The first CO.ZA domain name Dispute is Decided

The Adjudicator in the first co.za domain name dispute lodged with SAIIPL in South Africa has refused to order the transfer of the domain name mrplastic.co.za to the Complainant. The Complainant is Mr Plastic CC, an organisation which has been trading under the name “Mr Plastic” since 1976.  The Registrant is Mr Plastic & Mining Promotional Goods CC, an organisation that has been trading under the name “Mr Plastic” since 1989.  The Registrant and the Complainant have traded concurrently for the past eighteen years in relation to substantially similar business, being the sale of plastic products.

The Registrant registered the domain name mrplastic.co.za in October 2000 and commenced operating a website under www.mrplastic.co.za.  Later, the Complainant sought to register the same domain name and was unable to do so.  More than six years after the registration of the domain name in dispute by the Registrant, the Complainant demanded that the Registrant should cease all use of the offending domain name.  The Registrant declined to do so. 

The Complainant’s case is that it has rights in respect of a mark, MR PLASTIC, which is identical or similar to the domain name in dispute and that in the hands of the Registrant, the domain name is an abusive registration in terms of Regulation 3(1) of the Alternative Dispute Resolution Rules.

The Adjudicator held that in order to succeed in this claim, the Complainant must prove that it has rights in the name or mark MR PLASTIC.  The Adjudicator found that the mere registration of a company or close corporation name does not per se confer the right to restrict third parties from using that name.  The Complainant must show that it has used MR PLASTIC as a trade mark so extensively that it has acquired substantial rights in it.  In essence, the Complainant is relying on the common law cause of action passing off as the grounds of its objection.  If it were able to prove a claim of passing off, the domain name in dispute would be an abusive registration. 

The Adjudicator held that in order to prove passing off, the Complainant must show that the trade mark MR PLASTIC enjoys a substantial repute and that as a result, the trade mark is distinctive of the Complainant specifically.  The trade or public must automatically associate the trade mark MR PLASTIC with the Complainant and no other trader. 

The Adjudicator found that the Complainant had indeed established that the Complainant’s business under its name “Mr Plastic” enjoys a reputation.  However, so too had the Registrant.  Moreover, the “Mr Plastic” name has been used by several other entities for several years.  The Adjudicator consequently found it highly questionable that the name MR PLASTIC is distinctive of the Complainant specifically.

The dubious distinctive nature of the mark MR PLASTIC is compounded by its inherent descriptive qualities.  A mark which is inherently lacking in distinctiveness such as MR PLASTIC can acquire distinctiveness through extensive use but distinctiveness must be clearly established.  Mere use and a reputation does not equate with distinctiveness.  It must be shown that the use and reputation has in fact brought about a situation where the mark denotes one trader and no other. 

The Adjudicator found that although there have been instances of confusion as a result of the use of the offending domain name, confusion per se does not give rise to an action for passing-off.  It does so only where it is the result of a misrepresentation that the goods which are offered are in someway connected with the Complainant.  Confusion may arise from the mere fact that the parties are conducting the same trade and using descriptive titles of which neither can claim any legitimate monopoly.  Where a trader adopts a descriptive designation as a mark, he must reconcile himself to the fact that a measure of confusion may ensue if other traders use the same descriptive name.  The Adjudicator found that the confusion in the case in question was due to the fact that the Complainant and the Registrant are conducting essentially the same trade and are using largely descriptive names in respect of which neither can claim exclusive rights. 

The Adjudicator held that the Complainant had failed on the evidence to show that the mark MR PLASTIC is distinctive of its business and had failed to show that it had a valid claim of passing-off against the Registrant under the common law. The Complainant had consequently not discharged the onus of showing on a balance of probabilities that it has rights in respect of the mark MR PLASTIC which are enforceable against any third party and in particular against the Registrant.

Furthermore, the Adjudicator found that the evidence shows that the Registrant has been legitimately connected with the trade mark MR PLASTIC for a period of eighteen years. The Registrant has consequently acquired concurrent rights in the name and mark MR PLASTIC.  This is explicitly a circumstance which in terms of Regulation 5(a) indicates that the domain name in dispute is not an abusive registration.

Finally, the Registrant pointed out that the Complainant was in any event prevented on grounds of estoppel or acquiescence from restraining the Registrant from using the MR PLASTIC name after having stood by while the Registrant used it for seventeen years. 

In the circumstances, the Adjudicator refused the dispute. 

This is the first decision handed down in terms of the very recently enacted Alternative Dispute Resolution Regulations in South Africa. The threshold of proof in the case of unregistered trade marks has been set – a Complainant must show not only that it has a reputation in the mark, but also (particularly in the case of a descriptive mark) that its trade mark is distinctive of it and that the Registrant does not have a concurrent claim to the mark.

Megan Reimers
22 June 2007
SPOOR AND FISHER ATTORNEYS

2009-02-09