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Step-by-step guide to avoiding the backlash when protecting a brand against dilution By Rachel Sikwane

With the proliferation of social media, it is not uncommon for brand owners to find their brands and trade marks 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.

While this may or may not be true, brand owners should guard against the possible dilution of their trade marks if they are not protected against uncontrolled use by third parties.
 
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.

If they are not, they should certainly make themselves aware that these regulations entitle brand owners to lodge a complaint against the registrant of a co.za 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 its use.

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:

FIFA      fifa.co.za
Standard Bank of South Africa standerdank.co.za; standardank.co.za; stanardbank.co.za; standardbak.co.za; stndardbank.co.za; stadardbank.co.za; sandardbank.co.za; etc.
Telkom SA Ltd   telkommedia.co.za

Contrary to some perceptions, it is 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 mycoke.co.za 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 – hence a plethora of negative comments levelled against 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 Brand Enforcement division of Bowman Gilfillan

Friday, April 17, 2009