Wednesday, 29 October 2008

Domain name parking...the MXIT decision

In Mxit Lifestyle (Pty) Ltd v Andre Steyn (ZA2008-0020) the alternative dispute resolution body for South African domain names has found (its first decision on the issue) that domain name parking can be an abusive registration. The adjudicator also confirmed that the relevant date for showing rights to a name or mark is the date of the complaint and not the registration date of the disputed domain name. However, whilst the decision is welcome news for brandowners it may be interpreted as a step too far. Our prognosis - with the help of Stephanie Jearey (Bowman Gilfillan):

The Complainant, Mxit Lifestyle (Pty) Ltd (“Mxit”), lodged a dispute against an individual registrant’s (Mr Andre Steyn) domain name mixit.co.za. Mxit is a company which operates a social networking and communication service based on text messages aimed at the youth market claiming 8.7 million users. Mxit is the proprietor of several pending trade mark applications in South Africa and the domain names mxit.co.za and mxit.com which were registered on 9 May and 26 February 2004 respectively. However, the Complainant only began to use its MXIT trademark in May 2005.

The Adjudicator, held that, in regard to establishing rights, the Complainant could not claim trade mark rights (in the sense of an actionable right against third parties) in their pending trade mark applications, company name or domain name per se. However, the uncontested evidence of use of the trade mark between May 2005 and March 2008 was sufficient to establish common law rights in the trade mark MXIT (which was held to be neither a descriptive nor a generic term) and that the relevant date for showing such rights is the date of the complaint and not the registration date of the disputed domain name. The Adjudicator further confirmed that the contested domain name MIXIT.co.za was similar to the Complainant’s trade mark MXIT.

On the question of whether the contested domain name was an abusive registration, the Adjudicator found that disputed domain name is used or has been registered in a way that leads people or business to believe that the domain name was registered to, operated or authorized by or otherwise connect with the Complainant. The adjudicator held that “people will, particularly in view of the similarity between the Disputed Domain Name and the Complainant’s trade mark MXIT and the fact that the Complainant’s trade mark is pronounced and often referred to in writing as “Mixit”, likely believe that the Disputed Domain Name is connected with the Complainant”.

The case is good news for brand owners but does it go too far? Although the factors for what may constitute an abusive domain name in domain name parking situations are usefully set out in the decision, one interpretation of the ruling is that it was primarily the similarity of the trade mark and domain that was sufficient to hold the domain name an abusive registration. It is not clear if and to what extent those factors (eg whether the domain name is an obvious trade mark or whether the landing pages were for competing products etc) were considered in making the finding that “… the Registrant generates revenue from the sponsored links and advertisements that appear on the landing pages and as a consequence of the confusion with Complainant’s trade mark.” This is particularly so because initial conduct of the Registrant in using the keywords “chat”, “messaging” and “Mixit” had ceased and their relevance apparently discarded by the adjudicator, leaving us with a situation where a parked domain name using ordinary terms for search engine optimization eg fashion, clothing, music that are unrelated to the Complainant’s rights give way to finding that the domain name is abusive.

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