Today we have a guest post by Melbourne based trade mark lawyer Victor Ng. I’ve met Victor in person a few times, and he’s a great guy. Plus he’s very smart on the subject of Intellectual Property.
Victor helps businesses protect their brands in Australia, Asia and Worldwide. In his spare time, he tells me that he likes to eat chilli, collect lucky cats, and play the ukulele. 🙂
The subject that he has chosen to write about today is such an important one for any domain investor or business operator.
Read more about Victor and his firm Markwell here – or connect on Linkedin.
Why Your Valuable Domain Name Needs A Trade Mark
By Victor Ng – Markwell
If you have a valuable domain name, you need a registered trade mark.
Most people are aware that trade marks are really important for brand protection. Â But trademarks are also an invaluable tool for domain name protection.
Let me explain why.
Domain name risks
A useful starting point is to look at what risks there are to your domain name. To put it another way, let’s look at how you could lose a domain name.  We can broadly categorise risk into two classes.
First, there is internal risk – something that is largely in your control.  So, for example, an internal risk to your domain name is forgetting to renew it. In other words, losing your domain name because you’ve screwed something up yourself.
Someone trying to screw things up for you – that’s what I call external risk. And the two main external risks that could result in you losing your domain name, are an auDA complaint (for .au domain names) or a UDRP / auDRP complaint.
Let’s look at these in turn.
The auDA complaint
An auDA complaint is a complaint made by another person to auDA alleging that your domain name registration doesn’t comply with an auDA policy. This relates to .au domains only. When an auDA complaint is made, auDA will give you an opportunity to respond to the complaint but, ultimately, if they agree with the complainant, your domain name will be deleted.  That’s a pretty significant external risk.
The .au domain space is a closed one and in order to register and hold a .au domain name you need to satisfy certain eligibility rules. Â So, the most common type of auDA complaint is a complaint based on eligibility.
Let’s have a look at the eligibility rules for .com.au domains. Schedule C of auDA’s Domain Name Eligibility and Allocation Policy Rules for the Open 2LDs has this to say.
1. To be eligible for a domain name in the com.au 2LD, registrants must be:
a) an Australian registered company; or
b) trading under a registered business name in any Australian State or Territory; or
c) an Australian partnership or sole trader; or
d) a foreign company licensed to trade in Australia; or
e) an owner of an Australian Registered Trade Mark; or
f) an applicant for an Australian Registered Trade Mark; or
g) an association incorporated in any Australian State or Territory; or
h) an Australian commercial statutory body.
2. Domain names in the com.au 2LD must be:
a) an exact match, abbreviation or acronym of the registrant’s name or trademark; or
b) otherwise closely and substantially connected to the registrant, in accordance with the categories of “close and substantial connection” set out in the Guidelines on the Interpretation of Policy Rules for the Open 2LDs.
You can see that you can satisfy the eligibility rules in a number of ways.  And one of those ways is to have a trade mark that corresponds, or largely corresponds, with your domain name. You don’t even have to wait for your trade mark to be registered. A trade mark application is sufficient to comply with the auDA eligibility rules.
So, owning a trade mark that largely corresponds to your domain name satisfies the auDA eligibility policy 100%. You cannot lose a domain name through an auDA complaint if you have a corresponding trade mark. It removes our first external risk completely.
Business names
But what about business names? They are cheaper and easier to register and they also satisfy the eligibility rules. While that’s true, there are three reasons why a trade mark is better than a business name.
First, a trade mark lasts longer. It takes a minimum of 7½ months to register a trade mark (remember during this period your trade mark application satisfies the eligibility rules). After that, once registered, a trade mark lasts for 10 years and can be renewed indefinitely. Business names, on the other hand, can be registered annually or every 3 years. More renewals equals more reminders equals more opportunities to forget to renew. Hello, internal risk.
The second reason why a trade mark is better than a business name is that it’s harder to cancel. ASIC can cancel a business name, either of its own accord or following a complaint, if it appears that the holder is not actually carrying on a business under that name. It is an administrative action that ASIC has the power to carry out.
On the other hand, a trade mark once registered can only be removed through a dispute process initiated by another person before the Trade Marks Office or the Federal Court of Australia – which takes time and money. Because a registered trade mark is a property right, you can’t simply write to the Trade Marks Office and ask them to cancel someone else’s trade mark – you have to challenge the validity of the trade mark through legal proceedings.
Finally, while both a trade mark and a business name registration address the auDA complaint risk – the first type of external risk to your domain name – only a trade mark addresses the second type of external risk – the UDRP or auDRP complaint. So a trade mark can kill two birds with one stone in a way that a business name can’t.
Let’s have a look at how a trade mark helps in a UDRP or auDRP proceeding.
UDRP / auDRP complaint
A UDRP or auDRP complaint is a proceeding brought by a complainant who alleges that you registered your domain name in bad faith. The result of a successful UDRP or auDRP complaint is that your domain name is either cancelled or, more commonly, is transferred to the complainant.
In order to succeed in an auDRP or UDRP proceeding, a complainant must establish three things.
- First, that they have rights or legitimate interests in a mark that is similar to or identical to the domain name.
- Second, that you don’t have any rights or legitimate interests.
- Third, that you registered and used the domain name in bad faith (in the case of an auDRP it’s that you registered or used the domain name in bad faith).
What’s really critical about these types of proceedings is that in order for a complaint to be successful, the complainant must establish all three elements. When it comes to domain name disputes, one or two out of three isn’t good enough. If a complainant fails to establish any one of the three elements, they lose and you keep your domain name.
Defending the first element is often difficult – it’s hard to disprove that the complainant doesn’t have rights particularly where they themselves have a registered mark or a trading history (it’s not altogether impossible though, as illustrated by this example).
Defending the third element, arguing that your intentions were good, can get messy and usually boils down to a fight over who the Panel thinks has the more persuasive evidence.
So, the element that we are most interested in here is the second element – that you don’t have rights or legitimate interests in the name.  A registered trade mark is a right or interest in a name. Owning a registered trade mark that corresponds to your domain name is the simplest way to successfully defend a UDRP or auDRP complaint. The WIPO Overview has this to say:
a respondent’s registration of a trademark which corresponds to a disputed domain name normally will … establish respondent rights or legitimate interests in that domain name.
Remember, the complainant must establish all three elements. If they can’t establish the second element in the face of your trade mark, you win.
Now before you crack open the champagne and run off to your favourite trade mark attorney, it’s important to understand that a registered trade mark is not a complete answer to auDRP and UDRP proceedings. In particular, if it’s obvious that your trade mark registration is purely for the purposes of circumventing the UDRP or auDRP process, it won’t help you.
Here are some examples of trade marks that appear as if they are trying to circumvent the UDRP or auDRP process.
- A trade mark registered a long time after registration of the relevant domain name. A long period of time between registering a domain name and registering a corresponding trade mark gives the impression that the mark was registered for defensive purposes only. (See, for example this case.)
- A trade mark registered in an implausible country. You can get a trade mark registered in Benelux or Lebanon in a couple of weeks but that doesn’t mean that it’s going to be any use in defending a .au domain in an auDRP. (See, for example this case.)
- A trade mark registered in relation to implausible goods and services. For example, the domain name japanfoods.com.au is unlikely to be helped by a corresponding trade mark that claims “arc welding equipment” in class 7.
So, while a trade mark registration is not automatically a magic bullet, a legitimately registered trade mark is the simplest way to defend your valuable domain name against auDRP or UDRP complaints.
Conclusion
If you own a valuable domain name, you need a strategy to protect that ownership. When you analyse the external risks through which you can lose a domain name – an auDA complaint or an auDRP / UDRP proceeding – what stands out is that a properly registered trade mark should be a central part of that domain protection strategy.
Very informative, thanks
Thanks Victor, your article has put some wind in my sails.
Sounds promising!
This is bad advice for domainers, the whole premise of ”If you have a valuable domain name, you need a registered trade mark.”
A trademark is about “brand protection” not “domain name” protection. If someone simply own a a valuable domain and nothing more (i.e. person is not not selling goods/services using that term) the trademark is going to get knocked back by IPaustralia. All the domain owner will get is a hefty bill from their lawyer. Most valuable domain names are going to be difficult to trademark even if the term is actively used in trade, because typically a valuable name is valuable because it is a common term, “generic” to the category.
Even if the trademark did somehow get through the domainer will be wide open to having that mark declared invalid for non use in a dispute situation.
Domainers, don’t waste your time and money trying to “protect” a valuable domain name with a trademark. Put it into defending a dispute in the unlikely chance that it happens down the road.
@Snoopy – I disagree with you on this:
I have trademarked two of my more valuable domains through Cooper Mills, and I’m happy to have spent the money. To me, it is like a bit of extra insurance in the event that I am ever challenged via an auDA or auDRP complaint.
The other benefit is that if and when it comes time to sell the domain /s, I can always sell the TM as well.
I know a number of fellow Aussie domainers who TM their valuable domains for the same reason.
Ned, assuming these are domain are not developed what sort of protection is it going to give you? What was put on the form in relation to “classes”?
If the trademark is not actually being used I don’t think it will offer you protection. In that instance all that has been done is a form has been filed and some money paid, there is no actual trademark, no company or product that it represents, just an entry in a database. If people are just registering trademarks to try and protect them legally, what is stopping someone having them removed for non use? If in a few years time there is a dispute and you are asked for evidence of usage at the time of registration of the trademark what are you going to do? How is that going to look in a dispute?
If the comparison is to insurance I’d say this is insurance of the type that doesn’t really protect you when a dispute actually arises. Still curious about any case of someone actually convincing a court that such a mark holds water.
“If someone simply own a valuable domain and nothing more (i.e. person is not not selling goods/services using that term) the trademark is going to get knocked back by IPaustralia.”
No it’s not. Unlike the US, where (in most cases) use is a prerequisite to registration, in Australia there’s no assessment of whether a mark is being used before it is registered.
The point about whether a trade mark can be used for domain name protection where the domain name is owned  but not used to sell goods / services is an interesting one. If you’re in the business of buying and selling domain names, then there’s an argument that those are the relevant “goods and services” for trade mark purposes. And there’s no reason why a one-off product can’t be trade marked – e.g. building names. I agree this is not a settled position though.  In any event, if the domain name is being used to display PPC advertising or the like, then it’s likely being used.
“Most valuable domain names are going to be difficult to trademark even if the term is actively used in the trade, because typically a valuable name is valuable because it is a common term, “generic” to the category.”
So called ‘brandable’ domain names are definitely much easier to protect. But it is possible to protect a generic domain name with a properly considered trade mark application / registration.
“Even if the trademark did somehow get through the domainer will be wide open to having that mark declared invalid for non use in a dispute situation.”
Only if it’s not being used. In any event, in Australia, applying to remove a mark for non-use can generally only be initiated 5 years after the filing date of the mark and the whole process can take 2 or more years.
“… don’t waste your time and money trying to “protect” a valuable domain name with a trademark. Put it into defending a dispute in the unlikely chance that it happens down the road.”
A trade mark would be really handy in defending that dispute …
“ If you’re in the business of buying and selling domain names, then there’s an argument that those are the relevant “goods and services” for trade mark purposes.”
Which court has ever held that? I wouldn’t describe this area as “not settled”. I’d say that it is a made up argument.
“But it is possible to protect a generic domain name with a properly considered trade mark application / registration.”
Show us an example where a domainer has won a case because they’ve somehow managed to register a trademark? If the name is generic they do not need a trademark to “protect it”, they need to put in a strong, genuine defence.
“Which court has ever held that? I wouldn’t describe this area as “not settled”. I’d say that it is a made up argument.”
Which court hasn’t held that? Your argument is as “made up” as mine. The only difference is that I’ve suggested a plausible basis for my argument whereas your argument is simply “show me a court decision”. Â Just because there isn’t one (I don’t believe) doesn’t mean it isn’t valid.
“Show us an example where a domainer has won a case because they’ve somehow managed to register a trademark? If the name is generic they do not need a trademark to “protect it”, they need to put in a strong genuine defence.”
Well, given trade marks are generally under-utilised by domainers, I’m not aware of such an example. I am aware of domainers who have avoided auDRP proceedings on the strength of a legitimately registered trade mark. You’re right that a generic domain name not being used in bad faith should be defensible without a trade mark. But this doesn’t mean utilising a trade mark won’t help and is “bad advice”.
Victor you are the one making the statement,
If you’re in the business of buying and selling domain names, then there’s an argument that those are the relevant “goods and services” for trade mark purposes.
I’m saying that is a nonsense argument as is much of the above piece. If people are going to spend money registering trademarks on the basis of your theories they are likely wasting their money.
The idea for domainers that “If you have a valuable domain name, you need a registered trade mark.” is a sales pitch, not sound advice.
With Snoopy on this.  TMs are to protect you in trade (goodwill), seems pointless if you’re not.  What class(es) would you apply for?  Dispute policies protect generic domains, would be counter intuitive arguing that while holding a TM too.
Can you clarify if in the article you are referring to the full domain name as a trademark, or just the name part of the domain before the extension? ie. trademarking “domainer” vs “domainer.com.au”
Full steam ahead….