Want to buy a domain
name? Recent reports of millions being spent for names such as loans.com
and business.com have fueled an enormous interest in generic domain names
that describe either the type of business or the geographic source of the
goods and services.
However, a recent
Federal Court decision demonstrates the weakness of such names, and the
dificulty of preventing the use or registration of very similar, or virtually
identical domain names, often for competitive enterprises.
In Toronto.com v.
Sinclair and Cole dba. Friendship Enterprises, Jan. 27, 2000 (Fed.Ct. No.
T-1163-99), the Federal Court refused an application for an interlocutory
injunction by a partnership of The Toronto Star and Bell Actimedia, the
owner of the domain name toronto.com, who sought to enjoin the use of Toronto2.com,
and the website operating at that address.
While only an interlocutory
decision, and as yet the reasons of the court have not been released, the
case is perhapos a percursor to what owners of generic domain names might
expect if they attempt to enforce their rights against others with similar
The interest in generic
domain names flies in the face of decades, if not centuries, of jurisprudence,
legislation, and legal advice about what makes a good trademark. Generally
the best and strongest marks are not descriptive, but instead, fanciful
words that have no reference to the goods, the services or their place
The Canadian Trade-marks
Act, like similar legislation in most countries, specifically prevents
the registration of marks that refer to a character or quality of the wares
or to their place of origin or that are the common name for the goods.
The theory is that it would give traders gaining rights in such words an
unfair competitive advantage if they could take out of the trade vocabulary
words commonly used to describe the goods or to name the goods.
Accordingly the word
SHOE is not available for shoes, and the word BOOK can not be registered
for books. Not so in e-commerce. As with so many other aspects of life,
the Internet has rewritten the rules. The Internet Authority for Assigned
Names and Numbers (ICANN), which now regulates the registration of .com,
.org and .net domain names, exercises virtually no control over what can
and cannot be registered. Instead, the system operates on a first-come,
first-served basis. Whoever is prepared to pay the modest registration
fee ($70 U.S.) can have the registration.
of the jurisprudence in this area (primarily originating in the U.S.),
focussed on disputes between those who registered famous marks and names
and then tried to extort funds from the rightful owners. Recent caselaw,
legislation in the U.S. and the introduction of a dispute resolution policy
to deal with bad faith domain name registrations have gone a long way to
solve such problems.
However, while the
cyberpirates were fighting with the owners of the trademarks and famous
names, other Internet entrepreneurs were buying up the rights in nouns,
laudatory terms, and geographic place names, and these have now become
believe that customers wanting a loan will type in loans.com. Whether or
not that's true, there is, nevertheless, a strong market for these names,
with many sites listing names for sale at astronomical amounts.
Since these words
are often ones that could never have been registered as trademarks, the
question is whether these domain names will turn out to be valuable, or
function well to distinguish any particular business. Since the domain
name rules permit another domain name to be registered as long as it is
not identical to an existing name, there is nothing to stop others, competitors
or otherwise, from registering very close domain names.
In the recent case,
the plaintiffs had registered the domain name "toronto.com" and had also
filed a trademark application, which had received a first refusal letter
from the Trade-marks Office. They operated a website with information about
events and activities in the city.
The defendants registered
the domain named "Toronto2.com", for a business about Internet activity
in the city. The plaintiffs also alleged copyright infringement arising
from linking and framing by the Defendants website to the plaintiffs, although
by the date of the hearing, such activities had ceased.
The judgement, by
Justice Elizabeth Heneghan, was issued without reasons - and the reasons
still haven't been released, so it is difficult to speculate on the most
important factors in the case. Interlocutory injunctions are notoriously
difficult to attain, since the Federal Cour requires a finding of irreparable
harm, which is a very high onus that plaintiffs find difficult to meet.
However, the defendants have helpfully recorded all the developments of
the case, except for the fact that an appeal has been launched, on their
website, and it is possible to see some of the arguments the court heard
For example, the
defendants referred to caselaw on the weakness of geographic names as trade
marks, and suggested that without evidence of secondary meaning, such names
should not be the subject of exclusive rights.
In fact, they cited
David Vaver, a well known intellectual property academic, who specifically
used the example of "Toronto" as a word that is clearly descriptive. There
was also evidence of over a thousand domain names including the word :Toronto"
and several informational websites that used the word "Toronto" in the
In the absence of
written reasons, it is impossible to know whether the case was decided
on issues relating to irreparable harm, the balance of convenience, or
the tests relating to the strength of the case. However, the decision is
illustrative of the difficulties that those registering a generic domain
name will experience, should they attempt to create a barrier around their
of domains such as toronto.com may not prevent the use of similar domain
names, such as Toronto2.com, or 4toronto.com.
It will only be
with significant investments in publicity that such domain owners can create
any strong brand awareness.
While the rules for
domain name registration differ greatly from trademark registration, since
the domain name doesn't merely act as an Internet address, but instead
is the way businesses distinguish themselves on the Net, e-commerce companies
should be aware of the limitations of creating strong rights in generic
In the long run,
following the long established trademark registration rules may lead to
stronger and more enforceable rights.
a partner in the Toronto intellectual property
of Bereskin & Parr,
practises in the area of trade mark
copyright, with an increasing emphasis
intellectual property in e-commerce.