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Here at WebFuel, we love inviting guest bloggers. Why? Because they bring fresh ideas to the table, while providing great insights from their specific area of expertise. This week we welcome James Katz; a lawyer with the Ottawa law firm BrazeauSeller LLP. His practice focuses primarily on Internet, Social Media and Trade-Marks law. What follows is the first of (hopefully) regular series of blog articles that James will post – that focus on timely Internet related legal issues. We have asked Mr. Katz to provide legal insight into the ever-changing world of the Internet.

Guest Post by James Katz


Let’s start with some interesting news about imminent changes that will affect how Canada’s dot-ca Internet registry system is administered.

It has recently been announced that the rules governing disputes over confusingly similar dot-ca domain names will change, effective August 22, 2011. The goal of these changes that the Canadian Internet Registration Authority (CIRA) will be implementing is to bring CIRA’s policy in line with what has already been in place in those registry systems governed by ICANN (Internet Corporation for Assigned Names and Numbers) for many years.

For those Internet domain owners who have never heard of CIRA or ICANN, or their dispute resolution policies, then a quick review is in order. Essentially, both CIRA and ICANN are non-profit organizations that were set up to control the “unique identifiers” used on the Internet that are commonly called domain names. As mentioned above, CIRA was set up in Canada to control the domain names used in the dot-ca registry system. ICANN’s mandate is much larger, covering the dot-com, dot-org, dot-net, dot-info, dot-biz and other registry systems. Both CIRA and ICANN have dispute resolution policies in place that can be used by domain name registrants (or those that would like to block the use and registration of a domain name) to quickly and (compared to court proceedings) cost effectively seek either the transfer or the cancellation of domain names that are confusingly similar to trade-marks owned by complainants and which are registered in “bad faith”. CIRA’s policy, which is called the CDRP (Complaint Dispute Resolution Policy), had been in effect since 2002. ICANN’s policy, which is called the Uniform Dispute Resolution Policy (UDRP), had been in effect since 1998. Under either policy, a complainant, who is the owner of a trade-mark, can apply to CIRA or ICANN to have a domain name that is confusingly similar to its trade-mark either cancelled or transferred to it, upon the complainant establishing that the registrant registered the domain name in “bad faith”.

Although both dispute resolution policies were similar in scope and language, the major difference between the CDRP and UDRP was in their respective definitions of what constituted registering a domain name in “bad faith”. While the UDRP policy defined that term in a non-exhaustive manner (in other words, these factors can be expanded over time), the CDRP’s definition of “bad faith” consisted of a list of exhaustive factors. Essentially, under the CDRP, “bad faith” registration of a domain name only occurred when a) the registrant acquired the domain name in order to sell it back to the complainant (the legitimate owner of a trade-mark which the domain name in question is confusingly similar to) at a profit; b) the registrant, as part of a pattern of registering domain names, has done so in order to prevent trade-mark owners from obtaining those domain names; or c) the Registrant obtained the domain name primarily to disrupt the business of the complainant.

Although the goal of defining “bad faith” in this restrictive fashion by CIRA was ostensibly to limit the application of the CDRP to cases of classic cyber squatting (that is, the purchase of a domain name consisting of a trade-mark or trade-name that the registrant then wanted to sell back to the respective trade-mark or trade-name owner for a profit), the narrow scope of this “bad faith” definition saw many legitimate rights holders failing to have these confusingly similar domain names cancelled or transferred to their rightful owners.

Therefore, under the amended CDRP that will come into force later this month, those criteria constituting “bad faith” registration of a domain name (listed above) can be considered, but without limitation to other possible circumstances where bad faith can be proven to exist. In other words, it will be up to those interpreting the CDRP (an arbitration panel) to consider and expand the definition of “bad faith” on a case-by-case basis, much as courts in Canada do with the common law. In fact, the new CDRP also lists an independent forth criteria for establishing bad faith registration, and that is when a registrant obtains a domain name in order to direct Internet traffic to it (for commercial gain) by creating a likelihood of confusion with the complainant’s trade-mark. The full version of the new CDRP that will come into force this month can be found online.

This latest criterion for establishing bad faith registration, which more closely mirrors what also constitutes trade-mark infringement in Canadian law, appears to have been directed at what, for trade-mark owners, was the most vexing problem with the soon to be defunct version of the CDRP: the misuse of a trade-mark, in the form of a domain name, that did not constitute traditional cyber-squatting, simply because the registrant was in fact using the domain name to run its own business (which was often considered good faith use by the registrant) and that use of the domain name didn’t “disrupt” (that is, didn’t cause direct interference with) the business of the complainant.

Based on the UDRP experience, the revamped CDRP will almost certainly lead to increased rights for trade-mark owners in cyber-space, as new criteria for establishing bad faith domain name registrations come into existence. For example (and this is an expansion of the definition of “bad faith” that I would like to see, and which has already occurred under the UDRP system), complainants who have trade-mark rights may now be able to stop registrants from using confusingly similar domain names which direct traffic away from the complainant’s own website in order to defame the complainant’s business or products, an occurrence that I have seen far too often in my practice.

Domain name owners in the dot-ca system should therefore be aware that due to this broadened test, brand owners will be policing dot-ca domains more closely, in an effort to further control their brand identities. Conversely, dot-ca domain owners, or those that will be purchasing such domains in the future, should do their due diligence before investing countless hours branding a website, because they may be forced by CIRA to relocate their web presence (losing customers and client contact in the process) at a later time.

Disclaimer: The contents of this Blog post, and associated opinions  are those of its Author, and do not necessarily represent the opinions of WebFuel, or its employees.