Trademarks and domain names
Cybersquatting is the name given to registering, trafficking in or using a domain name in bad faith, or intending to profit from the goodwill of a trademark belonging to a third party. Aharon Factor looks at recent cases in Israel and abroad.
A cybersquatter typically offers to sell the domain name to the person or company with rights to the trademark contained within the domain name, at an inflated price.
Cybersquatters sometimes register variants of popular trademarked names in a practice known as typosquatting, or hijack the names of people or businesses (‘name jacking’) where the name is purchased as a second-level domain name. Setting up a website in this manner allows the purchaser to capitalise on Internet searches for that name.
Domain name disputes involving alleged badfaith registration may be resolved using the Uniform Domain Name Resolution Policy (UDRP) process developed by the Internet Corporation for Assigned Names and Numbers (ICANN). A UDRP complaint may be initiated at a UDRP proceeding with an approved dispute resolution service provider. Critics claim that the UDRP process favours large corporations and that decisions often go beyond the rules and intent of the dispute resolution policy. They do, however, provide a convenient solution where the parties are based in different jurisdictions.
There have been several cases of this nature that have been dealt with by the Israeli courts.Section 1 of the Israel Trademarks Ordinance establishes that use of a registered trademark or of a mark similar to a registered mark is an infringing use of the mark. Accordingly, commercial use of a trademark for similar goods or goods falling under the same category of goods by means of a domain name is deemed to infringe the registered trademark.
In the Israel Bar v Ben-David, the Tel Aviv District Court ruled that an Israeli licensed attorney’s use of the domain name www.hapraklit.com (Hebrew for ‘the lawyer.com’) was an infringement of the Israel Law Bar’s rights to the then non-registered trademark ‘HaPraklit’, used by the bar as the title of its journal and various other publications. The court ruled that the addition of the .com suffix was insufficient to ameliorate the infringement (the bar’s site was www.hapraklit.org.il) and there was reason to suspect that web users looking for the Israel Bar would unfairly be drawn to Ben- David’s website and the lawyer would thereby expand his services and client base, free-riding on the bar’s reputation. The court ordered the lawyer to surrender the domain name to the bar. Note, this case has nothing to do with Jeremy Ben-David, managing partner of our firm.
When addressing the issue of cybersquatting,the Israeli courts invariably look to civil torts in addition to specific trademark legislation. Unlike conventional trademarks, it is generally not possible for the courts to grant parallel use of the same domain name to two different entities. The courts will therefore examine the existence of unfair trade practices such as unduly burdening the access of consumers to the business activities of rivals.
In Magnetics Ltd., v Diskcopy (Israel) Ltd, the plaintiff sued for the transfer from the defendant of the domain names www.magnetics.co.il and www.magnetic.co.il. At the time of filing the action, the plaintiff was not the owner of a registered trademark for the mark ‘magnetic’, so the plaintiff based its action on the grounds of unfair interference of trade, passing off, unjust enrichment and/or use of a legal right in bad faith.
The Tel Aviv District Court found unfair interference of trade including unfair burdening of access to the plaintiff ’s business. The court held that by taking the domain name for itself, the defendant prevented the plaintiff from setting up a website bearing its name as known to the general public. If the case is decided in favour of the plaintiff, the plaintiff will be forcedto choose a different name that would unduly burden customers’ and agents’ Internet access to the plaintiff ’s business.
In Nana Disk Ltd, v Netvision Ltd, the Haifa District Court held that there were insufficient grounds to justify the transfer of the domain www.nana.co.il to the plaintiff. The court held that the evidence presented by the plaintiff was insufficient to show a likelihood of confusion or misleading the public, due to the large differences between the business activities of the parties, the plaintiff being a record-producing company and the defendant being an Internet portal provided by an Internet service provider. Furthermore, the court found that the word nana—which is Hebrew for the plant spearmint—is, in addition to being used by the recording studio, concurrently used in Israel by a variety of commercial activities, including a chain of gas station convenience stores, a health magazine and an Internet portal including an email service.
The case of Zer 4U (2000) Ltd, v A.Pirchei Sderot Chen Ltd concerned a variant use of domain names. The word zer is Hebrew for a flower bouquet. The plaintiff is a well-known florist and owner of a chain of flower stores, also offering flowers for sale over the Internet via its site www.zer4u.co.il (a bouquet for you). The defendant set up a competing domain www. zer4me.co.il (a bouquet for me). The Tel Aviv District Court found for the plaintiff and held that the exchange of the letter ‘u’ for ‘me’ does not allow for a distinction between the domains, because the same idea lies behind both domains and the consumer is likely to believe that they are connected. Accordingly, the defendant’s domain infringed the plaintiff ’s trademark.
In Kiryat Motzkin Municipality v Friedman, the defendant, a candidate for mayor of Kiryat Motzkin in Northern Israel, set up a website with the domain name www.motzkin.co.il, as well as other domain names containing the name ‘Motzkin’. The defendant used the municipality’s emblem on the site and published articles against the incumbent mayor. The municipality argued that use of the domain name together with the emblem would be likely to mislead Internet users to believe they had reached the municipality’s official website. The municipality argued that its service mark had been infringed, its mark diluted, its creative rights infringed and that it had been slandered by the defendant. The Tel Aviv District Court ruled that the geographical name Motzkin is not identified exclusively with the Kiryat Motzkin Municipality, which itself is known as Iriyat Kiryat Motzkin (Hebrew for the Kiryat Motzkin Municipality). The court ruled that the name Motzkin belongs to the generalpublic and not to the municipality in particular, and that there was no justification to grant the municipality monopolistic rights to the name Motzkin. Rather, the name should be available for use by all businesses and institutions within the vicinity of the city. Furthermore, the court held that use of the city’s emblem without the name of the municipality was not an infringement of either. With regard to the charge of slander, the court held that the Internet was an effective tool for freedom of expression, including the expression of political views. Accordingly, there was no justification for ordering the removal of the defendant’s publications from his Internet domain until the charge of slander had been proved at the evidence stage of the proceeding. The difference in approach of the courts between this case and the HaPraklit case is noted.
Such cases are not confined to Israel. Uzi Nissan, an Israeli immigrant to the US, named his North Carolina computer store Nissan Computer Corp. In 1994, Nissan registered ‘nissan.com’ as a domain name and website for advertising various products, which included, for a period in 1999, automobile-related products and services.
Nissan Motor Co, Ltd, a Japanese automobile manufacturer that registered the ‘Nissan’ mark in 1959, began in 1983 to use the name Nissan to identify and market its automobiles in the US. In 1999, Nissan Motors filed an action complaining that ‘nissan.com’ diluted the Nissan mark under the Federal Trademark Dilution Act.
In a series of summary judgment rulings, the US District Court of the Central District of California held that Nissan Computer’s automobile-related advertising constituted trademark infringement on the basis of initial interest confusion but that non-automobile-related advertising did not.
The District Court further determined that Nissan Motor’s dilution suit was not barred by laches, that Nissan Computer’s first commercial use of Nissan was in 1994, when it registered the website nissan.com because that was the only use identical to the Nissan mark, that by that time Nissan Motor’s Nissan mark had become famous and that Nissan Computer’s use of nissan.com diluted the quality of Nissan Motor’s mark. The District Court enjoined Nissan Computer from posting any commercial content at nissan. com and from placing links to other websites that contain disparaging remarks or negative commentary about Nissan Motors. Both sides appealed against the decision.
The United States Court of Appeals for the Ninth Circuit (California), in Nissan Motor Co v Nissan Computer Corp, held that, as a matter of law, initial interest confusion existed in NissanComputer’s automobile-related use of nissan. com, since use of the mark for automobiles captured the attention of consumers interested in Nissan vehicles. Accordingly, nissan.com traded on Nissan Motor’s goodwill in the Nissan mark and infringed it. Notwithstanding that, other uses of the site unrelated to automobiles did not infringe the mark since there was no possibility of confusion and, accordingly, Uzi Nissan could not be considered a cybersquatter.
The Court of Appeals affirmed the infringement claim but reversed the dilution claim and returned the partial summary judgment on dilution to the District Court to consider the fame of the Nissan mark as of 1991 and whether Nissan Computer “actually diluted” the NISSAN mark. No costs were awarded.
Finally, the Court of Appeals held that to enjoin Nissan Computer from providing visitors to nissan.com with a link to sites with disparaging or negative commentary about Nissan Motor, is a content-based restriction on non-commercial speech that is inconsistent with the First Amendment.
As Internet commercial activity continues to grow together with advances in technology, trademark law and legal practice relating to Internet domain names will continue to evolve in their wake.
Aharon Factor is an attorney and manages the trademark department at JMB, Fa©tor & Co. He can be contacted at: aharon@israel-patents.co.il
