Responding To Groundless Trademark Threats

Threats

Not long ago, I received a very blunt email from a prospective buyer, as they didn’t like the price I quoted them in response to their enquiry.

The domain in question is a generic term that describes a type of business, similar to examples such as: ‘Smokehouse.com.au’, WhiskyBar.com.au’ or ‘SEOFirm.com.au’. I won’t be revealing the domain or the individual that I was corresponding with, as I don’t wish to encourage any further communications from them.

In a nutshell, the individual’s email response stated that they have a trademark which relates to the domain name.

Some of you may recall my article on due diligence and so won’t be surprised to hear that I’m a careful buyer. I steer well clear of domains that are obvious trademark infringements and I also undertake due diligence before I buy domains. So I was sceptical of their claim to say the least.

It didn’t take me very long at all to confirm that this was a groundless trademark threat. I did some search queries in the IP Australia database and then put together a brief time line using the results of my searches, details of the domain in question, and my records of correspondence with this individual. I’ve included my response below, as I thought it might be a useful for others as a ‘starting point’ template.

Hi [name],

I have provided some points below for your consideration.

  • We purchased [domain].com.au (the domain) on [day] [month] [year].
  • You approached us with an offer to buy the domain on [day] [month] [year]. I responded with a price on [day] [month] [year].
  • Having checked the IP Australia database, I can see that you submitted two trademark applications on [day] [month] [year], which have been approved for indexing and are currently in the opposition period. They include a composite trademark for your logo and a word-based trademark for ‘the[term]’.
  • It is important to note that these trademark applications were submitted over [number] months after we purchased the domain, so it is impossible that the domain was purchased with any intention of infringing those pending trademarks, as the applications did not exist. As a trademark holder myself, I am very familiar with intellectual property protection.
  • .au Domain Administration (auDA) policies allow for the purchase of .au domains for the purposes of monetisation. auDA policies also allow registrants to sell .au domains. If you would like further details on these policies, please refer to the auDA website here (Section 11) and here (Section 3). As a registered auDA member, I have a thorough understanding of these policies and would be happy to provide further explanation if you wish.

[details of previous correspondence]

I would be happy to discuss this matter with you and can be reached by phone on [phone number] during business hours. Often a quick chat can make all the difference, as it is easy to jump to conclusions without all the facts. Otherwise, I wish you all the best with your business endeavours.

Best regards,

[name]

[email signature]

I try to respond in situations like this without being driven by emotions, so even though their email was a thinly veiled threat, I was still courteous in my response. I’ve learnt from experience that it’s far more effective in the long run to remain professional and friendly.

I haven’t had any further correspondence from them since, and I think it’s unlikely that I’ll hear from them again.

It’s important that domainers are aware of their rights and are prepared to protect their investments. I won’t be threatened or bullied out of a domain name that I’m entitled to hold, and I hope that this article will help others faced by a similar situation.


The fine print

The contents of this article do not constitute legal advice. The article is provided for general information purposes only.

For legal matters you should consult a legal professional.

14 thoughts on “Responding To Groundless Trademark Threats

  • October 1, 2015 at 8:32 am
    Permalink

    What a great article, thanks for sharing! I generally don’t dignify vexatious emails with a response, all threats are idle until action is taken. But your template is *really* good.

  • October 1, 2015 at 12:00 pm
    Permalink

    Awesome article Luke.

    The best defence from people trying to figure out a way to wrangle you, is often offence 🙂

  • October 1, 2015 at 12:23 pm
    Permalink

    Great advice Luke… the timeline is a real winner. I’d add that Section 129 (Groundless threats of legal proceedings) of the Trade Marks Act 1995 is worth a read and may be worth a mention in your template.

      • Luke Summers
        October 1, 2015 at 1:01 pm
        Permalink

        Here’s some pertinent excerpts:

        Can you prove an infringement has occurred?

        This is a critically important issue that should be considered before any infringement action is taken, whether it involves legal proceedings or not.

        For example, if a threat of infringement is made that cannot be proved it may be deemed a ‘groundless threat’ of IP infringement.

        Under each of the Copyright Act 1968, Patents Act 1990, Trade Marks Act 1995, Designs Act 2003 and Circuit Layouts Act 1989, groundless threats are prohibited and can result in liability for damages to any person affected by the groundless threat.

  • October 2, 2015 at 1:12 am
    Permalink

    What’s more, you can’t rely on a trade mark (for infringement purposes) unless it has actually been registered. In other words, in the example given in the post, the threat that they “have a trademark” wasn’t actually true as the mark hadn’t yet been registered (the “indexing approved” status means a mark has been newly filed and not even examined yet).

      • October 3, 2015 at 12:05 pm
        Permalink

        @Victor Ng… you make a good point but this is where it might get a bit tricky for both the TM applicant and the alleged infringer. While S 129 does specify that a TM must be registered before any threat of legal action can be considered grounded, and therefore an application will not qualify in the first instance, once an application is accepted the TM is deemed to have been registered from the application date. Thus a threat of legal action that is initially groundless may later grow legs. In addition to this the inclusion of pecuniary penalties for TM infringement in the Raising the Bar Act (2012) for copyright infringement makes this pretty dangerous territory.

        • October 3, 2015 at 2:08 pm
          Permalink

          Hi Wayne, it’s not quite as complicated as that. You can’t claim infringement under s 120 until your mark is actually registered. It’s true that a mark, once registered, is protected from the application date but that doesn’t mean that someone can allege infringement on the basis that their mark will be registered in the future. Threatening infringement action in such a circumstance would be groundless because no cause of action exists at that point in time. So, an action for groundless threats could be made (and would be hard to defend). Better for the threatener to wait until its mark is registered.

          The easiest way to dispose of a groundless threats action is to sue for infringement – that actually ends the groundless threats action (makes sense really – it’s not groundless if the threat is actually carried out). But, if the threatener is still waiting for the mark to be registered, they can’t actually sue for infringement!

          This is getting a bit off topic. My original point was that people often claim to “have a trademark” or even to have “registered” a trade mark when all they have is a pending application. Believe it or not, lawyers sometimes do this too – I’ve actually had another Melbourne IP lawyer threaten infringement proceedings despite his client not having a registered mark!

          Cheers, Victor

          • Luke Summers
            October 3, 2015 at 2:24 pm
            Permalink

            Thanks for the great comments Victor and Wayne. Terrific contributions on this topic and I appreciate the additional info.

  • October 6, 2015 at 9:44 am
    Permalink

    Great article. Thanks to all for sharing their comments too.

Comments are closed.