1.       INTRODUCTION

1.1.     The digital age is well and truly upon us.

1.2.     Never
before has so much information been so readily available in formats
that can be distributed so easily and with so little error.

1.3.     Digital
data can be sent around the world at the push of a button, and multiple
perfect copies made almost instantaneously.

1.4.     However,
this ability brings with it a raft of potential difficulties for
companies whose success relies on information and control over it.

2.       PARTICULAR ISSUES

2.1.     This
paper considers some specific issues the digital age has raised, and
comments on how businesses may be able to protect your intellectual
property (IP) in these contexts.

2.2.     Most
of the issues fall within existing areas of the law, such as copyright
or trade mark infringement.  However, the application of those areas of
the law in the digital context can be difficult.

2.3.     In
many cases there are questions of interpretation which must be
considered by courts before any certainty exists in an area.  In
addition to working with laws that are framed and worded differently,
the courts of different jurisdictions can have different approaches to
the principles behind the law.

2.4.     The
most commercially expedient means of dealing with some of these issues
may be a technological solution rather than a legal one, where you
should consider a way of physically preventing someone doing something,
rather than trying to determine whether or not you can take legal
action against them once they have.

2.5.     This
paper accordingly includes practical steps you can take to protect IP,
in addition to discussing legal steps and solutions.

3.       USING TRADE MARKS ONLINE

3.1.     Controversy
has arisen out of the online use of trade marks.  This is because
websites can be accessed from anywhere in the world.

3.2.     This
raises the issue of whether a trade mark being used on a website is
being used in every country in the world, exposing the website owner to
wide potential liability.

Judicial commentaries

3.3.     Courts in a number of countries have considered this issue in relation to:

i.            whether
or not the use of the trade mark on the website constitutes trade mark
infringement in a particular country; and

ii.          whether
use on the internet constitutes use in a particular country, for
instance to save a trade mark registration from invalidity on the basis
of non-use.

3.4.     One of the earliest decisions was from the UK, where it was held that:

“The
mere fact that websites can be accessed anywhere in the world, does not
mean, for trade mark purposes, that the law should regard them as being
used everywhere in the world.  It all depends on the circumstances,
particularly the intention of the website owner and what the reader
will understand if he accesses the site.”[1]

3.5.     A
later UK case affirmed this, holding that mere accessibility was
insufficient for trade mark use, and the purpose and effect of the use
had to be considered.[2]

3.6.     US courts consider themselves to have jurisdiction where:[3]

i.            there has been active business in the US;

ii.          an interactive website targets US customers; or

iii.         there are other indications of contact with the US.

3.7.     The
test that has been applied in the US is whether the defendant’s
operation of the website concerned has a substantial effect on US
commerce.[4]

3.8.     The US courts have also noted some factors that might assist in determining whether a website targets the US:[5]

i.            whether the website operator has other forms of advertising in the US;

ii.          whether the website clearly and intentionally accepts orders in local currency;

iii.         whether local telephone numbers are provided for ordering products or obtaining support; and

iv.         whether the use results in significant sales in the US.

3.9.     An Australian court recently held that:[6]

“[If]
there is evidence that the use was specifically intended to be made in,
or directed or targeted at, a particular jurisdiction then there is
likely to be a use in that jurisdiction when the mark is downloaded.”

3.10.  In
that case, Australia was one of the drop-down options in the delivery
address box, and Australian currency being one of the drop-down payment
options.  Despite this, the court held that the website did not target
consumers in Australia, as the goods were not being marketed to
consumers in Australia in a manner that differed from the manner in
which they were being marketed to consumers elsewhere.

3.11.  This
means the mere existence of the website did not constitute
infringement, though the acceptance of an order with a delivery address
in Australia and the delivery of goods to Australia both created prima facie cases of infringement.[7]

NEW ZEALAND

3.12.  This issue does not appear to have been considered by the New Zealand courts.

3.13.  However,
the Intellectual Property Office of New Zealand (IPONZ), which is
responsible for trade marks, considered it briefly in the context of an
application for revocation of a trade mark on the basis of non-use.[8]

3.14.  IPONZ
held that use of a trade mark on an Australian website, through which
customers in New Zealand could also order products, was not use as:

i.            the trade mark related to an outlet store which only existed in Australia at the time; and

ii.          there was no established connection between the trade mark and the orders received from New Zealand.

3.15.  This
sets a high standard for what constitutes use in New Zealand, as even
though the website targeted New Zealand, orders had been received from
New Zealand via the website, and goods had been sent to parties in New
Zealand as a result, this did not mean that the trade mark has been
used in New Zealand.

3.16.  It is unclear how the New Zealand courts will deal with this situation when it arises.

3.17.  They
may adopt a similar approach to that adopted in Australia and the US,
which was nicely summarised in a decision of the trade marks office in
Australia:

“[Use]
of a trade mark on the internet, uploaded on a website outside of
Australia, without more, is not use by the website proprietor of the
mark in each jurisdiction where the mark is downloaded.”[9]

3.18.  And in the Australian Ward decision:

“[Once]
the website intends to make and makes a specific use of the mark in
relation to a particular person or persons in a jurisdiction there will
be little difficulty in concluding that the website proprietor used the
mark in that jurisdiction when the mark is downloaded.”[10]

3.19.  Alternatively, they may adopt the more restrictive approach taken by IPONZ.

WHAT CAN YOU DO?

3.20.  To
avoid being the New Zealand test case, your website could make it clear
which particular markets you are targeting, and specifically stating
that your products are not available in other markets.

3.21.  However,
the overseas decisions have shown that courts take a fairly sensible
view of online trade mark use, and are unlikely to hold you liable in
countries where there has been no particular activity.

4.       METATAGS & INTERNET KEYWORDS

INTRODUCTION TO METATAGS

4.1.     Metatags
are pieces of information embedded in websites that are used by some
search engines when indexing the website.

4.2.     The
metatags do not appear on-screen, hence are not readily visible to an
internet user.  They are only used by computers for indexing purposes.

4.3.     To
understand this better, we will use a fictional bank called PicoBank
that operates a website and has an account called PicoSave and a
finance package called PicoLoan.

4.4.     Metatags used can be:

i.            generic
terms relating to a business and the types of product it offers.  For
instance, PicoBank might include as metatags on its homepage terms such
as bank, account, interest, mortgage, loan and finance.  This would
increase the probability that an internet user searching for a bank
that offers mortgages would be directed to PicoBank’s website;

ii.          trade
marks and/or product names of a business.  For instance, PicoBank might
include as metatags the terms PicoBank, PicoSave and PicoLoan.  This
would increase the probability that an internet user having heard of
PicoBank, PicoSave or PicoLoan would be directed to PicoBank’s website.

4.5.     None of these practices raise IP issues.

4.6.     Metatags
used can also be trade marks belonging to other companies.  Thus
PicoBank might include as metatags the names of other banks and their
products.

4.7.     This is where IP issues arise.

INTRODUCTION TO INTERNET KEYWORDS

4.8.     Internet keywords raise similar issues to metatags.

4.9.     Keywords
are words that trigger advertising, usually on search engine sites. 
For instance, if you enter a search in Google, you are presented with a
results screen.  On the left are the search results.  On the right are
a series of advertisements under the heading ‘Sponsored Links’.

4.10.  The
advertisements that appear beneath this heading do so because someone
has paid Google to have that advertisement appear in response to one of
the words in your search.

4.11.  Like metatags, the words can:

i.            be generic;

ii.          reflect the advertiser’s own name or products; or

iii.         reflect the trade marks of others.

4.12.  For
instance, PicoBank could pay to have an advertisement for PicoBank
appear whenever any of the words mortgage, PicoLoan, or Westpac
appeared.

THE LEGAL ISSUE

4.13.  It
is not clear whether the use of other companies’ trade marks in
metatags or internet keywords constitutes trade mark infringement.

4.14.  This
uncertainty arises because are differing views as to whether or not use
in this manner constitutes ‘use’ in a trade mark sense.

4.15.  This is because the trade mark is not visible to the consumer.

VIEWS OF DIFFERENT COURTS

4.16.  The
Italian courts have held that use as a metatag does constitute trade
mark use, but is only an infringement if it causes confusion among
consumers.

4.17.  In France, Google[11]
has been held liable for trade mark infringement for selling keywords
for sponsored advertisements, on the basis that internet users were
likely to believe the advertiser and trade mark owner were connected in
some manner.[12]

4.18.  In Germany, Google has successfully similar defended a similar action.[13]

4.19.  In the United States, Federal court decisions are divided on this issue.

4.20.  The
appellate courts in the Second Circuit (Connecticut, New York and
Vermont) have held in a number of decisions involving internet keywords
that such use does not constitute trade mark infringement, as it is not
‘use in commerce’.

4.21.  A recent decision is Site Pro-1 v Better Metal, where the New York District Court followed the appellate court decisions

4.22.  However,
the equivalent level appellate courts in other areas have held that
such use does constitute use in commerce.

4.23.  A recent decision is American Blind,
out of California.  This drew on decisions on keyword based banner ads
and metatags, and concluded that the use of trade marks in keywords
does constitute use in commerce.

4.24.  Rescuecom v Google applied the decision in 1-800 Contacts v WhenU, and held that keyword advertising was not use as a trade mark, as:

“[T]here
is no allegation that defendant places plaintiff’s trademark on any
goods, containers, displays, or advertisement, or that its internal use
is visible to the public.”[14]

4.25.  An
Australian author suggests that the invisible use of keywords would be
unlikely to infringe the Australian trade marks legislation.[15]

4.26.  The
UK Court of Appeal has observed that internet users are savvy as to the
advertising techniques used online.  They know that search results
often contain irrelevant listings and are aware that sponsored links
are exactly that – paid for advertising by parties not associated with
the trade mark owner.  Because of this, the public would not
automatically assume a connection between a trade mark triggered search
result and the trade mark owner.

4.27.  On
this basis, that court held that the use of keywords to trigger banner
advertising does not constitute trade mark infringement,[16] and there is no risk that needs to be guarded against by prohibiting the sale of keywords.

THE NEW ZEALAND POSITION

4.28.  Again, this matter has not yet been considered by our courts.

4.29.  However,
it is likely that the position would be similar to Australia, with
invisible use being unlikely to infringe our Trade Marks Act 2003.

4.30.  Even
if the sale of keywords does not constitute trade mark infringement,
action under the Fair Trading Act may be possible where there is a
likelihood of the public being misled or confused.  This means other
protection is available to members of the public where harm is
occurring or is likely, so recourse under the Trade Marks Act is
unnecessary.

WHAT CAN YOU DO?

4.31.  Some search engines, such as Google, Yahoo! and MSN have policies relating to internet keywords.

4.32.  For
instance, Google will remove keyword links in response to a complaint
from a trade mark owner, providing the owner is located outside of the
US and Canada.[17]

4.33.  Be
vigilant.  Monitor the use of your trade marks on the Internet by
entering your company and product names into search engines on a
regular basis and examining the results.

4.34.  If you suspect that your rights may be being infringed, consider what action may be available and appropriate.

5.       PEER TO PEER networks

5.1.     Peer
to peer networks, or P2P networks as they are commonly known, allow
users to link directly to one another’s computers, creating linked
networks.

5.2.     These allow users to share files without being reliant on a central server.

5.3.     The files commonly shared are multimedia files, such as music and films, as well as software and other material.

5.4.     The first P2P network to really catch on was Napster.  This led to a rise in the popularity of P2P networks.

5.5.     Copyright infringement has been a particular concern on P2P networks since this rise in popularity began.

LEGAL CONTROVERSY

5.6.     The US “Betamax decision"[18] held that copying "technologies" are not inherently illegal, if substantial non-infringing use can be made of them.

5.7.     This
decision predates the widespread use of the Internet, but can be
applied to most data networks, including peer-to-peer networks, since
legal distribution of some files can be performed.

5.8.     These
non-infringing uses include sending open source software, creative
commons works and works in the public domain.

5.9.     In
practice, it is believed that many, often most, of the files shared on
P2P networks are copies of copyrighted popular music and movies.
Unauthorised sharing of these copies is illegal in most jurisdictions.

5.10.  This
has led many observers, including most media companies and some
peer-to-peer critics, to conclude that the networks themselves pose
grave threats to the established distribution model.

EARLIER P2P NETWORKS

5.11.  Most of the early P2P networks, such as Napster,[19] Grokster[20] and Kazaa,[21]
were centralised.  In other words, there was a central server that held
an index of files and their locations.  When a user entered a query, it
was routed to the central server, which arranged a direct transfer
between the user’s computer and the source of the file.

5.12.  These
networks experienced protracted litigation by copyright owners,
particularly the major record labels/film studios or their industry
organisations such as the Recording Industry Association of America
(RIAA) and the Motion Picture Association of America (MPAA), as the
operator of the central server could easily be sued.

5.13.  As
a result, a number of these earlier networks shut down, were ordered to
pay millions of dollars in damages, and/or were forced to adopt
legitimate business models, such as paying copyright owners.

MORE RECENT P2P NETWORKS

5.14.  New
P2P networks continue to take the place of the older networks.
 BitTorrent and E-Donkey are currently two of the most popular.

5.15.  These
newer networks are generally decentralised, and not controlled by the
person responsible for releasing the software.  This makes them more
difficult to control.

5.16.  In
2003, the Dutch Supreme Court ruled that P2P software (in that case,
Kazaa) in itself is legal, and that the producers of the Kazaa software
could not be held liable for infringement carried out by users of the
network.

5.17.  More
recently, there have been a number of high profile prosecutions of
uploaders and online distributers of copyright material in a variety of
countries including Hong Kong[22] and France.[23]

5.18.  In
the USA, the Department of Justice is being more aggressive in
prosecuting file sharers.  For instance, in one recent case an
Australian national was extradited and convicted in the US Federal
Court for being part of an international software piracy ring which
distributed software over the internet.[24]

5.19.  Now, P2P technology is increasingly being used as part of legitimate businesses models – eg:

i.            Skype;

ii.          Joost TV;

iii.         BBC
Worldwide (which recently partnered with P2P services through Azureus'
Zudeo software to distribute back catalogue television content).

THE FUTURE

5.20.  P2P
has for years consumed more bandwidth than all other internet use. 
However, latest reports are that for the first time in four years http
traffic has overtaken P2P traffic.[25]

5.21.  This raises the question of whether P2P is becoming a less significant part of the overall marketplace.

5.22.  However, P2P is likely still hurting the box office for new releases of movies and music – eg:

i.            Sione’s Wedding, which was available via P2P networks before its cinema release; and

ii.          Michael Moore’s Sicko, which was released on BitTorrent before its cinema release.

5.23.  Those
using P2P software and/or networks have a range of technologies
available to defeat detectives employed by copyright owners.

5.24.  For
instance, P2P blocklist software such as PeerGuardian can stop the RIAA
and MPAA and other industry groups from identifying file-sharers.

5.25.  P2P
technology is probably here to stay.  Like the VCR in its time there
are substantial legitimate uses for it, notwithstanding that some
networks (eg, Napster, BitTorrent etc) predominantly trade in
infringing material.

5.26.  There will be increasing numbers of legitimate uses of P2P technology.

5.27.  It
is probably impossible to stamp out P2P infringement entirely. Like
piracy in general it is an endemic problem. Perhaps it should be seen
more as a matter of trying to limit the damage done through online
piracy, which is wider than simply P2P software and networks. Going
forward, particular infringing networks will probably need to be dealt
with on a case by case basis.

LEGAL REMEDIES AVAILABLE

5.28.  Proceedings
can be issued against creators of the P2P networks.  However, there are
a number of difficulties with this:

i.            as
most contemporary P2P networks are decentralised, no one person has
control over content, which is dictated by the users (peers).  This
means that it can be difficult to pin legal liability on the people
originally responsible for the network software;

ii.          it can be difficult to identify who is behind the P2P network;

iii.         the
servers are often based in foreign jurisdictions, where intellectual
property laws may be difficult to enforce, eg Russia; and

iv.         once
a work is released onto one P2P network, it quickly spreads onto other
networks.  This means taking legal action against one particular
network is unlikely to stop a work from being distributed, even if that
network is shut down.

PRACTICAL STEPS

5.29.  Maintaining
the security of works sensitive to online copying is imperative.  Films
are often released onto the P2P networks in unfinished pre-production
form as a result of a lapse in internal security.  Taking steps to
ensure internal security of such works will help to reduce this.

5.30.  Watermarking
of digital works in already common.  This allows works to be traced
back to source, so that the party responsible for any unauthorised
release can be identified.

5.31.  Digital
Rights Management tools (DRM’s) are becoming increasingly common and
can assist with preventing infringing copies from being made or used,
eg:

i.            activation or licence keys for software, particularly ones that must be updated regularly;

ii.          DRM’s incorporated into MP3 and other digital formats; and

iii.         encryption software like CSS on DVDs to them from being easily copied.

6.       ONLINE COPYRIGHT

6.1.     Contrary
to common belief, the usual laws of copyright apply equally to digital
material as they do to material in more traditional media.

6.2.     The difficulties with online copyright arise out of:

i.            the ease of propagation of material; and

ii.          the jurisdictional issues raised by material spreading from one country to another.

SEARCH ENGINES AND THUMBNAIL IMAGES

6.3.     The
issue of thumbnail images, such as those presented on Google, have been
the subject of litigation, particularly with the increase in mobile
phones that can display images of this size as their background.

6.4.     One
recent US case involving Google and thumbnail images was brought by
Perfect 10, a magazine that provides images on a paid subscription
basis.[26]

6.5.     Various parties were placing images obtained from Perfect 10 on their websites, which were indexed by Google.

6.6.     Perfect 10 sought an injunction preventing Google displaying such images, on the basis of copyright infringement.

6.7.     The Court of Appeals held that:

i.            Google’s indexing provided a significant benefit to the public and was a fair use;

ii.          Google’s
provision of links to full-size images could not be primary
infringement as Google did not send the full-size images to the user;

iii.         Google’s
provision of links to full-size images could only be contributory
infringement if Google was aware that the images linked to were
infringements, that there were simple steps available to it to avoid
damage to Perfect 10, and that it failed to take such steps.

6.8.     You
should consider your legal position carefully before taking images from
other websites and using or displaying them, whether in their original
or a modified format.  While there are potential defences available,
you must ensure that you fall clearly within these before proceeding.

ONLINE NEWS SITES

6.9.     The indexing on search engines of news stories is another area of controversy.

6.10.  Google was recently sued by a Belgian copyright protection group representing 17 newspapers that demanded it:[27]

i.            remove headlines and links to articles posted on their news sites without their permission; and

ii.          stop caching the full versions of their stories.

6.11.  The
headlines Google displayed were automatically generated.  They included
headlines from the newspaper, snippets of text and photographs, with
links to the full stories on the original webpages.

6.12.  Google’s cached pages offered free access to archived articles that the papers usually sell.

6.13.  The
group was happy for both of these practices to continue, providing they
were first asked and Google paid to use the content.

6.14.  The
court’s decision, issued in February 2007, held that Google was
reproducing and publishing works protected by copyright, and could not
rely on exemptions relating to copyright or similar rights, such as
fair use.  It was ordered to remove all articles and photographs
belonging to members of the group, or face significant fines.

6.15.  Following
the decision, Google has removed all references to the newspapers
involved from its search index and its cache, which is not what the
group wanted.

6.16.  The
ruling was based on EU law and could trigger similar cases against
Google in other nations including Norway, Austria and Italy, though
Google has appealed the decision.

6.17.  The newspaper group is still negotiating similar copyright issues with Yahoo and MSN.

6.18.  This
is only one example of such decisions.  There are conflicting rulings
on this issue which is fairly new and complicated.

6.19.  To avoid such issues, technical solutions are available.  These include:

i.            including
a robots.txt file on your website.  This standard has existed since
1994.  That file contains instructions to the robots used by search
engines as to which files may not be indexed; and

ii.          including the command NOARCHIVE in the code of a webpage.  This will prevent Google’s robots caching the webpage.

YOUTUBE

6.20.  YouTube
is a video sharing website that allows members of the public to upload
and view videos.  It was acquired by Google last year for $1.65 billion.

6.21.  Following
a demand by Viacom that YouTube remove 100,000 of Viacom’s movie clips
from the YouTube website, Viacom has filed a suit against YouTube for
US$1 billion.

6.22.  Viacom alleges that:

i.            it owns the relevant movie clips;

ii.          they appear on the YouTube website without authorisation; and

iii.         YouTube has benefited from massive, intentional, copyright violations.

6.23.  YouTube
is currently testing video fingerprinting technology that it hopes will
help prevent people posting content without the owner’s consent.

6.24.  Google
and YouTube are collaborating with Time Warner and Disney on the new
identification tools.  Engineers at Google hope the technology will
enable content owners to identify attributes in video clips uploaded to
the site that have copyright protection. The content owners can then
either block them from being posted or opt to receive a share of the
advertising revenue.

6.25.  Again,
vigilance is the answer at present.  By uploading material to YouTube,
the uploader represents that it either owns the material or is
authorised to upload it.

6.26.  If
you believe your copyright is being breached by material available on
YouTube, you can request that the material be removed.[28]

THE NEW ZEALAND COPYRIGHT (NEW TECHNOLOGIES AND PERFORMERS' RIGHTS) AMENDMENT BILL (THE “NEW TECHNOLOGIES BILL”)[29]

6.27.  The
Copyright Act gives copyright owners exclusive rights that allow them
to control certain aspects of a work's exploitation, while at the same
time providing limited exceptions to these rights for copyright users.

6.28.  The New Technologies Bill proposes to amend New Zealand’s Copyright Act 1994 in three areas:

i.            technological protection measures (TPMs);

ii.          liability for internet service providers (ISPs); and

iii.         the copying of sound recordings for private and domestic use.

6.29.  In brief, the New Technologies Bill will:

i.            expand
the definition of "copy protection" to include TPMs that protect all
rights provided to copyright owners.  At present, this covers only
copying, not other rights such as the right to communicate a copyright
work.  An example of technology that can be protected under TPMs is the
AAC music format used by iTunes;

ii.          introduce
a fine of up to $150,000 and/or a term of imprisonment of up to five
years for the following, which will be criminal offences:

·              commercial dealing in devices, services or information designed to circumvent TPMs; and

·              commercial dealing in works where the electronic rights management information has been removed or altered;

iii.         provide
protection for Copyright Management Information (CMI).  CMI means
information attached to or embodied in, a copy of a work that
identifies the work and its author or copyright owner[30].  The new Act prohibits a person from removing or modifying CMI attached to or embodied in a copy of a work.

iv.         repeal
section 88 of the Copyright Act, which allows cable programme services
to retransmit free-to-air television broadcasts without the permission
of the broadcaster;

v.          limit
the liability of ISPs (but not providers of website hosting?) for both
primary and secondary infringement in appropriate circumstances.  The
Bill provides two alternative systems which may be used by ISPs which
discover infringing material;

·              a
"notice and takedown" system whereby after receiving advice of
infringement of copyright from the copyright owner, the ISP must put
the alleged infringer on notice of the infringement.  If the alleged
infringer does not remove the infringing material, the ISP must do so
to avoid liability for copyright infringement; or

·              a
"notice and notice" system whereby after receiving advice of
infringement of copyright from the copyright owner, the ISP must send
the notice to the alleged infringer.  If no response is received from
the alleged infringer within 30 days, the ISP must take the material
down or deny access to the alleged infringer and notify the copyright
owner accordingly;

vi.         introduce
new exceptions for format-shifting of sound recordings for private and
domestic use (ie the transfer of music from one form to another, such
as from CD to an MP3 player), and for decompilation and error
correction of software; and

vii.       clarify
and amend the exceptions to copyright owners' exclusive rights,
particularly in relation to fair dealing, library, archival, and
educational use, and time shifting.

6.30.  The
New Technologies Bill is currently before a select committee which is
due to finalise its report by 25 July 2007.

7.       DOMAIN NAMES

BACKGROUND

7.1.     Every
computer connected to the Internet has a unique IP address.  This is a
sequence of numbers such as 210.48.109.98.

7.2.     These addresses are not easily remembered by internet users.

7.3.     Domain
names are unique.  Each one links to an IP address.  They were
developed as a way of providing a more memorable alternative to the IP
address, making it easier for internet users to locate a particular
website.

7.4.     For instance, entering www.baldwins.com
into your internet browser will take you to the server having the IP
address stated above, and is more readily remembered than the sequence
of numbers.

7.5.     Domain registration and related services are worth billions of dollars a year.

7.6.     There
is a well-established and continuously expanding market in the resale
of domain names, particularly generic names such as www.vodka.com or www.poker.com.

7.7.     Such
domain names can themselves be of considerable value, largely because
of the amount of traffic the domain name will generate to any website
hosted on it.  Examples include business.com which sold for US$7.5
million in 1999, creditcards.com which sold for US$2.75 million in 2004,[31]
as well as the epic saga of sex.com, the advertising revenue of which
was in the millions of US dollars per month at its peak.

7.8.     The
potential value of domain names is supported by the fact that
approximately 50,000,000 .com domain names are currently registered.[32]

LEGAL ISSUES

7.9.     Typically,
disputes arise in the context of trade mark infringement.  These
usually involve so-called “cyber-squatters”, who register domain names
the same as or similar to well-known trade marks.

7.10.  Where
the domain name registered is a mis-spelling of a well-known trade
mark, this is known as “typo-squatting”.  The registrant is hoping to
generate traffic revenue from people who mistype the intended domain
name in their web-browser, such as by typing wwwgoogle.com rather than
www.google.com.

7.11.  These
people make money through advertising revenues generated by traffic
going to that website, thinking it is connected to the trade mark
owner, or by selling the domain name to the trade mark owner.

7.12.  The
hundreds of different top level domains (TLD’s), including generic
TLD’s (eg .com, .net, .biz, .mobi etc), and country code TLD’s (eg .nz,
.uk, .us) means that trade mark owners are faced with large number of
domains that they potentially have to protect or risk someone else
infringing their trade marks.

COURT PROCEEDINGS

7.13.  Court
proceedings relating to domain names can be brought for trade mark
infringement, passing off, breach of Fair Trading Act, and similar
legislation in other jurisdictions.

7.14.  A number of such cases have been considered by the New Zealand courts.[33]

7.15.  In
general, the courts have granted injunctions preventing the use of
domain names in a manner that is likely to infringe the rights of the
plaintiff.

7.16.  However,
it is unusual for the courts to order the transfer or cancellation of
the domain name, as in most instances it has been considered that the
domain name could be used in a non-infringing manner.

7.17.  Most
cases have been settled following the injunction decision.  However,
getting to that stage is relatively expensive and time-consuming, and
still requires resolution of the matter in some form.

UNIFORM DOMAIN-NAME DISPUTE-RESOLUTION POLICY (UDRP)[34]

7.18.  The
UDRP is a process established by the Internet Corporation for Assigned
Names and Numbers (ICANN) for the resolution of disputes involving the
registration of internet domain names.

7.19.  The UDRP applies to:

i.            the unrestricted, generic top-level domains (gTLDs), such as .com, .net, .org and .biz; and

ii.          either
directly or in a modified form, to certain country code top-level
domains (ccTLDs) such as .au (Australia) and .fj (Fiji).[35]

7.20.  By registering a domain name with any of these extensions, the registrant:

i.            represents
and warrants that registering the name will not infringe upon or
otherwise violate the rights of any third party; and

ii.          consents
to be subject to the UDRP if any third party claims that its rights are
infringed by the registration and/or use of the domain name.

7.21.  To initiate a UDRP proceeding, the complainant files a Complaint that sets out:

i.            Its rights;

ii.          how these rights are infringed by the registration;

iii.         the
remedy it seeks (usually a transfer of the domain name to the
complainant, though cancellation is also available).

7.22.  The elements the complainant must show are:

i.            that the domain name is identical or confusingly similar to a trademark in which the complainant has rights;

ii.          that the defendant has no rights or legitimate interests in the domain name; and

iii.         that the defendant registered and is using the name in bad faith.

7.23.  Supporting evidence is annexed to the Complaint.

7.24.  The registrant can then file a Response, accompanied by evidence, showing how the above elements are not made out.

7.25.  The
Complaint and Response are referred to an independent panellist
appointed by an approved arbiter such as the World Intellectual
Property Organisation (WIPO) to make a decision.

7.26.  The
goal of the UDRP was to create a streamlined process for resolving
domain name disputes, which would be quicker and cheaper than a
standard legal challenge.  Tight timeframes apply to every step in the
procedure, meaning a decision usually issues within 42 days after the
Complaint is filed.

7.27.  Advantages of the UDRP:

i.            faster and cheaper than court proceedings;

ii.          the decision is implemented by the domain name registrar, not the registrant;

iii.         no jurisdictional issues as the domain name registrant has submitted to the UDRP by contract; and

iv.         no regional variations in decisions.

7.28.  Disadvantages of the UDRP:

i.            costs awards are not available;

ii.          previous
decisions are not binding, so there is no guarantee of success in
similar fact situations to earlier decisions;

iii.         decisions can be appealed to local (national) courts; and

iv.         it can be difficult for trademark owners to prove registration and
use of a disputed domain name in bad faith.  This has led to a number
of other domain name dispute policies based on the UDRP relaxing this
requirement to "or" (eg the policies applicable to .us or .eu domain
names).

7.29.  The UDRP has been in force since 1999 and over 11,000 decisions have issued.

.NZ DISPUTE RESOLUTION POLICY[36]

7.30.  The
.nz registry, administered by InternetNZ and the office of the Domain
Name Commissioner, created its own policy based largely on the Nominet
UK dispute resolution policy.  The policy came into force on 1 June
2006.

7.31.  Under the .nz dispute process, a complainant must show that it:

i.            has rights in respect of a name or mark which is identical or similar to the Domain Name; and

ii.          the domain name, in the hands of the respondent, is an unfair registration.

7.32.  The defendant is given an opportunity to respond.

7.33.  If the claim is successful, the domain name can be ordered to be transferred to the claimant.

7.34.  To date, 14 decisions have issued since the policy came into force on 1 June 2006,[37] 9 of which resulted in transfers of the domain name involved.

STEPS THAT CAN BE TAKEN

7.35.  Taking
complaints against potentially infringing registrations, through court
or a dispute resolution process, is expensive and outcome uncertain
(although the majority of cases do tend to favour the trade mark
owners).

7.36.  We
generally advise businesses to register domain names that represent
their core business, products and trade marks, in relevant gTLDs and
ccTLDs.

7.37.  They
may also want to register common misspellings or variations as a
defensive strategy – ie, to prevent cyber squatters from registering
them and taking unfair advantage of their trade marks.

7.38.  Information is key – you must monitor how your name and brands are being used in the marketplace;

7.39.  A useful search tool is the URL-only search in Google, to reveal uses of your brands in domain names;

7.40.  Another is the typosquatting search tool provided by Domain Tools,[38] which shows which variants of your name/brands are being used.

The
information in this paper is for your information only.  It is not
intended to be either exhaustive or complete, and should not be relied
on when making legal decisions.  If you would like to discuss any of
the issues raised in this paper, or any other issue, please do not
hesitate to contact us.