Tuesday, June 17, 2008

For companies, the Internet can be both a blessing and a curse.

While it can be a relatively inexpensive medium to promote a brand, always consider the possibility of a third party using the Internet to hijack that brand. It is a threat that could emanate not only from competitors but also from consumers.

Over the years, a number of South African companies have experienced the problem of their brand being hijacked in cyberspace by so-called “cybersquatters”.

Cybersquatters are unscrupulous individuals who register Internet domain names (or Internet addresses) incorporating the names of well-known brands and then try to sell the domain name back to the brand owner for a handsome profit.

In an attempt to combat cybersquatting, several alternative dispute resolution procedures have been created.

In the case of .com domain names, this alternative dispute resolution procedure is called the Uniform Domain Name Dispute Resolution Procedure (UDRP). In August 2007 a similar procedure – the .ZA Domain Name Dispute Resolution Regulations (ZADRR) – was introduced in South Africa to deal with cybersquatting for domain names.

In some cases, though, individuals register domain names incorporating a brand that they love (or hate – who can forget the case of with the intention of setting up a “fan site” of sorts.

In terms of the rules of the ZADRR, an Internet user who registers a domain name and uses that domain name to praise or criticise a company or person may be entitled to keep that name. The key word is “may”. An Internet user will need to show that the domain name that he/she has registered has been done in good faith and has not misappropriated the brand in question.

A case in point is the recent dispute between Automobiles Citroen and the owner of the domain name. This is the first ZADRR case dealing with the issue of fan sites in South Africa.

Automobiles Citroen has been the owner of the Citroen trade mark in South Africa since 1953. It kept this trade mark registration even during the 1980s, when economic sanctions were imposed on South Africa and it did not formally trade in South Africa.

However, when Citroen decided to re-establish its dealer network in South Africa and set up a website to promote its cars here, it found that the domain name had been taken. A Mark Garrod, the owner of the, registered the domain name in March 2000, ostensibly as a tribute site to Citroen cars.

While the website did not criticise Citroen cars, the problem for Automobiles Citroen was that the domain name was the obvious domain name for its website.

The adjudicator ultimately found in favour of Automobiles Citroen and ordered the transfer of the domain name from Garrod to Automobiles Citroen.

The adjudicator’s reasons for reaching his decision are of much interest.

He found that the domain name did not convey to the public the true nature of the website associated with the domain name. Simply put, this means that the domain name did not indicate to the public that, when they accessed the website associated with the domain name, they would be accessing a tribute site for Automobiles Citroen and not the official Automobiles Citroen website.

Importantly for brand owners, the adjudicator found that just because a brand owner was not quick enough to register an Internet domain name identical to its brand does not mean that it should be held to ransom by an Internet user that had registered that name.

This has important implications for brand owners and prospective critics/admirers of any given brand.

For brand owners, the decision confirms that no third party, except the brand owner, is entitled to register a domain name identical to their brand name.

For potential critics/admirers of brands, this decision means that they will need to be careful when selecting a domain name for their website. Based on the adjudicator’s decision, Internet users will risk losing any domain name they might have registered, which name is identical to a brand owner’s brand.

The decision does not close the door to Internet users wishing to voice their opinion about brands that they love or hate. Importantly, the right to freedom of speech remains intact.

At the same time, brand owners will need to remain vigilant and monitor the Internet on a regular basis to ensure that their brands and intellectual property do not slip through the net.
Warren Weertman is a senior associate at Bowman Gilfillan