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
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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. 125.125.125.17
 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.
 www.microsoft.com
 scaleplus.law.gov.au
MANAGEMENT & LEGAL IMPLICATIONS OF eCOMMERCE
Generic Top Level Domains
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com
edu
net
org
gov
mil
int
biz
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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 p247-248)
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.)
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Passing off only protects the reputation that a
trader can prove
May be restricted by
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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.)
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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.)
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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.)
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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