When domain parking can be a violation of others’ rights

Domain parking is the registration of an internet domain name without that domain being associated with an e-mail address or a website.

Written by Siboniso Mncwango & Likonelo Magagula of Denys Reitz

Domain parking is the registration of an internet domain name without that domain being associated with an e-mail address or a website. Sedo Parking and similar online revenue services allow domain name registrants to park domain names. Domain names then link to websites which display keywords and phrases determined by the domain name owner. The domain name owner receives payment for visits to the website and clicks on the pre-selected keywords. An example would be when a registrant registers a name with the intention of using it in future as an active domain name but in the meantime the registrant ‘parks’ it in a domain name parking website.

Registrants who park domain names that are identical or materially similar to existing domain names or trade marks must be careful not to infringe rights of third parties.

The South African Institute of Intellectual Property Law (SAIIPL) is an accredited dispute resolution service provider in terms of the Electronic Communications Act 2002 and resolves domain name disputes.
Recently SAIIPL adjudicated on a dispute between Mxit Lifestyle (Pty) Ltd (the complainant) and Andre Steyn (the registrant).

The complainant, an operator of chatrooms nationally and abroad, had registered the domain names, mxit.co.za and mxit.com and had applied for the registration of the trade mark MXIT for the purposes of running its business. The registrant subsequently registered the domain name "mixit.co.za" (the disputed domain). The registrant parked the disputed domain name in an advertising revenue services website and associated it with keywords which had direct reference to the complainant’s business operations i.e. "chat", "mxit" and "mobile". Notably the registrant only commenced use of the disputed domain name after the complainant had acquired a substantial reputation in its domain names and trade mark through use.

The complainant objected to the use and registration of the disputed domain name based on the argument that its domain registrations predated the registration of the disputed domain name. On this issue the adjudicator ruled that a mere domain registration or trade mark application without use was not sufficient to confer rights to the complainant, it having been established that the complainant had no goodwill at the time of the registration of the disputed domain name.

The adjudicator found that, although the registrant’s intentions were not in bad faith when he registered the disputed domain name, he had nonetheless proceeded to use the domain name in a manner which led people or businesses to believe that the disputed domain name was registered, operated or authorised by or otherwise connected with the complainant’s business; and by so doing used the domain name abusively. The adjudicator therefore held that although Mxit Lifestyle did not have any goodwill in the MXIT trademark, domain names or company name prior to the registration of the disputed domain name by the registrant, regulation 3(1)(a) requires a complainant to show that it had rights on the date of the complaint, not on the date of the registration of the disputed domain name.

Because of the similarity between the disputed domain name and the complainant’s trademark "MXIT" and domain names, internet users were likely to believe that the disputed domain name was connected with the complainant, thus causing deception and confusion. The disputed domain name was therefore transferred to the complainant.

Domain name parkers should therefore be wary of using keywords or phrases which are related to another party’s trade mark or company name, as such use may amount to abusive use of a domain name. One of the important precedents set by this ruling is that use of a domain name in a way which is calculated to mislead the public or appropriate the goodwill of a third party will not be permitted.
Copyright © Deneys Reitz 2009

Copyright © Deneys Reitz 2009

Copyright © Deneys Reitz 2009