registration of domain names, which is identical to a reputed company‟s registered trade mark; here the cybersquatter sells to the highest bidder, or collect money via Domain Parking5. 

Reverse Domain Name Hijacking: It is the practice whereby a

bigger firm tries to force a smaller firm who has legitimately registered a website to hand it over to them. 

Typosquatting: Here the domain names are very similar to a

famous brand but there is a slight misspelling to attract custom to the site (e.g. spelling Google as Googel). 

Dropcatcher: Someone rushing to purchase popular domain

names quickly when registrations lapses, mainly through Domain Tasting6. 

Parody/ Sucks.com: Here a site is registered such as

microsoftsucks.com with the intention of damaging a firm‟s reputation. 3. FIGHTING CYBERSQUATTING WITH THE TRADE MARKS ACT 19947: It has already been mentioned that UK has yet not adopted any specialised legislation for combating cybersquatting. Thus, since the late 90‟s UK has been fighting this cybercrime with the Trade Having a small site with only advertising linked to related domain names, where owners are paid a small amount when a person clicks on an ad 6 Using domains for a five-day free refund period to test, then drop for refund the ones which performed poorly 7 1994 CHAPTER 26 5

International and Comparative Law Journal (ICLJ)

Marks Act 1994 (TMA), which according to Charlotte Waelde, is a „creative use of trade mark law by the courts‟.8 The result is evident. In 2011, trade mark holders filed a record number of cybersquatting cases covering 4,781 domain names with the WIPO Arbitration and Mediation Center (WIPO Center) based on the Uniform Domain Name Dispute Resolution Policy (UDRP). It is not surprising that UK is the third highest country in respect of number of cases brought to WIPO Center9. Moreover, it is mentioned in the Introductory Text of the TMA 1994 that the Act is enacted to „make new provision for registered trade marks‟, and nowhere in this statute can the term „domain name‟ or „cybersquatting‟ be found. It prevents the unauthorized use of a trade mark as a trade mark rather than use of a trade mark as a domain name. Therefore, it is quite unlikely that an effective and permanent solution of cybersquatting can be achieved with this legislation. 3.1 One in a Million Case10 In the famous One in a Million case the Court of Appeal of UK applied the TMA and found the defendants guilty of „Passing Off‟11 Waelde, Charlotte „Trade marks and domain names. There's a lot in a name‟ in Edwards and Waelde (Eds) „Law and the Internet: A framework for electronic Commerce‟ (2000: Hart Publishing) at chpt 7. 9 WIPO Prepares for Launch of New gTLDs while Cybersquatting Cases Continued to Rise. Geneva, March 6, 2012. PR/2012/704 10 British Telecommunications plc and another v One In A Million Ltd and others; and other actions [1998] 4 All ER 476 11 This is mainly a common law tort which can be used to enforce unregistered trademark rights. The tort of passing off protects the goodwill of a trader from a misrepresentation that causes damage to goodwill. The law of passing off prevents one person from misrepresenting his or her goods or services as being 8

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International and Comparative Law Journal (ICLJ)

and „Trade Mark Infringement‟; applying Section 1 (1) and Section 10 (3) of the TMA. This was in relation to cybersquatting through purchasing and then subsequently offering for sale, domain names associated

with

well-known

British

brands

such

as

marksandspencers.com, sainsburys.com and harrods.com. For the sake of focusing on my research question I will concentrate only on Trade Mark Infringement issues of the case.

3.1.1 Held - Trade Mark Infringement Section 10 (3), which deals with trade mark infringement states that“A person infringes a registered trade mark if he uses in the course of trade a sign which- (a) is identical with or similar to the trade mark, and (b) is used in relation to goods or services which are not similar to those for which the trade mark is registered, where the trade mark has a reputation in the United Kingdom and the use of the sign, being without due cause, takes unfair advantage of, or is detrimental to, the distinctive character or the repute of the trade mark.” If we break down the section then we will find the following requirements to make someone guilty of trade mark infringement1. Using a sign/mark identical with a registered trade mark 2. Using it in the course of trade 3. Using in relation to non-identical goods or services the goods and services of the claimant, and also prevents one person from holding out his or her goods or services as having some association or connection with the plaintiff when this is not true.

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4. The registered trade mark has a reputation in UK 5. Using sign without due cause 6. Using it to take unfair advantage or cause detriment to the

reputation

If we apply the requirements of this section in a classic cybersquatting case, we might see only the last four to be satisfied. Significantly, a domain name is neither a graphically stable sign nor a mark which can be identical to a trade mark, thus in no circumstances can the first requirements be fulfilled. Moreover, common sense would dictate the second requirement to fail as the website is not being actively used in cybersquatting to sell products and conversely would probably have a notice to the effect „website under construction‟ until it is sold.

Yet strangely, in the One In A Million Case, the judges have found the first requirement satisfied by a more stretched application of Section 1 (1) of the TMA, which states“In this Act a “trade mark” means any sign capable of being represented graphically which is capable of distinguishing goods or services of one undertaking from those of other undertakings. A trade mark may, in particular, consist of words (including personal names), designs, letters, numerals or the shape of goods or their packaging.”

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Furthermore, the court held that the second requirement of trade mark infringement has also been satisfied by giving the following interesting reasoning“Use of a trade mark in the course of the business of a professional dealer for the purpose of making domain names more valuable and extracting money from the trade mark owner amounted to use in the course of trade.”12

However, in this case, the court dismissed the appeal and upheld the trial judge‟s grant of final injunctions quia timet, by which the unduly registered domain names had been transferred to the claimant. Later, this landmark yet much criticized ratio decidendi has been followed by a number of English cases13. 3.2 Phones 4u Case14 This is a case which was held eight years after the One In A Million Case and has been distinguished. Here, the action for „Passing Off‟ succeeded but the infringement of registered trade mark failed. The appellants were well known mobile phone retailers that had as a registered trade mark a red, white and blue logo containing the words "phones4u" in stylised form and the registered domain name "phones4u.co.uk". The respondent had registered and used the domain

names

and

email

addresses

"phone4u.co.uk"

and

Para 910 E.g. easyJet Airline Co Ltd and others v Dainty; (Ch D, 19 February 2001) 14 Phones 4u Ltd and another v Phones4u.co.uk Internet Ltd and others; [2006] EWCA 244 12 13

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"phone4u.com" in the same year as the appellants registered its domain name. In this case the judge interpreted Section 13 (1) of the TMA to discard the claim for trade mark infringement.

3.2.1 Held – No Trade Mark Infringement Section 13 (1), Registration subject to disclaimer or limitation, states that“An applicant for registration of a trade mark, or the proprietor of a registered trade mark, may- (a) disclaim any right to the exclusive use of any specified element of the trade mark, or (b) agree that the rights conferred by the registration shall be subject to a specified territorial or other limitation; and where the registration of a trade mark is subject to a disclaimer or limitation, the rights conferred by section 9 (rights conferred by registered trade mark) are restricted accordingly.”

If we break down the section then we will see that a trade mark registration is subjected to limitation, e.g. colour. That means any trade mark consisting of different colours cannot be denoted as making „deceptive confusion‟ in general public, rather that can be termed as „mere confusion‟, which may be quite apparent for a descriptive name like phones4u. Therefore the first requirement of trade mark infringement (i.e using a sign/mark identical with a registered trade mark) cannot be satisfied.

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In this case, the court took expert advice from Mr James (the Head of Trade Marks Registry Practice) and reference of Mr Fletcher Mounlton QC (Famous Intellectual Property Lawyer of UK) to come to a conclusion regarding the non existence of the alleged trade mark infringement. Thus the judge resolute that“The registration certificate of the mark sued upon says “The mark shown below has been registered under No 2185824 as of the date 8 January 1999”. What is “shown below” is the logo... The next line says “The mark (i.e. trade mark of phones 4u) Is limited to the colours red, white and blue. I call this “limitation”... In the result I would dismiss it (i.e. the appeal) on trade mark infringement”

Therefore, if searched, there would be numerous inconsistent cases found like One In A Million Case and Phones 4u Case. To remove this inconsistency and to fight cybersquatting effectively, we need a specialised statute on this cybercrime.

4. OTHER EFFECTIVE ALTERNATIVE OF FIGHTING CYBERSQUATTING The offence of cybersquatting doesn‟t constitute a classic trade mark infringement, as it simply doesn't meet the requirements. Thus to combat this cybercrime we should not try to stretch the existing orthodox laws to fit cybersquatting in it, but we need to be innovative to come up with effective alternatives for doing the same.

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4.1 Nominet Dispute Resolution Procedures In the United Kingdom a company called Nominet UK provides a registration service in respect of domain names ending with the geographical suffix “.uk” preceded by functional suffixes such as a “co.”, ”org.”, ”gov.”, ”edu.” This organization provides a Dispute Resolution Procedure with regard to cybersquatting, under which once a complaint has been lodged with Nominet, it will notify the respondent and the respondent will have 15 days within which to lodge a response. If there is no response the claimant is then free to apply for a decision of an expert pursuant to Paragraph 6 of the Nominet

United

Kingdom

Dispute

Resolution

Service

Policy

(NUKDRSP). To succeed the complainant has to prove on the balance of probabilities, that- (1) it has rights in respect of a name or mark identical or similar to the domain name; (2) that the domain name, in the hands of the respondent, is an abusive registration.15

4.2 ICANN Uniform Dispute Resolution Policy WIPO has set up the Uniform Domain Name Dispute Resolution Policy in December 1999, which provides a speedy and cost effective dispute resolution procedure. Between December 2000 and December 2011, almost 40,094 separate domain names were considered by the WIPO Arbitration and Mediation Center.16

Jonathan Hancock, “Internet: new dispute resolution service for “.uk” domain names gave first ruling on November 15, 2001”, European Intellectual Property Review N37 (2002) 16 id 3 15

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4.3 WIPO Uniform Domain Name Dispute Resolution Policy As Approved by Internet Corporation for Assigned Names and Numbers (ICANN) on October 24, 1999; this Uniform Domain Name Dispute Resolution Policy (UDNDRP) is incorporated by reference into domain name holder‟s Registration Agreement to combat cybersquatting. It sets forth the terms and conditions in connection with a dispute between domain name holder and any party other than the registrar over the registration and use of an Internet domain name registered by the domain name holder.

4.4 EC Regulation The scheme organised in the opening of the new .eu domain is a prime example a successfully implemented practice against cybersquatting. The registration procedure for this, as governed by EC Regulation 773/2002 meant, in the initial period known as the „sunrise‟ period, registration was very limited, to firms with prior intellectual property rights thus blocking cybersquatters from registering such domain names as marksandspencers.eu.17

4.5 Pre-registration Filtering One suggestion by Gilwet is a filtering system being implemented for all registrations generally, with reference to the creation of a

In ensuring this, the registrars required concrete documentary proof of these prior rights (section 19 of the sunrise rules) before granting domain names in this period. 17

International and Comparative Law Journal (ICLJ)

notice system.18 This would involve the registrar's database being able to access the trade mark database in each country and where there is a match between a company trade mark and a prospective domain name, the trade mark holder would be notified so that they could then decide whether to contest the domain name. In implementing this, there could be a short period such as for a month after the registration where the application can be revoked on the basis of a contention by a trade mark holder. The usefulness in this system is it becomes more economically efficient at dealing with cybersquatters, in preventing the expensive solutions at later stages such as dispute resolution or the court process.

4.6 Registration of Domain Names A domain name may be protected by registering it as a trade mark, provided it satisfies the usual criteria for registration under the Trade Mark Regulation 40/94/EC and the Trade Mark Directive 89/104/EEC. An application for a national trade mark can be made to the Trade Mark Registry, which forms part of the UK Intellectual Property Office. It is also possible to apply for a Community Trade Mark via an application to the Office for Harmonisation in the Internal Market (Trade Marks and Designs).19

Gilwit, Dara „The Latest Cybersquatting Trend: Typosquatters, Their Changing Tactics, and How To Prevent Public Deception and Trademark Infringement‟ [2003] 11 Washington University Journal of Law and Policy 27. 19 Jane Foulser McFarlane, “In the witches‟ domain”, 157 New Law Journal, 12 October 2007 18

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4.7 Specialised National Statute Thus the answer regarding the means of fighting cybersquatting must surely lie in implementing specific legislation designed to counteract cybersquatting, as has been implemented in some jurisdictions, most notably the United States20 and closer to home in Belgium21. As on this point it is simply a more realistic alternative than stretching existing laws which are not suited to this new offence.

5. CONCLUSION If the underlying logic of trade mark protection legislation is analysed, it is clear that trade mark denotes origin, so when one trade mark infringes another it then confuses the customer in terms of the origin of where the product came from. In contrast a domain name does not denote origin, and according to many commentators including Deveci22 and Amzi,23 the domain name is more akin to a „yellow pages‟ telephone directory in terms of directing the user to the business address rather than to the products. Thus it will be wise combating cybersquatting with modern tools rather than with orthodox trade mark related statutes.

id 1 Cybersquatting Act 2003; Act of 26 June 2003 22 Deveci, Hasan „Has Trade mark law strayed from its path?‟ [2003] 11 Int J Law Info Tech 203, 215 23 Azmi, Ida „Domain names and cyberspace: The application of old norms to new problems‟ [2001]8 Int J Law Info Tech 193, 199-200. 20 21

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BIBLIOGRAPHY: Books: 

A.K.M.Alimul Islam, “Cybersquatting in Bangladesh”, (1st ed.), Isamoti Ptokashoni, 2011, pp. 60-67



Waelde, Charlotte „Trade marks and domain names. There's a lot in a name‟ in Edwards and Waelde (Eds) „Law and the Internet: A framework for electronic Commerce‟ (2000: Hart Publishing) at chpt 7.

Journal Articles: 

Jonathan Hancock, “Internet: new dispute resolution service for “.uk” domain names gave first ruling on November 15, 2001”, European Intellectual Property Review N37 (2002)



Jane Foulser McFarlane, “In the witches‟ domain”, 157 New Law Journal, 12 October 2007



Gilwit,

Dara

„The

Latest

Cybersquatting

Trend:

Typosquatters, Their Changing Tactics, and How To Prevent Public Deception and Trade mark Infringement‟ [2003] 11 Washington University Journal of Law and Policy 27. 

Deveci, Hasan „Has Trade mark law strayed from its path?‟ [2003] 11 Int J Law Info Tech 203, 215



Azmi, Ida „Domain names and cyberspace: The application of old norms to new problems‟ [2001]8 Int J Law Info Tech 193, 199-200.

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Reports: 

WIPO

Prepares

for

Launch

of

New

gTLDs

while

Cybersquatting Cases Continued to Rise. Geneva, March 6, 2012. PR/2012/704

Cases: 

British Telecommunications plc and another v One In A Million Ltd and others; and other actions [1998] 4 All ER 476



Phones 4u Ltd and another v Phones4u.co.uk Internet Ltd and others; [2006] EWCA 244



easyJet Airline Co Ltd and others v Dainty; (Ch D, 19 February 2001)

Statutes: 

The Trade Marks Act 1994, Section 1 (1), 10 (3), 13 (1)



Anticybersquatting Consumer Protection Act 1999



Cybersquatting Act 2003; Act of 26 June 2003