Few people are naive enough to believe the kiddies’ rhyme that goes, “Sticks and stones can break my bones, but words will never harm me.” But even the few die-hard believers will soon have to concede that, in the global economy, words can cost you money, at the very least.
That’s because good domain names have become scarce, with most generic words already registered by individuals and corporations. In addition, as commercial interest in the Internet expands and globalisation increases the reach of corporations, names and words are becoming the subject of litigation.
Late last year Mike Rowe, a 17-year-old Canadian, registered the domain name Mikerowesoft.com for his website. Soon afterwards he received a letter from Microsoft’s lawyers demanding that he transfer the name to Microsoft and offering him a $10 settlement. The case received widespread coverage on the Internet, mostly negative, which forced Microsoft to put a more generous spin on the issue. Rowe finally gave up the domain name in return for help with his Microsoft certification training and some gifts, including an Xbox game console.
As another example, take the local domain name Menshealth.co.za. The publishers of the popular men’s magazine Men’s Health, Touchline Publishing, recently filed a suit against medical advice firm Men’s Clinic International in a dispute over the domain name, which Men’s Clinic had registered in 1998, ahead of Touchline.
Even governments have been dragged into domain-name disputes, such as when the South African government took a private company and holder of the domain name Southafrica.com to court. Virtual Countries registered the domain name and South Africa has taken legal action to try to get it back. It now seems that the government has accepted it is unlikely to win back the name and is instead focusing on building up the Southafrica.info website. New Zealand has already lost a similar case against the same company.
Musician Gordon Sumner (aka Sting) tried and failed to get hold of Sting.com, which is run by Michael Urvan who has been using the nickname “Sting” online for years.
Fashion house Armani has won a string of domain disputes, nine out of 11 in fact, but failed with Armaniexchange.net and Armani.com. The latter is owned by Anand Ramnath Mani who has been trading under the name “AR Mani” since 1981.
Brand names (which often consist of everyday words — think of Apple) carry a premium in the business world where they have to compete in a cluttered environment. Business Week publishes an annual Global Brand Scorecard, where it places monetary values on the brand names of major corporations. In its 2003 review it valued Coca-Cola’s name at $70,45-billion and Microsoft’s at $65,17-billion. Of the top 10 brands on the index, eight were American, one German and one Finnish. All of them were valued at more than $20-billion.
The Internet Corporation for Assigned Names and Numbers — the organisation responsible for managing the generic top-level domains such as .com, .net and .org — together with the World Intellectual Property Organisation (Wipo), has set up a Uniform Domain Name Dispute Resolution Policy (UDRP). During a domain-name dispute, a Wipo panel investigates whether a name is identical or confusingly similar to a trademark, whether the respondent has legitimate interests in the domain name and whether the domain name was registered and is being used in bad faith.
In South Africa about 150 000 co.za domain names have been registered, with about 30 000 to 40 000 South Africans owning .com domain names, according to Calvin Browne, a director at UniForum, the company that manages co.za domain names.
The country has no dispute resolution policy because the Ministry of Communications and the Department of Trade and Industry, which are responsible for setting up such a policy in terms of the recent Electronic Communications and Transactions Act, have not yet done so.
This means that, should private negotiations break down, the only way to resolve disputes are through the courts — an expensive, slow and uncertain process. About 100 cases have already gone to court, says Browne, with many disputes never making it that far.
Domain-name disputes are becoming more complicated as globalisation decreases the governance of geography and national laws over trademarks and other intellectual property.
Dominic Cull, an associate at Nicciferguson Attorneys, explains that identical trademarks used to be able to coexist because they were registered in different classes (in other words, the areas in which the trademarks are used are distinguishable from each other on the basis of the different goods or services to which the trademark relates), but there can obviously be only one domain name at a domain level.
The Menshealth.co.za case is a good example of this. While Men’s Health is a registered trademark and well known as a magazine brand, Men’s Clinic has an obvious and legitimate interest in the domain, is using it without trying to misrepresent it as the magazine brand, and operates in a sector other than publishing.
If this goes to the Wipo, Men’s Clinic might get to keep its domain. A South African court, on the other hand, might well treat the issue as a simple trademark infringement and could rule in favour of the magazine brand, says Cull.
Ironically, Touchline also publishes SA Sports Illustrated, which it launched in spite of the wide reputation and brand power of Sports Illustrated, also a sporting magazine published by Time Warner in the United States. Time Warner has since made it known that it doesn’t intend taking Touchline to court.
Cull believes that the Wipo procedure has been successful, and that few would argue that the South African courts are equipped to deal with matters of this nature. Adopting the Wipo procedures could save South Africa from reinventing the wheel.
“The Wipo procedure has international scope and has been designed and streamlined specifically for specialised disputes of this nature,” says Cull. “It works well in practice by giving relatively quick and inexpensive results.”
Multinationals are clearly rushing to grab back what they see as their rightful property, often going to the same extremes that Microsoft did against Rowe, or as media firms sometimes do against fan sites.
Does this mean we are seeing a transfer of domain names from the have-nots to the haves (small firms to conglomerates, fans to holding companies, Third World to First World)?
“This is probably valid in the sense that those with money will generally always have better access to formal dispute resolution and be better equipped to take advantage of it,” says Cull. “The value of, and protection afforded to, intellectual property is the subject of fierce debate all over the world and there does appear to be an ‘intellectual property’ grab occurring on a global scale.”
Cull is quick to point out that he does not believe that the UDRP aims to redistribute domain names from the ordinary person to the powerful. Rather, it attempts to balance the rights of trademark holders and others with legitimate interest in a domain.
So when will South Africa get its own domain name dispute resolution body? Astrid Ludin, Deputy Director General of the consumer and corporate regulation division within the Department of Trade and Industry, says the department is aware of the need to develop such a policy jointly, but that action has not yet been taken. Ludin says the department will begin work on this in the current financial year, but was not able to give a timeframe.
In the meantime, here’s hoping your name remains thoroughly undesirable.
Web guide
Wipo domain dispute resolution service: arbiter.wipo.int/domains/
Internet Corporation for Assigned Names and Numbers: www.icann.org