Trademark agent fails to protect own domain

A Dutch trademark agent has failed to protect one of its own trademarks and lost a cybersquatting dispute to one of its founding shareholders.

Merk-Echt, which protects brands from trademark infringement, failed to transfer merkecht.com in a Uniform Domain Name Dispute Resolution Policy case (UDRP). The respondent registered the domain in 1999 while he worked for Merk-Echt.

A panellist at the World Intellectual Property Organization said the site was confusingly similar to Merk-Echt’s trademark, merk-echt, but that it had not been registered in bad faith by the respondent.

To transfer a domain in a UDRP case, complainants must show that the site was both registered and used in bad faith. For a start, panellist Alfred Meijboom noted, the domain still points to Merk-Echt’s home website, merkenregisters.nl, indicating that it has not been used in bad faith.

Despite this de facto ownership of the site since 1999, Merk-Echt said it feared the respondent will soon take over the site’s content and obstruct its business.

Turning to bad faith registration, Meijboom rejected Merk-Echt’s complaint, saying it had authorised the respondent to register the domain when he still worked for the company.

“The complainant, or its other shareholders, must have known that the disputed domain name was registered by the respondent as they alleged to have paid the annual renewal fees for the disputed domain name and the complainant has actually been using the disputed domain name to link Internet users to its website.”

The case, decided in January but published in February, revealed that the parties had tried to negotiate a transfer of the site in 2009 but the talks broke down.

Meijboom said he believed the dispute was part of a wider disagreement based on contracts and alleged non-compliance, saying the UDRP is limited to resolving only trademark disputes.

Steve Levy, counsel at domain name consultants Fairwinds Partners, said the case had set an important precedent for trademark owners:

“This case should be a lesson to any brand owners regarding trademarks and domain name protection, especially in cases of company division or changes in ownership. A domain name is a company asset, just like its buildings and inventory. Cultivating trust in, and maintaining the stability of, company domain names is an important part of a business’s online presence and overall promise to deliver consistent quality content, services, or products.”

He added: “When a significant change happens within a business, it's critical for domain names and trademarks to come as a package deal to avoid disputes (and risks of damaging trust in established domain names), like this one, down the road.”

The case is available here.