MANAGEMENT & LEGAL IMPLICATIONS OF eCOMMERCE Trade Marks & Domain Names Chapter 8, Forder & Quirk

MANAGEMENT & LEGAL IMPLICATIONS OF eCOMMERCE Trade Name Protection  The right to use a name to seel goods is protected by:  Trade Marks Act  Law of passing off  These have geographic limits

MANAGEMENT & LEGAL IMPLICATIONS OF eCOMMERCE Trademark  A sign used to distinguish goods of one trader from goods of another trader  Sign is any combination of “any letter, word, name, signature, numeral, device, heading, label, ticket, aspect of packaging, shape colour, sound or scent”.  Must be distinctive  Supported by national laws e.g. Trade Marks Act  Has a geographic limit

MANAGEMENT & LEGAL IMPLICATIONS OF eCOMMERCE Registration  Must register trademark with government  Registrar checks application for compliance  Others can object  Procedure set out in F & Q p 222  Registration is restricted to specified classes of goods (34) and services (8) as nominated by applicant  Application must describe specific goods\services in each class

MANAGEMENT & LEGAL IMPLICATIONS OF eCOMMERCE Registration  Applicant is granted monopoly rights during period of registration  Rights are limited to Australia  Registered for 10 years  Registration can be extended  Owner must continue to use trademark otherwise can lose right to trademark

MANAGEMENT & LEGAL IMPLICATIONS OF eCOMMERCE Global Trade Marks  Madrid Agreement 1891  Common Regulations of Madrid Protocol 1996  Establishes international system of trade mark registration  70 countries have signed including UK, European Union, China, Japan and Australia  Single application & renewals in one country  Must be available in all selected foreign countries

MANAGEMENT & LEGAL IMPLICATIONS OF eCOMMERCE Domain Names  Every server on the web has a Uniform Resource Locator (URL)  Consists of 4 octets e.g  Domains names are used as numbers are difficult to remember  Domain names are mapped to URL’s  Domain names have no geographic constraints  One name can cover all goods and services  Domain name can only be used by one person

MANAGEMENT & LEGAL IMPLICATIONS OF eCOMMERCE Domain Names (cont.)  Consist of  Country code top level domain name (ccTLD)  Generic top level domain name (gTLD)  Second level domain name  Can be prefixed by server name  E.g.   scaleplus.law.gov.au

MANAGEMENT & LEGAL IMPLICATIONS OF eCOMMERCE Generic Top Level Domains  com  edu  net  org  gov  mil  int  biz  info  name  museum  coop  aero  pro  Asn  Id

MANAGEMENT & LEGAL IMPLICATIONS OF eCOMMERCE Domain Names (cont.)  In USA, Administered by ICANN  Names registered on a “first come first served” basis  No proprietary rights in domain name  Domain name can be suspended, cancelled or transferred pursuant to ICANN Dispute Resolution Policy

MANAGEMENT & LEGAL IMPLICATIONS OF eCOMMERCE Domain Names (cont.)  Applicants must state that  Registration does not infringe third party rights  Courts of applicant’s domicile will adjudicate disputes  Disputes  Originally settled by courts  Now, applicants submit to ICANN’s Uniform Domain Names Dispute Resolution Policy

MANAGEMENT & LEGAL IMPLICATIONS OF eCOMMERCE Domain Names (Australia)  Some countries have adopted a restricted approach  In Australia  Administered by auDA since 2001  Originally, domain name had to be directly derived from the legal name of the commercial entity applying to register name  Now, some generic names (e.g. computers.com.au) allowed provided that there is a connection to applicant’s name

MANAGEMENT & LEGAL IMPLICATIONS OF eCOMMERCE Domain Names (Australia)  Licence to use domain name can be revoked  Disputes are heard by  auDA at first  WIPO under ICANN’s Uniform Domain Names Dispute Resolution Policy

MANAGEMENT & LEGAL IMPLICATIONS OF eCOMMERCE Trademarks & Domain Names Problems  No two domain names can be identical but two trademarks can be identical if used for different goods\services  More than one person can use the same trade mark in different territories but domain names have a global reach  No need for a domain name to have a matching trademark  Competing claims  Cybersquatting

MANAGEMENT & LEGAL IMPLICATIONS OF eCOMMERCE Infringement of Trademarks Infringement occurs when  A person uses a trademark that is  substantially identical or  deceptively similar to the registered trademark  In connection with the sale of the specified goods or services

MANAGEMENT & LEGAL IMPLICATIONS OF eCOMMERCE Infringement of Trademarks (cont.)  Assessment of the similarity between the 2 marks and the possible level of confusion  Use of Domain name can infringe trademark  Attempting to sell it to rightful owner is a use of the trademark in connection with trade  Highjacking by sex sites  Use of trademark by licensee to sell goods in another territory is an infringement

MANAGEMENT & LEGAL IMPLICATIONS OF eCOMMERCE Infringement of Trademarks (cont.)  Cybersquatting  Marks & Spencer v One in a Million (F&Q p230)  Panavision v Toeppen (F&Q p231)  Courts focused on commercial use evidenced by the intention to resell  Misleading names  Hasbro v Internet Entertainment Group (F&Q p231)  Involves “dilution” of trademark

MANAGEMENT & LEGAL IMPLICATIONS OF eCOMMERCE Infringement of Trademarks (cont.)  Preventing Competitor using its own name  Playboy v Calvin Designer Label (F&Q p231)  Inconsistent Appraoch  Amazon v Ibazar (F&Q p231)

MANAGEMENT & LEGAL IMPLICATIONS OF eCOMMERCE Infringement of Trademarks (cont.)  Person must be licensed to sell trademarked goods in the territory  This prohibits importation where seller does not have license for purchaser’s country  Re: Trade Marks Act (Stuttgart Court of Appeal 13/10/97) (F&Q p232)

MANAGEMENT & LEGAL IMPLICATIONS OF eCOMMERCE Infringement of Trademarks (cont.)  Meta tags may not infringe a trademark  Brookfield Communications v West Coast Entertainment (F&Q p232)  Can use descriptive terms that infringe a trademark as there is no likelihood of confusion  There is confusion when user goes to wrong site but this is acceptable as it is no different from normal search engine problems  Law may change

MANAGEMENT & LEGAL IMPLICATIONS OF eCOMMERCE Infringement of Trademarks (cont.)  Tacking  A trademark owner can claim priority based on the date it first used a similar mark  This may be a date before registration of the mark  Consumers must consider them to both be the same mark  See Brookfield Communications v West Coast Entertainment (F&Q p232)

MANAGEMENT & LEGAL IMPLICATIONS OF eCOMMERCE Dispute Resolution  Condition of registration that applicant:  Submits to ICANN dispute resolution process  Submits to jurisdiction of courts in applicant’s territory  Submits to jurisdiction of courts in registrar’s territory  Over 4,000 disputes adjudicated

MANAGEMENT & LEGAL IMPLICATIONS OF eCOMMERCE Dispute Resolution (cont.)  Arbitration in 3 situations:  The domain name is identical or confusingly similar to a trade mark to which the complainant has rights  The applicant has no legitimate interest in the domain name  The domain name is being used in bad faith  Cannot deal with disputes outside those listed e.g. competing valid claims to domain name

MANAGEMENT & LEGAL IMPLICATIONS OF eCOMMERCE Dispute Resolution (cont.)  Procedure (F&Q p235)  Online complaint  To one of 4 nominated dispute resolution providers  Provider forwards complaint to owner within 3 days  Owner responds within 20 days  Provider nominates arbitrators (1 or 3)  Arbitrators have 14 days to make a decision

MANAGEMENT & LEGAL IMPLICATIONS OF eCOMMERCE Dispute Resolution (cont.)  May decline registration pending court decision  Adaptive Molecular Technologies v Woodward (F&Q p239)  Domain can prevail over Trade Mark  Gateway v Pixelera.com (F&Q p239)  Cybersquatting  Telstra v Joen (F&Q p240)  Bad Faith  Kraft v The Pez Kiosk (F&Q p240)

MANAGEMENT & LEGAL IMPLICATIONS OF eCOMMERCE Dispute Resolution (cont.)  Alcoholics Anonymous v Friends of Bill W (F&Q p240)  No bad faith  Respondent had a legitimate business activity not in competition with applicant  Geographical Names  Brisbane City Council v Warren Bolton Consulting (F&Q p )

MANAGEMENT & LEGAL IMPLICATIONS OF eCOMMERCE Alternative Protection  Anticybersquatting Consumer Protection Act, 1999 (USA)  Plaintiff must show  It is owner of trade mark  Defendant registered, trafficked or used in domain name identical or confusingly similar to trade mark  Domain name has bad faith intent to profit from plaintiff’s trade mark

MANAGEMENT & LEGAL IMPLICATIONS OF eCOMMERCE Alternative Protection (cont.)  Alternatively, plaintiff must show  It is a personal name  Defendant registered the personal name as a domain name without consent  Domain name has bad faith intent to profit from plaintiff’s personal name  Allows for transfer, damages and costs  Slower than UDRP

MANAGEMENT & LEGAL IMPLICATIONS OF eCOMMERCE Alternative Protection (cont.)  Courts are not bound by UDRP decisions  Can be used to, in effect, review UDRP decisions  Barcelona.com (F&Q p243)  Corinthians (F&Q p243)  Does this make the US Courts de facto Internet Courts of Appeal?

MANAGEMENT & LEGAL IMPLICATIONS OF eCOMMERCE Passing Off Passing off will occur where there has been  A misrepresentation  Made in the course of trade  To prospective customers  Which is calculated to injure the business or goodwill of another trader  Which causes, or is likely to cause, actual or probable damage to the business or goodwill of another trader

MANAGEMENT & LEGAL IMPLICATIONS OF eCOMMERCE Passing Off Cont.)  Passing off only protects the reputation that a trader can prove  May be restricted by  Geography (e.g. Prince PLC)  type of goods (e.g. Spice Girls) or  section of the community (e.g. AIM)  Mere registration of a domain name without trade is not enough  Representation can occur when domain name is offered for sale

MANAGEMENT & LEGAL IMPLICATIONS OF eCOMMERCE Passing Off (cont.)  Factors negating misrepresentation  Name has obtained a secondary meaning and is descriptive of goods and services provided  Use of a person’s own name  Re Krupp (F&Q p249)  Actions outside the trader’s country  Internet World Case (F&Q p250)

MANAGEMENT & LEGAL IMPLICATIONS OF eCOMMERCE Passing Off (cont.)  Factors negating misrepresentation (cont.)  Use of distinguishing material  Yahoo v Akash Arora (F&Q p250)  The products do not share a common field of activity

MANAGEMENT & LEGAL IMPLICATIONS OF eCOMMERCE Passing Off (cont.)  Courts look for a “Common field of activity” to assess if there is a representation to a traders actual or prospective customers  Stringfellow v McCain (F&Q p251)

MANAGEMENT & LEGAL IMPLICATIONS OF eCOMMERCE Section 52 Trade Practices Act  “A corporation shall not, in trade or commerce, engage in conduct that is misleading or deceptive or is likely to mislead or deceive.”  Requires  Identification of a section of the public that is likely to be misled  Assessment of the abilities of the people in this section  Objective assessment of whether these people will be misled  A causal connection between the representation and the defendant’s behavior