MIXIT.CO.ZA: Dont get mixed up!

The South African Institute of Intellectual Property Law’s Alternative Dispute Resolution Panel recently considered an objection to the domain name mixit.co.za.  The objection was lodged in terms of the Alternative Dispute Resolution Regulations published in terms of the Electronic Communications and Transactions Act 25 of 2002.  The adjudicator ruled that the domain name constituted an “abusive registration” and consequently ordered the transfer of the domain name to the complainant.

Commentary on the decision has created confusion about the effect of the ruling.  This article is intended to address the misconceptions that are apparent from recent articles published on the topic.  The relevant misconceptions are as follows:

• that the date on which the domain name in dispute is registered is not relevant to the determination of a complaint regarding that domain name; and

• that parking a domain name on a pay-per-click website to generate revenue through the use of keywords necessarily amounts to cyber-squatting.

Briefly, the facts were that the complainant, Mxit Lifestyle (Pty) Limited, objected to the registration of the domain name mixit.co.za on the strength of its (the complainant’s) rights acquired through the use of its trade mark MXIT in relation to chat room services.  The complainant registered and used the domain names mxit.co.za and mxit.com for this purpose.  It was part of the complainant’s argument that the mere registration of these domain names and its corporate name and its applications to register MXIT as a trade mark entitled it to a transfer of the domain name in dispute, mixit.co.za.  The complainant’s incorporation as Mxit Lifestyle (Pty) Limited, its registration of the domain names mxit.co.za and mxit.com and its applications to register MXIT predated the registration of the domain name in dispute, but there was no evidence that it had used the trade mark MXIT (and that it had therefore acquired a reputation in the trade mark) prior to the registration of the disputed domain name.  However, for the first 3 years following the registration of the disputed domain name, the disputed domain name had not been used by the registrant.  The first use commenced only after the complainant had already established a reputation in its MXIT trade mark.  In particular, the registrant directed the disputed domain name to a pay-per-click website that included direct references to the complainant’s business through the use of keywords such as “mxit”, “chat” and “messaging”.

Early on in the adjudicator’s ruling, it was correctly pointed out that the mere registration of a company name or domain name or applications for registration of a trade mark, without use thereof, do not confer any rights in a name, trade mark or domain name.  For this reason, it was important for the adjudicator to decide whether or not the complainant was required to show that it had acquired rights in the MXIT trade mark prior to the date of registration of the disputed domain name.  The adjudicator ruled that it was not.  Reliance was placed on Regulation 3(1)(a), which merely requires a complainant to show rights in a mark.  The adjudicator ruled that the date at which the complainant’s rights must exist is the date of the complaint and not the registration date of the disputed domain name.  However, the adjudicator did not rule that the date of registration of a disputed domain name is irrelevant.  In fact, the adjudicator pointed out that it is relevant to questions concerning the registrant’s legitimate interest and his or her bad faith.

The adjudicator concluded that, although the registrant was innocent when he registered the disputed domain name, his subsequent use of the domain name had not been innocent.  The evidence established that the registrant had used the disputed domain name in a manner that was calculated to misappropriate the goodwill that attached to the complainant’s MXIT trade mark.

The outcome of the dispute may have been different if the registrant had used the disputed domain name in relation to a good faith offering of goods or services or in a non-commercial manner.  If this had been the case, the date of registration of the domain name may have proven to be a valid defence.  For this reason, it cannot be said that the date of registration of a disputed domain name is irrelevant.  It also cannot be said that the mere act of parking a domain name for the purpose of generating revenue will always amount to cyber-squatting.

Each case will still have to be decided on its own facts.

Source: Dale Healy
Adams & Adams
27 October 2008

2008-10-30