Passing Off and Domain Names - Use of Similar or Identical Domain Name by Competitor

Since writing Domain Names for Tolley's in 2002,we have dealt with a wide variety of domain name disputes. Many of these concern a situation where one company has a brand name but does not own a corresponding registered trademark. A registered trademark in a domain name dispute is almost like an Ace in a card game. However, the absence of a registered trademark is not necessarily fatal. The purpose of this article is to categorise the most common scenarios and to give the reader some guidance on how he/she might stand.

You Can't Register Every Domain Name Variant
It is not practicable to register every single variant of your business name. Most businesses will settle for the .com and the national Top Level Domain such as .co.uk.

This leaves plenty of leeway for unscrupulous competitors to register identical or similar names. For example, if the URL (i.e. website address) of a well-known UK flower supplier were daffolily.com, what is to stop a competitor registering daffo-lily.com or daffolily.biz?

The answer is that whilst the competitor can do this, the law generally takes this attempt to trade off the back of a competitor's reputation as evidence of bad faith and will look to remedy the situation by procuring the transfer of the domain name to the legitimate namesake. A remedy is generally available either through the courts by initiating an action for "passing off" or via the dispute resolution mechanisms provided by the different Registries such as Nominet in the UK. Each of these routes has its pros and cons and which route you decide to follow will depend on the circumstances.

There are different ways in which a company may seek to use a rival's brand name. Not each of these is identical in the eyes of the law and we will now briefly consider some of the most common manifestations and the likely outcome. The reader must note that the hypotheses below and the likely outcome posited for each scenario cannot be relied upon for real cases as the precise facts and circumstances will determine the outcome.

Unscrupulous Competitors - Variations on a Theme

A. Diversion to a different Website
This occurs where a competitor registers a very similar domain name to yours and then diverts the traffic to its own website. Extending our example above, the owner of flowersgalore.com, a rival of daffolily.com might register daffo-lily.co.uk and then have all visitors to that URL automatically diverted to the flowersgalore.com website.

Probable Verdict - Flowersgalore will end up losing proceedings brought by daffolily whether through the courts or Nominet. Bad faith and passing off are typically relatively easy to find in this sort of case.

B. Use of a similarly named Website
This occurs where a competitor registers a very similar domain name to yours and then maintains that site which is usually a mirror image of its own website. Again, extending our example above, the owner of flowersgalore.com, a rival of daffolily.com might register daffo-lily.co.uk and maintain a site at daffo-lily.co.uk which has the same content as its site at flowersgalore.com.

Probable Verdict - Flowersgalore will end up losing proceedings brought by daffolily whether through the courts or Nominet. Bad faith and passing off are typically relatively easy to find in this sort of case.

C. Registration but No Use of a similarly named Website
This occurs where a competitor registers a very similar domain name to yours and then sits on it i.e. there is no content at the relevant URL. Extending our example above, the owner of flowersgalore.com, a rival of daffolily.com might register daffolily.co.uk but do nothing with the registration. This could of course have a negative impact on daffolily's business as people who assume that daffolily, a UK business will have registered daffolily.co.uk and find nothing when entering that URL into an internet browser may think that daffolily is no longer in business.

Probable Verdict - daffolily has a potentially difficult case on its hands as it cannot establish confusion in the eyes of the public which is a major factor in establishing passing off.

D. Using a Competitor's Product Name or URL as a Search Engine Adword
This occurs where a competitor pays a search engine to bring up its website when someone making a search enters a rival's company name or a well-known product or brand name.

Again, extending our example above, the owner of flowersgalore.com, a rival of daffolily.com might pay the search engine company to bring its URL up on the search engine results when the searcher enters daffolily in the search engine.

Probable Verdict - This scenario is more complicated. Flowersgalore may well argue that it is well known that Search Engine ad words results bring up other entities providing similar or identical services and that as these ad word results are usually set out separately under a heading such as "sponsored links", there can be no real confusion in the mind of the searcher. In this case, daffolily.com may consider whether its best course of action would be against the rival or the search engine company that has enabled this confusion to occur.

Neither action will necessarily be straightforward or successful.

Recommended Course of Action
The way to deal with any particular case will require individual consideration of the facts. However, as the costs of dispute resolution proceedings and court proceedings are considerable, we would generally try to avoid these by writing a "cease and desist" letter to the rival who has registered the name (or done something similar) and require a combination of measures which might well include transfer of the name, undertakings regarding future conduct and reimbursement of costs.

For further information, contact Simon on 020 7544 5555 or by email to simonh@sghlaw.com.

Simon Halberstam 020 7544 5595 simonh@sghlaw.com