Domain Name Squatters Lose – Again

As any startup company that has built a consumer facing brand will tell you, there are countless names to secure, from choosing a corporate name and registering a trademark, to finding all the right social media account names on Twitter^®, Instagram^®, Snapchat^®, Facebook^®, YouTube^®, and so on.  As basic as it may seem in a Web 2.0 world, a domain name is still a cornerstone of a good online branding strategy.

 

However, registration of a domain name is not always the end of the story. In a recent domain name dispute before the British Columbia International Commercial Arbitration Centre (“BCICAC”), Whatsapp Inc., the owner of the registered Canadian trademark WHATSAPP (registration number TMA838338) and the provider of one of the world’s most popular mobile messaging applications, was able to wrestle the domain name “whatsapp.ca” back from an unaffiliated third party.

 

In December 2012, Whatsapp Inc. obtained trademark registration for WHATSAPP in Canada. In January 2015, the domain name “whatsapp.ca” was registered by a third party (the “Registrant”). Upon discovery of the domain name registration, Whatsapp Inc. sent a cease and desist letter to the Registrant.  In response, the Registrant offered to sell the domain name to Whatsapp Inc. for some amount in excess of the actual cost of registering or acquiring the domain name.  Instead of paying a ransom for the domain name, Whatsapp Inc. proceeded to file a complaint with the BCICAC, seeking a transfer of the domain name from the Registrant to Whatsapp Inc. The Registrant did not respond to the complaint.  Based on the complaint and the evidence submitted by Whatsapp Inc., the presiding BCICAC panel found that the Registrant had no legitimate interest in the domain name, and that Whatsapp Inc. did have common law and statutory rights to the trademark WHATSAPP in Canada.  The presiding BCICAC panel ordered that the domain name be transferred to Whatsapp Inc.

 

The facts leading up to the dispute are not uncommon, and the panel’s decision ultimately reinforces that a Canadian registered trademark holder may have underlying rights in a “.ca” domain name that is the same as or similarly confusing to its Canadian registered trademark (but for the “.ca” extension) and that was registered by a third party in “bad faith”. “Bad faith” can mean that the third party registered the domain name with the intention of selling, renting, or licensing the domain name to a trademark holder or competitor for some amount of profit, or otherwise profiting from unauthorized association with another party’s trademark.  The decision should also serve as a reminder to foreign and domestic corporations large and small that trademark protection and domain name protection often go hand in hand, and that it is never too early to consider brand protection on the Internet.

 

The hurdles to obtaining a “.ca” domain name are generally low. For example, the monetary cost of registering a domain name is typically in the single digit or double digits of dollars in registration or renewal fees a year.  In order to apply for and register a “.ca” domain name, however, a potential registrant would have to establish a Canadian “presence”.

 

For domestic entities, the Canadian “presence” requirement may be satisfied through, for example, citizenship, permanent residency, or incorporation in Canada. For foreign entities that do not have a physical presence in Canada, however, Canadian “presence” may be satisfied by having a trademark or official mark registration in Canada.  In the dispute above, Whatsapp Inc., a U.S. entity, established its Canadian “presence” requirement via its registered Canadian trademark for WHATSAPP.  For foreign entities who may be concerned about the applicability of the Canadian “presence” requirement in “.ca” domain name registrations, the requirement is therefore not as onerous as it may initially seem.

 

For burgeoning entities of a domestic or foreign origin, it is increasingly important to consider domain name protection in tandem with trademark protection, both from a branding and brand protection perspective and a legal cost perspective. The requirements for obtaining “.ca” domain names are not particularly onerous. However, what may be problematic or at least a source of frustration is dealing with a third party who is piggybacking off the goodwill of your brand or is attempting to sell your brand back to you; fortunately, there are options other than paying an exorbitant ransom to a domain squatter.