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trademarks and intellectual property in domain names

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Hi all,

This is my first post so apologies if i'm breaking any forum rules or if I am bringing up an old subject.

I am after a bit of advice regarding trademarks in domain names. I work for a specialist sports shop selling racket sports equipment. We registered a domain name which included a well known rackets sports manufacturer in followed by 'shop.co.uk'. We were not cybersquatting or parking the domain, and on the site we sold nothing but the manufacturer's products - we did not sell anyone else's products.

We launched the site back in September 2008 and notified the manufacturer in question around the same time. At the time the manufacturer did not object to us using their trademark in our domain. In fact they added a link from their website to ours! However recently they have told us we are no longer allowed to use the domain and are demanding that we give up the domain, saying that we have breached contract and they will stop supplying us as a result of the alleged breach of contract.

Obviously we do not want to give up the domain as we have spent a lot of time and effort promoting it and we feel it is unfair for them to turn around and say we cannot use it after a knowing we had it for over a year!

They recently took a company in the Netherlands to court in a very similar case and lost. They then took it to the court of appeal and lost again. Finally settling outside of court. Their solicitors are claiming that if that case was brought before a UK court they would have won. But still as far as I am aware for a company to claim a passing off action they have to prove damages, and obviously by just selling their products, like we are licensed by them to do, there can be no damages?!

We are only a small company and cannot afford to go to court and are generally worried about losing our contract with the manufacturer, as we do most of our business with them.

Does any one have any advice or can recommend any solicitors specialising in domain names in the midlands area?

Thanks in advance.
 
(IANAL)

My advice, if you dont want to lose the contract with them, register / buy 'racketsdirect' / 'racketshop' or something similar, 301 your exiting domain to the new domain, then focus on SEO for their brand keywords.

Spending the money you'd spend on solicitors on content and link building will give better ROI.

You might win the trademark case but still lose your supplier, which is still a loss. Tell the manufacturer that you will stop using the domain, but can't give it up because of existing links and traffic.
 
Also worth remembering that Nominet DRS and a trade mark infringement case are two different things.
 
(IANAL)

My advice, if you dont want to lose the contract with them, register / buy 'racketsdirect' / 'racketshop' or something similar, 301 your exiting domain to the new domain, then focus on SEO for their brand keywords.

Spending the money you'd spend on solicitors on content and link building will give better ROI.

You might win the trademark case but still lose your supplier, which is still a loss. Tell the manufacturer that you will stop using the domain, but can't give it up because of existing links and traffic.

Excellent advice.
 
Assuming that they have previously granted you permission, your post gives every indication you would win a case…? But as previously stated they may well stop supplying you?

Did they give any reason for the u turn you really need to know why? This could happen with any site you have that has there product on it…? Ask them it may also help with stop future misunderstanding. (you need to know were you stand regarding any future site)

Having had a similar situation (without TM)it boiled down to they were peeved off with the site listing higher than there own and basically any future site that listed higher would also receive same treatment…
 
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There is a lesson to be learned here, in that whilst it seemed a ok at the time, the inclusion of another companys' name in a domain name is never going to be a good idea. Yes, your relationship with them might seem strong at the time, but circumstances can change, and you end up with your fingers burnt.

You have to remember that they have a duty to themselves to be seen to uphold their trademark rights, otherwise they could lose them. Who is to say that your site was not mentioned in the other case, unknown to you.

I know this will sound harsh, but from a business perspective, you have been quite naive. I wouldn't say you've been passing off, but I can't see how you have not been trading off their trademark, you must see that, surely? Put it down to experience, hand it over for free (don't 301 it), and maintain a healthy relationship with your supplier.
 
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You may find the recent DRS decision on HeritageBathrooms.co.uk of interest. I can't link to it directly but if you click on this:

Decisions Search

then select 'domain name' and put 'heritagebathrooms.co.uk' in the box and search for it, you will be able to download the PDF.

This DRS deals with a case whereby a company has said "it's OK to use our TM in your domain name" and then later changed their mind.

Obviously each case is taken on its own merits but the expert talks at length about whether or not the DRS should be used to settle what could boil down to a contractual dispute. In this case he takes no action and suggests the whole thing would be better dealt with in court.
 
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Try and negotiate with them, in the interest of maintaining your business relationship suggest that you are perfectly willing to transfer the domain to the, but you would like a short period to transfer your website to another domain name. This is a pretty reasonable request and then 301 it for a month or so the search engines clock the change and most visitors will have been back and then hand it over.

Your issue isn't win or lose the case, its keep or lose the supplier which on balance is likely to be worth more to you than the domain.
 
(IANAL)

My advice, if you dont want to lose the contract with them, register / buy 'racketsdirect' / 'racketshop' or something similar, 301 your exiting domain to the new domain, then focus on SEO for their brand keywords.

Spending the money you'd spend on solicitors on content and link building will give better ROI.

You might win the trademark case but still lose your supplier, which is still a loss. Tell the manufacturer that you will stop using the domain, but can't give it up because of existing links and traffic.

Agreed, good advice. There's no point losing an important supplier over this, just switch over to a generic domain and learn how to promote a website without using someone else's brand name in your domain.

Rgds
 
An interesting case. Presumably hanging onto the domain is not worth more than the prospect of their refusing to supply you. After all you won't be able to sell any of the goods on the website without their supply. So legal action is not an option for you because even if you win, they will just cut you off and the domain will be useless to you.

Like the other posters said, you need to get a generic domain. If you can forward the old domain to the new, great. Otherwise, tough, they have the final say as they can cut the supply off.

So, I would keep things friendly with them and tell them I respect their need to protect their trademark usage (see it from their prespective) and agree to transfer the domain to them, but point out the following:

1 you are a loyal customer
2 you were open about the usage of the domain at every stage
3 you have spent a considerable amount of money on marketing the domain

And so I would ask that in respect of the above would they be kind enough to allow a probationary period of a month while your traffic gets redirected to your new site, after which the domain would be theirs free to use as they choose.

Do keep things friendly - the worst case scenario is that they get the domain (either via legal route or from you voluntarily) and they then cut you off anyway.

Damage limitation to your business - I'd also email all your customers who have bought through the site and tell them you are changing your name to the new site. And I'd start selling other manufacturers' products on the new site too (though not until after the redirect period!), since you would no longer be restricted to that manufacturer only, and in case they stopped supplying you your site could still generate income.
 
Thanks all for your time, and the good advice. Much appreciated.

Did they give any reason for the u turn you really need to know why? This could happen with any site you have that has there product on it…? Ask them it may also help with stop future misunderstanding. (you need to know were you stand regarding any future site)

We rang the manufacturer up and told them we were using the domain - they didn't tell us we couldn't use it and added a link to our site from their own. However, we didn't talk to the MD of the company (who is impossibly difficult to get hold of). I think one of three things happened here:
1. They have been told by their parent company (who actually owns the trademark) that we were not allowed to use the domain.
2. They have been put under pressure from a larger account who doesn't like us using the manufacturer's trademark.
3. The MD of the company was not made aware by his staff at the time that we were using the domain.

I know this will sound harsh, but from a business perspective, you have been quite naive. I wouldn't say you've been passing off, but I can't see how you have not been trading off their trademark, you must see that, surely? Put it down to experience, hand it over for free (don't 301 it), and maintain a healthy relationship with your supplier.

I agree with hindsight we possibly have been a bit naive, our e-commerce is in its infancy, but at the time we did not think trading off their trademark was a problem - as we regularly fill our high street shop with banners and POS material with their trademark on - which they obviously encourage. We also thought there would not be a problem as all products sold through the website were theirs - it’s not like we are taking money off them! They were benefiting from our sales as much, if not more, than we are. They are not retailer and do not sell to the public, so even though their trademark is used in the domain name - the domain name as a whole (Their trademark+'shop.co.uk') is not applicable to them.

You may find the recent DRS decision on HeritageBathrooms.co.uk of interest. I can't link to it directly but if you click on this:

Decisions Search

then select 'domain name' and put 'heritagebathrooms.co.uk' in the box and search for it, you will be able to download the PDF.

This DRS deals with a case whereby a company has said "it's OK to use our TM in your domain name" and then later changed their mind.

Obviously each case is taken on its own merits but the expert talks at length about whether or not the DRS should be used to settle what could boil down to a contractual dispute. In this case he takes no action and suggests the whole thing would be better dealt with in court.

Thanks for pointing this case out, it looks very interesting. It looks like the defendant in that case had a written agreement with the trademark holder though - which we don't have, but in our mind the fact that they linked their website to ours as 'an authorised stockist' would demonstrate that we had a verbal conversation with them regarding the domain and that, at the time, they were happy with it.

I had read a similar case on the Nominet DRS regarding Seiko watches. The defendant had Seikoshop.co.uk - however he wasn't selling through his website, but used the domain to promote his high street shop, and the claimant (Seiko) successfully argued that they might not be selling their watches when the customer comes to the defendants shop.

Also there is this case regarding Volvospares.com which went through the WIPO Arbitration and Mediation Center, which seems very similar to our case. The panel concluded that although the defendant knew about the claimant’s trademark, they could not find any evidence that the defendant was misrepresenting the claimant’s trademark and that they had a legitimate business interest with using the domain. WIPO Domain Name Decision: D2008-1860

All that said though, the issue for us is, as you all correctly point out, losing the supplier. Even if we were to win any case brought before the Nominet DRS or other courts, if it results in us losing, or damaging our relationship with the supplier it would obviously not be worth it. If the courts did rule in our favour, I am not sure they can just stop supplying us, as I can’t see how they would prove that we breeched contract. But obviously there is no guarantee that we would win the case, far from it.

Like Jasman, Skinner and Nickynoodles suggest, I think we will write a letter back to their solicitors that we are willing to give up the domain in order to keep our strong business relationship. However, do you think we are pushing our luck to ask for any compensation considering they were fine with the domain for 9 months and knowingly let us spend money developing the site only to now take it away from us? Let’s not forget they were happy enough when the orders were coming in and they were making their money of the site too.
 
However, do you think we are pushing our luck to ask for any compensation considering they were fine with the domain for 9 months

Yes :) .. Ask, as a compromise, that they take control of the domain but redirect all links and traffic to your new site. You'll get out of the Google sandbox quicker using a new domain.

If that's still no go, just hand it over and move on.

racketzone.co.uk is dropping in a week's time btw :)
 
Yes :) .. Ask, as a compromise, that they take control of the domain but redirect all links and traffic to your new site. You'll get out of the Google sandbox quicker using a new domain.

If that's still no go, just hand it over and move on.

Ok, thanks again for the advice.

racketzone.co.uk is dropping in a week's time btw :)

awesome :cool: thanks for the heads up!
 
You never got proper permission to use the domain in the first place. You should have had a signed agreement from someone in the organisation capable of giving permission. So, I don't think asking for compensation would be realistic.

Rgds
 
I agree with hindsight we possibly have been a bit naive, our e-commerce is in its infancy, but at the time we did not think trading off their trademark was a problem - as we regularly fill our high street shop with banners and POS material with their trademark on - which they obviously encourage. We also thought there would not be a problem as all products sold through the website were theirs - it’s not like we are taking money off them! They were benefiting from our sales as much, if not more, than we are. They are not retailer and do not sell to the public, so even though their trademark is used in the domain name - the domain name as a whole (Their trademark+'shop.co.uk') is not applicable to them.

I don't think there is any doubt about your good intentions, and clearly things have worked well until recently. However, the reality is that they've already been through the mill trying to get the other domain name back, and I suspect they've also had to learn quickly from that experience, as you are now. The plain fact is, they are duty bound to protect their IP in all its forms, be that TM or Patent. It just so happens that as they have wised up to this fact, your efforts will be a casualty.
 
Another option is to move the site onto a new domain immediately, and 301 redirect the old domain to it. Then drag the negotiations out a little to give Google enough time to replace the old domain's rankings with the new one's.

Keep all correspondance by letter, not email. If they ask why, say you prefer to keep hard copies for all legal correspondence. Each time you send a letter, and wait for their reply, and then send your reply to that, it's going to be about another week. So if you can drag it out so several letters are exchanged you should get a few weeks while Google realizes the domain forwards to the new site. Even after the domain is in their possession it may take them a while to change the nameservers giving you even more time.

So initially you might send a letter making it clear that you will transfer the domain over to them as you respect their need to protect their TM, but don't give any details other than that. Then wait for reply. You might then reply to their letter saying something like you just need your web designer to download a backup of the website before transferring the domain over and you expect that to be in the next few days. They reply saying whatever. Then you send another letter saying you now have a backup, but ask which email address the domain should be transferred to etc. Eventually, you hand over the domain, but your new site is the one coming up in Google.

This way, instead of asking them if you can have a month to redirect the old domain to the new (to keep the ranking you have built up in the search engines), you effectively take a month - or at least a few weeks anyway. So they don't even get a chance to say 'no'. Don't take the piss dragging it out too much though, you don't want to annoy them and risk being cut off! As in all areas of life, walk a fine line...
 
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