Disputes on Domain Names

What is a domain name?

A domain name is the part of a URL (the address through which a website is accessed e.g. myerson.co.uk) which is unique to a particular website.  Each domain name must be unique so that no two are identical. 

Most businesses nowadays have a website presence and it is important for businesses to have the right to use a domain name (or names) that reflects its business and is able to attract customers.  

According to the website Domain Name Stat, as at 7 June 2019, the total number of registered domain names was 346,683,796 of which 43.5% (150,858,297) were .com domain names.  Registrations continue to increase so it is clear that the importance of domain names will grow. 

Valuing a domain name

Domain names are valuable commodities, with the most sought-after names often changing hands for large sums of money.  The Domain Name Journal began compiling data in October 2003 as to how much the most valuable domain names were exchanging hands for.  Currently, the top 5 most valuable domain names which have changed hands are:

Domain names can be valued in a number of different ways:

1. The cost of obtaining the domain name from the registrar.
2. The amount of income or other economic benefits that the domain name holder receives from the use of the domain name.
3. The amount of income or other economic benefits that a third party could derive from the domain name.

The valuation used will depend on what the domain name is and the laws of supply and demand. 

Domain names which do not have any unique qualities will be generally be valued by the first method.  A domain name that is related to a trademark will be valuable to the holder of the trademark and so is likely to be valued using the third method. 

A domain name with a generic quality (e.g. business.com) will be worth a lot of money to someone who can exploit that name commercially and again is likely to be valued by the third method. 

Resolving domain name disputes

The major area of conflict that has developed is between intellectual property rights holders (particularly those with registered trademarks) and those who register domain names.  Conflict usually arises where either:

• Someone deliberately registers a domain name which it knows another party will need or would like and the registrant then either demands a huge sum to transfer the domain name or uses it to malign the other party (known as cybersquatting); or
• Different parties have competing legitimate interests in the same domain name; or
• Large companies have used their legal and financial resources to prevent legitimate domain name holders from registering valuable domain names.

In 1999, the Internet Corporation for Assigned Names and Numbers (ICAAN) introduced a system for settling disputes over domain names, known as the Uniform Domain Name Dispute Resolution Policy (UDRP).  The UDRP sets out terms and conditions in respect of a dispute between parties over the registration and use of a domain name.  Essentially, the UDRP requires that domain name owners formally arbitrate domain name disputes which raises a claim for cybersquatting. 

ICAAN has authorised a number of arbitration groups to act as neutral arbitrators as follows:

• The World Intellectual Property Organisation (WIPO);
• The National Arbitration Forum (NAF);
• The Asian Domain Name Dispute Resolution Centre (ADNDRC);
• The Czech Arbitration Court Arbitration Centre for Internet Disputes (CACACID);
• The Arab Centre for Domain Name Dispute Resolution (ACDR); and
• The Canadian International Internet Dispute Resolution Centre (CIIDRC).

In the UK, Nominet has its own Dispute Resolution Service (DRS) which parties can use to resolve .UK domain name disputes quickly and efficiently.

In order to bring a complaint, the complainant needs to establish the following three elements:

• The manner in which the domain name(s) is/are identical or confusingly similar to a trademark or service mark in which the complainant has rights.
• Why the respondent (i.e. the domain name holder) should be considered as having no rights or legitimate interests in respect of the domain name(s) that is/are the subject of the complaint.
• Why the domain name(s) should be considered as having been registered and being used in bad faith.

The relationship between trademarks and domain names

A domain name is often used to identify the source of information on a website.  In effect, therefore, a domain name is used either as a trading name or a trademark.  The domain name owner can, therefore, develop common law rights in the domain name, and the domain name may become capable of being registered as a trademark. 

Unfortunately, the nature of rights in domain names, and in particular whether domain names constitute property rights, are yet to be adequately explored by the courts, and so there are question marks over how the law on domain names relates to trademark law.  We will just have to wait and see if and how case law develops in this area. 

Famous domain name disputes

Over the years, there have been a number of disputes relating to domain names.  Some examples are:

• Argos Limited v Argos Systems Inc. The Defendant, Argos Systems, was a USA company which sold software to those designing and building their own homes.  In 1992, it registered the domain name argos.com.  In 1996, the Claimant, Argos UK, the famous retailer, purchased the domain name www.argos.co.uk.  Argos UK argued that the Defendant’s use of the sign ARGOS in its domain name and on its website was unlawful, in particular due to the fact that advertisements for Argos UK appeared on Argos Systems’ website by virtue of Google’s AdSense technology.  However, Argos UK’s claim failed on various grounds.  In particular, the Court considered that Argos UK had consented to the acts they complained of by choosing to participate in the Google AdWords scheme. 

• A complaint by HMRC regarding the domain name hmrc-tax-refund-gov.uk. When HMRC made the complaint, the domain name did not link to an active website, although other similar domain names did link to websites which included fake login details to try and engage in phishing.  As HMRC is a commonly phished term, a decision was made that the domain name hmrc-tax-refund-gov.uk should be transferred to HMRC to try and prevent any harm to members of the public.

• Three complaints made by the Moulin Rouge; the world-famous Paris based cabaret (the Complainant). One case was resolved when the first Respondent agreed to transfer the domain name to the Complainant.  The second complaint related to the domain name moulinrougewinlaton.co.uk which was used by a pizza and grill takeaway based in Gateshead.  A decision was made that this domain name should be also transferred to the Complainant.  The third complaint related to the domain name moulinrougethemusical.co.uk and was also transferred to the Complainant on the grounds that the Respondent did not have any legitimate use in relation to this domain name which would not cause confusion to members of the public that the Respondent was in some way linked to the Complainant. 

Need help or advice on domain name disputes?

Our specialist Intellectual Property Dispute Team is able to provide swift advice in regards to domain name disputes, particularly when the domain name dispute relates to registered trademarks. 

The team also routinely advises on a broad range of other intellectual property disputes relating to copyright, patents, confidential information and data protection.  The team is also highly skilled at advising on design rights and reputation management issues and are regularly instructed by clients from the arts, media, textile and clothing sectors in the UK and internationally. 

If you need advice on a domain name dispute or other intellectual property infringements, please do not hesitate to contact a member of our team today on 0161 941 4000 or via email.