Monday, July 06, 2009

With the increase in social media and the use thereof, it is not uncommon for brand owners to find that their brands and trade marks are being used on websites or as domain names. At times, the owner of the website may even be claim that he or she is “assisting” the brand owner by providing it with free publicity, as opposed to defaming the brand owner’s brands.
However, brand owners are warned against the possible dilution of their trade marks if they are not protected against uncontrolled use by third parties.
In this column, I will discuss one manner in which a brand owner can protect his or her brand from use as a domain name. I will also highlight an ironic situation that may arise when a brand owner tries to defend its brand’s image and reputation.

Domain Name Disputes
Brand owners may not be aware of developments in the law that saw the promulgation of Alternative Dispute Resolution (ADR) regulations, in accordance with The Electronic Communications and Transactions Act. These regulations entitle brand owners to lodge a complaint against the registrant of a domain name if it amounts to either an abusive registration or an offensive registration.
In terms of regulation 1 of the ADR regulations, an abusive registration is defined as a domain name which, at the time when it was registered by the registrant, took unfair advantage of or was unfairly detrimental to the complainant’s rights or, has been used in a manner that takes unfair advantage of or is unfairly detrimental to the complainant’s rights.
The complainant (brand owner) can rely on his or her trade mark rights and/or common law rights. A brand owner acquires common law rights by virtue of the reputation that accrues to the brand through use of the brand.
Factors which may indicate that a domain name amounts to an abusive registration include:
a) whether the registrant of the domain name acquired it primarily to sell, rent or transfer the domain name to a complainant for valuable consideration in excess of the registrant’s reasonable out-of-pocket expenses;
b) whether the registrant primarily intended to block the registration of the domain name in which the complainant has rights;
c) the registrant intended to unfairly disrupt the business of the complainant;
d) prevent the complainant from exercising his or her rights;
e) whether or not the registrant is using the domain name in a manner that leads people or businesses to believe that the domain name is connected with the complainant or
f) whether the registrant is engaged in a pattern of making abusive registrations.
 Depending on the complainant’s proven rights as well as the facts of the case, a successful complaint could result in the adjudicator ordering the domain name to be transferred to the complainant. This is exactly what was ordered in the following examples:
Standard Bank of South Africa                      ;                  ;;;;;; etc.
Telkom SA Ltd                                                  

The Irony
It is very easy to register a website. As a result, brand owners now have to police a new medium in order to protect their brands and ensure that their trade marks are not diluted. However, in doing so, it is not uncommon for brand owners to face criticism from the public and unintentionally damage the very brand they are attempting to protect.
Recently, Coca-Cola South Africa faced some criticism when it closed the website owned and run by Jason Bagley. The website was used as a blog which gave information on and comments about an annual concert sponsored by Coca-Cola. Although Coca-Cola South Africa did not go as far as to lodge a complaint in terms of the ADR regulations, according to news reports, Mr Bagley closed the website after receiving a letter of demand from the well-known brand owner. Needless to say, many visitors to Mr Bagley’s blog were disappointed with the brand owner’s actions and their disappointments were expressed in negative comments made about the brand owner and its brand, in Mr Bagley’s defence.
However, brand owners understand that to build a brand’s reputation, such battles need to be fought to prevent the brand from being diluted in the minds of the public. The irony is that in fighting these battles, brand owners risk damaging their brands in the minds of the public, even if it is only for a short period of time.

Rachel Sikwane is an associate at Bowman Gilfillan in the Brand Enforcement Department.