Upcoming changes to .ca domain dispute policy

Canada’s domain name dispute policy has been the subject of a year-long review, which will see the introduction of changes that should make the process more efficient. Victoria Carrington explains.

Canada’s domain name dispute resolution policy for .ca domains (CDRP) took effect in 2002. The CDRP was modelled after ICANN’s Uniform Domain Name Dispute Resolution Policy (UDRP), which applies to domains registered in the gTLDs and those ccTLDs whose registries have adopted the policy.

The many similarities between the two policies are likely responsible for the comparable success rates of complainants under each (i.e. approximately 74 percent for the CDRP in 2010 and about 79 percent for the UDRP overall). However, there are certain key differences between the policies, some of which result from the need for the UDRP to function internationally in the absence of a common denominator between jurisdictions and legal systems applicable to the parties to the disputes.

In contrast, the CDRP was drafted and is interpreted in accordance with the Canadian Trade-marks Act and trademark law. Complainants only have standing under the policy if they satisfy the Canadian Presence Requirements of the Canadian Internet Registration Authority (CIRA). This means that only Canadian entities or owners of registered Canadian trademarks may initiate CDRP proceedings.

Two other differences of substance are that the lists of factors that may be relied upon by complainants to show bad faith, or by respondents to demonstrate legitimate interest in a domain, are exhaustive in the CDRP; essentially, the same factors appear in the UDRP, but as examples only. In addition, the CDRP requires that the complainant’s trademark rights predate the disputed domain name registration, unlike the UDRP.

Last year, CIRA initiated a review of the CDRP, which has, since its inception, resulted in 161 decisions by panellists from the two private dispute resolution providers that administer the policy.

Public consultations were held by CIRA between June and September 2010, with feedback requested on certain aspects of the CDRP, including the requirements for filing a CDRP complaint and the three-part test in the policy (i.e. bad faith registration, no rights or legitimate interest in the domain, and confusing similarity with a mark in which the complainant has rights).

In response to the nearly 700 comments received, CIRA will be implementing some significant changes to the CDRP, which will ultimately bring the CDRP more in line with the UDRP and other national registries’ dispute policies.

"the judge noted that keyword use represents the evolution of competition and marketing practices to adapt to new technologies, and is no more false, deceptive or misleading than intentionally placing print advertisements close to competitors’ advertisements in printed publications."

In particular, provisions relating to ‘rights’ and ‘use’ of a mark that were considered to be overly technical and complex will be removed; the test for ‘confusing similarity’ between the disputed domain and the complainant’s trademark will be clarified to set out that the ‘narrow resemblance’ test, which is applied by most CDRP panelists, should be used rather than the test for confusion dictated by traditional trademark principles; the bad faith and legitimate interest factors set out in the policy will now be non-exhaustive (and an additional bad faith factor of commercial gain will be explicitly included); and the decision implementation period will be shortened from 60 days to 30 days. CIRA has published the draft amended policy with a further short request for public input to ensure the accuracy and clarity of the new wording.

In addition, CIRA is also exploring methods for reducing the initial cost and time burden on complainants who are currently required, at the time of filing the complaint, to pay the entire CA$4,000 filing fee and file the entirety of their submissions (including evidence, supporting documents, etc.). Many respondents in the public comment period expressed concern that this causes considerable wasted expense and effort given the large number of cases involving registrants who settle after receiving the complaint, or simply fail to respond.

Various options are being suggested by CIRA that involve both payment of filing fees and the filing of submissions in stages, the reduction of the filing fees themselves, as well as the option of seeking a less expensive summary decision. Public comments on these proposals are also currently being sought.

Canadian trademark/Internet jurisprudence

Two recent decisions by Canadian courts in 2010 have confirmed that the use of a competitor’s trade name (or trademark) in Internet keyword advertising is acceptable, provided that there is no misrepresentation in the use of the competitor’s trade name.

In Chocolat Lamontagne Inc v Humeur Group-conseil Inc, the defendant purchased the business names of a competitor as Google Adwords, which were then used to direct users searching the competitor’s trade name (Chocolat Lamontagne) in a Google search to a sponsored Adword link that led to the defendant’s website. The sponsored link was identified in the search results as ‘Alternative to Chocolat Lamontagne’.

Even though the evidence showed that some sales for the defendant were generated directly from the sponsored link, the court concluded that no actual damages or losses were shown to be suffered by the plaintiff, and there was no passing off, confusion or likelihood of confusion, since consumers were clearly being advised that the sponsored link was leading to an alternative to the plaintiff’s site.

The court saw the defendant’s use of keywords as simply an aspect of “an economy of open competition” where “new ways of interacting with consumers” must be accepted and “information meant to provide an alternative to other business cannot be prohibited”.

A similar outcome was reached in the British Columbia case of Private Career Training Institutions Agency v Vancouver Career College (Burnaby) Inc, wherein the court considered whether the defendant’s use of keywords consisting of the business names of competing educational institutions was confusing or misleading.

The evidence showed at least two students who claimed to be misled when conducting Internet searches. The court discounted the students’ claims, concluding that the mistake that led them to the defendant’s website did not result from keyword use. The court also concluded that the keyword use did not mislead anyone since the defendant’s advertisements did not misrepresent or misidentify who they were.

Moreover, users of search engines such as Yahoo and Google always have the opportunity to review the search results—in this case, to determine or investigate which schools are listed in the search. Similarly to the Quebec court, the judge noted that keyword use represents the evolution of competition and marketing practices to adapt to new technologies, and is no more false, deceptive or misleading than intentionally placing print advertisements close to competitors’ advertisements in printed publications.

International developments

At this time last year, one of the most significant issues facing trademark owners in Canada and worldwide was the impending expansion of the generic top-level domain (gTLD) space—the largest to date—which was expected to occur in 2010. The result of this process, which was approved in June 2008 by ICANN’s board of directors, would be an increase in the total number of TLDs from the current 21 gTLDs and approximately 250 ccTLDs to potentially hundreds, thousands, or theoretically even an unlimited number of gTLDs.

Not surprisingly, for the past two and a half years, the international Internet community has been engaged in consultations and debate to identify and resolve the many crucial issues raised by the new gTLD programme before the first new TLDs are rolled out. Trademark and brand owners in particular are affected by this issue, given the potential exponential increase in opportunities for the violation or abuse of trademark rights.

All sectors of the global Internet community participated in the consultations leading up to the ICANN board’s approval of the gTLD programme and the subsequent debates involving the mechanics of implementation. The Intellectual Property Constituency (IPC) of ICANN has been participating extensively, particularly in the development of rights protection mechanisms (RPMs) for IP owners.

Many issues remain unresolved however, including, unfortunately, how best to adequately safeguard trademark rights. Consequently, the introduction of new gTLDs did not start last year and there is currently still no firm launch date.

The ICANN board and the Government Advisory Committee (GAC) of ICANN has just concluded a three-day meeting in Brussels, where they discussed the GAC’s problems with the gTLD Applicant Guidebook (a comprehensive guidance document setting out the requirements for prospective gTLD registry operators). Among the ‘unresolved’ issues identified by the GAC are the IP RPMs, which ICANN has previously suggested were essentially finalised.

This has been the source of considerable concern in the IP community, given the significant ‘dilution’ by ICANN staff of the abbreviated list of RPMs that made it into the Applicant Guidebook and that were initially proposed by the expert IP committee organised by ICANN itself.

At the conclusion of the ICANN/GAC meeting earlier this week, the ICANN board agreed to some changes to certain RPMs, including the ‘Trademark Clearinghouse’ and ‘Uniform Rapid Suspension’ mechanisms, as well as to further discussing IP protections with the GAC ‘offline’. These developments are being received with cautious optimism. Further developments are expected at the ICANN board meeting in San Francisco in mid-March, 2011.

Dr. Victoria E. Carrington is a partner at Shapiro Cohen. She can be contacted at: vcarrington@shapirocohen.com.