Transfer or cancellation

Procedure

What is the typical format for a cancellation or transfer action in court litigation (domains registered in either a ccTLD or a gTLD) and through ADR (ccTLD only)?

Court litigation

Domain name disputes (in respect of either ccTLDs or gTLDs) being litigated in the courts are uncommon in Australia, given the expense and time required for an outcome that can usually be achieved more efficiently by ADR. However, if the offender is engaging in a suite of intellectual property infringements or other fraudulent behaviour, launching court proceedings in respect of all such behaviour may be the most appropriate course of action.

Such proceedings are typically commenced in the Federal Court of Australia, the Federal Circuit Court or another court exercising federal jurisdiction on the basis of:

  • trademark infringement (where the complainant has a registered trademark); or
  • misleading or deceptive conduct under the Australian Consumer Law in Schedule 2 of the Competition and Consumer Act 2010 (Cth) (ACL), or the common law tort of passing off (where the trademark in question is not registered).

Under section 120 of the Trade Marks Act 1995 (Cth), a person infringes a registered trademark if they use a trademark as a sign that is substantially identical with, or deceptively similar to, the registered mark, either:

  • in relation to the goods or services in respect of which the trademark is registered, goods or services of the same description, or closely related goods or services; or
  • in relation to unrelated goods or services, but in circumstances where the registered mark is well known in Australia, such that the sign would be likely to be taken as indicating a connection between the unrelated goods or services and the owner of the mark, and such use would be likely to adversely affect the owner’s rights.

Use of words in domain names can be used as a sign and can therefore fall within the ambit of section 120. Previous court decisions have established the following principles in relation to trademark infringement in the context of domain names:

  • the mere registration of a domain name will not constitute trademark infringement;
  • where a registrant registers a domain name solely for the purpose of treating with the owner of the trademark, this is unlikely to constitute infringement, because there are no goods or services being offered to consumers in connection with the trademark;
  • where a domain name is being used to conduct a website which sells goods or services directly, this is likely to constitute trademark infringement; and
  • where a domain name is used to attract customers to a website offering goods or services, this can constitute infringement (even if the registrant of the domain name in question does not themselves sell the goods or services).

Under section 18 of the ACL (Schedule 2 of the Competition and Consumer Act 2010 (Cth)), a person must not, in trade or commerce, engage in conduct that is misleading or deceptive or is likely to mislead or deceive consumers. Section 29 of the ACL provides a similar prohibition against misleading or deceptive conduct specifically in relation to the supply or use of goods and services, including, for example, against making a false or misleading representation that the person has a sponsorship, approval or affiliation.

These are intentionally broad provisions that have been held to apply in a wide variety of circumstances, including use of misleading domain names (even if the domain name is not actively used, or is used for goods or services unrelated to those of the complainant). The common law tort of passing off operates in a similar manner.

The benefit of the misleading and deceptive conduct provisions and passing off claims is that the complainant need not have a trademark registration: instead, they can rely on their common law rights and reputation. The difficulty in establishing these actions is that the complainant must first establish that their own reputation is significant enough to lead to some form of consumer deception or confusion.

The procedural rules governing court proceedings and the specific nature of the proceedings will depend upon the court in which the proceedings are brought, the type of proceedings and the way in which the judge and the parties agree to conduct the matter.

ADR (auDRP)

The auDRP is the .au equivalent of the Uniform Dispute Resolution Policy (UDRP) and provides a cheap, quick and straightforward form of ADR for simple domain name disputes, which is usually preferable to court proceedings.

auDRP proceedings operate in a very similar manner to those conducted under the UDRP, and are administered by a number of independent providers approved by the auDA (the list is available on the auDA website: www.auda.org.au/policy/audrp) who appoint their own panellists.

The complainant initiates proceedings by filing a complaint with any one of the approved providers, specifying details such as:

  • the domain name(s) that is (are) the subject of the complaint;
  • details of the registrant and registrar;
  • the trademark or service mark upon which the complainant relies and the goods or services, if any, on which the mark is used;
  • the grounds on which the complaint is made;
  • the remedies sought; and
  • any other legal proceedings in connection with the same domain name(s).

Once the provider has reviewed the complaint, unless it is not compliant, it will notify the respondent and provide an opportunity for the respondent to respond within 20 days of notification of the complaint. There is no obligation on the respondent to file a response, but if they do not, the panellist(s) will typically decide the complaint on the basis of the information provided by the complainant. The panel may request or permit the parties to provide additional statements or documents and may, in exceptional circumstances, request an in-person hearing (www.auda.org.au/policies/index-of-published-policies/2016/2016-01/).

Choosing a forum

What are the pros and cons of litigation and ADR in domain name disputes? What are the pros and cons of choosing a local forum to litigate a gTLD dispute compared with the ICANN ADR format for the gTLD?

Litigation

As with any court proceedings, litigating a domain name dispute is an expensive and time-consuming process, and is unlikely to be preferable to ADR in respect of simple, straightforward domain name disputes.

Courts may be more appropriate forums where:

  • the complainant seeks additional remedies not available through the auDRP, such as damages, costs or an injunction against future conduct (for example, in relation to variants on the same domain name);
  • the domain name holder is engaging in conduct, in addition to the domain name registration, that the complainant also seeks to prevent;
  • the domain name holder is operating a business or selling a product corresponding with the domain name, meaning the court will be required to weigh up competing rights and consider the evidence of both parties; or
  • where the dispute arises as a result of a contractual transfer or assignment of a domain name.

ADR

In the majority of instances, ADR offers greater flexibility, at a lower price (often only a few thousand dollars), when compared to litigation. The parties are not required to abide by the stringent rules of evidence that apply in the courts, are not required to present extensive submissions and can achieve an outcome relatively quickly.

Depending on the domain name in question, there are a number of available ADR forums: the UDRP for all gTLDs, the auDRP (for .au ccTLDs) or the Uniform Rapid Suspension System (URS) for the new domain gTLDs introduced by ICANN since 2012. The URS is now also subject to the additional requirements of the Temporary Specification for gTLD Registration Data, adopted by ICANN in 2018 in order for it to comply with the General Data Protection Regulation (GDPR) in the European Union (EU) (https://www.icann.org/resources/pages/gtld-registration-data-specs-en). It is not possible to use the auDRP for gTLD disputes, as this forum is restricted to .au domain names.

ADR methods are likely to be appropriate if:

  • the complainant has registered trademark rights, or can substantiate a reputation in a mark that would ground a claim of misleading or deceptive conduct or passing off;
  • it is a clear case of bad faith or use for an improper purpose;
  • the holder has no obvious rights in the domain name; or
  • the holder does not fulfil the eligibility criteria for holding an .au domain.

ADR is unlikely to be well-suited to resolving more complex commercial disputes, in which a complainant may be willing to bear the greater costs and time required to engage in litigation in order to better assert their rights.

Appeal

What avenues of appeal are available?

There is no right of appeal under the auDRP proceedings: the panellists’ decision is final and binding on both parties. The registrar of the domain name is required to implement the panellists’ decision to cancel or transfer the domain name. If the unsuccessful party is dissatisfied with the result of the proceedings, they may choose to initiate court proceedings, and for this reason the registrar is required to wait 10 business days before taking the relevant action to allow time for the unsuccessful party to commence proceedings.

The auDA typically does not become involved in auDRP proceedings, and will only intervene where there has been a clear and substantive procedural flaw in the way the proceedings were administered by the auDRP provider (www.auda.org.au/policies/index-of-published-policies/2016/2016-01/).

The unsuccessful party in court proceedings may appeal the decision to a superior court, such as the Full Court of the Federal Court of Australia. This right of appeal is limited to questions of law, and the appeal court will typically not consider any new evidence not presented in the first-instance proceedings. For an appeal to be successful, the court needs to be convinced that the first-instance judge made an error of law of such significance that the decision should be overturned.

Who may claim

Who is entitled to seek a remedy and under what conditions?

Any person or entity may submit a complaint through the auDRP proceedings. The following elements must be satisfied for a complaint to be successful:

  • the domain name is identical or confusingly similar to a name (that is, a company, business or other legal or trading name as registered with the relevant government authority, or the complainant’s personal name), trademark or service mark in which the complainant has rights; and
  • the current registrant has no rights or legitimate interests in respect of the domain name (which is not satisfied merely by fulfilling the relevant eligibility criteria for the domain name); and
  • the domain name has been registered or subsequently used in bad faith.

All three elements must be satisfied for the remedy to be granted.

The auDA has published the following non-exhaustive examples of evidence likely to suggest that the respondent has registered or used a domain name in bad faith:

  • circumstances which suggest that the respondent has registered or acquired the domain name primarily in order to sell, rent or transfer it for a profit;
  • registration of a domain name to prevent the owner of a name, trademark or service mark from registering it;
  • registration of a domain name primarily to disrupt the business or activities or another;
  • using the domain name to attract consumers to a website and create a likelihood of confusion with the complainant’s name or mark to suggest the complainant is the source of, or is otherwise associated with, the goods or services offered on that site; and
  • false or misleading representations or warranties as to eligibility or third-party rights given on domain name application or renewal.

The entitlement to seek a remedy and the conditions under which the remedy may be sought in court proceedings will depend on the type of action being brought. For example, in trademark infringement proceedings, the person or entity entitled to seek a remedy will be the registered owner or the authorised user of the trademark.

Who acts as defendant

Who may act as defendant in an action to cancel or transfer a gTLD in local courts?

Actions are typically brought against the registrant of a gTLD domain name. While there is nothing preventing actions also being brought against the registrar or the auDA, the registrant agreement with the registrar will usually include a disclaimer expressly excluding the registrar from liability, and a clause requiring the registrant to indemnify the registrar against any claims relating to the use of the domain name. The auDA’s mandatory terms and conditions contain similar limitation of liability and indemnity clauses (www.auda.org.au/policies/index-of-published-policies/2008/2008-07/).

Burden of proof

What is the burden of proof to establish infringement and obtain a remedy?

In auDRP proceedings, the complainant bears the onus of proof. The standard of proof under the auDRP is expressed as the ‘balance of probabilities’ or ‘preponderance of the evidence’ standard. Under this standard, the complainant must demonstrate that it is more likely than not that the fact relied upon to make out the ground is true (https://www.auda.org.au/policies/audrp/audrp-overview/). In civil court proceedings, the position is similar, being based on the balance of probabilities. However, the more serious the claim, the higher the strength of evidence required to meet this standard of proof.

Remedies

What remedies are available to a successful party in an infringement action?

The remedies available to the complainant under the auDRP are:

  • to have the domain name licence cancelled, in which case the domain name will become available for registration as normal; or
  • to have the domain name licence transferred to the complainant, which is only available if the registrar determines that the complainant is eligible under the relevant rules (https://www.auda.org.au/assets/pdf/auda-2016-01.pdf).

By contrast, depending on the type of action brought, the relevant court has the power to make a wide variety of orders, including:

  • damages or an account of profits;
  • a mandatory injunction (eg, ordering the cancellation or transfer of the domain name);
  • a prohibitory injunction (eg, preventing the respondent from applying to register variants on the same domain name in the future);
  • costs; and
  • such other orders as the court sees fit.
Injunctive relief

Is injunctive relief available, preliminarily or permanently, and in what circumstances and under what conditions?

When commencing court proceedings, the complainant may request an interlocutory injunction to preserve its position until a final determination has been made. For such an injunction to be granted, the complainant must establish that:

  • there is a serious question to be tried, which means that the complainant must make out a prima facie case; and
  • the balance of convenience favours the making of the order (including that damages will not be an adequate remedy).

The party seeking the injunction will usually be required to give what is referred to as ‘the usual undertaking as to damages’. The effect of this undertaking is that, if the party who sought the injunction is ultimately unsuccessful, they are liable to pay compensation to the other party (or a third party) adversely affected by the operation of the injunction.

At the conclusion of proceedings, the court can also grant permanent injunctions, in the form of either:

  • prohibitory injunctions, which restrain a party from doing a certain infringing act, such as applying for variants on the same domain name in the future; or
  • mandatory injunctions, which compel a party to take a certain action, such as requiring that a domain name registration be cancelled or transferred to the successful party.
Calculating damages

How is monetary relief calculated?

If the complainant is successful in court proceedings, the calculation of monetary relief will depend on the action under which the claim is brought and the complainant’s election.

The different forms of monetary relief include:

  • damages, which are calculated to compensate the complainant for its loss by putting it back into the position it would have been in, but for the defendant’s conduct; or
  • an account of profits, which allows the complainant to recover the profits obtained by the defendant as a result of its offending conduct. This remedy is mutually exclusive with damages, so the complainant must elect which of these two remedies it is pursuing; and
  • in appropriate cases having regard to the specific nature of the defendant’s conduct, additional or punitive damages. These are in the nature of a windfall for the plaintiff, as they are not correlated with the complainant’s loss, but are instead intended to punish the defendant for its conduct and deter similar conduct by others.

No monetary relief is available for successful auDRP complaints.

Criminal remedies

What criminal remedies exist, if any?

There are no criminal remedies for infringing actions in relation to domain names as such. There are a number of criminal offences under the Trade Marks Act 1995 (Cth) in relation to counterfeiting or defacing trademarks (and aiding and abetting the commission of these offences). While unlikely to apply to domain names themselves, these offences may be relevant to the sale of counterfeit goods on websites, for example.

Limitation period

Is there a time frame within which an action must be initiated?

The time frame for commencing any of the civil proceedings discussed in question 11 is six years from the date of the first contravening act. If a complainant becomes aware of an infringement or contravention but does not take action for an unreasonable period of time, the respondent may be able to rely on equitable defences such as laches or estoppel.

For complaints under the auDRP, the doctrine of laches generally does not apply, so delay in bringing a complaint will not, of itself, preclude a complainant from making a complaint. However, delay can be taken into account in appropriate circumstances, such that it may be harder for the complainant to make out all the limbs of its complaint. For example, longstanding use by the respondent may result in it acquiring a legitimate interest in a domain name, even if was originally registered in bad faith (www.auda.org.au/assets/Policies/auDRP/auDRP-Overview/auDRP-Overview-2014b.pdf).

Expiry of rights and estoppel

Can a registrant’s rights in a domain name expire because of non-use. Can a registrant be estopped from bringing an infringement action? In what circumstances?

Registrants are not required to make use of their domain name in order to maintain the registration and it cannot ‘expire’ due to non-use. Failure to make use of a domain name may work against the respondent in auDRP proceedings, as it may indicate that the respondent has no legitimate interest in the domain name, or that it was registered in bad faith.

If a complainant wishes to bring a complaint on the basis of a trademark, it should be aware that trademark registrations are vulnerable to removal from the Trade Marks Register on the basis of non-use if they have been entered on the Register for at least three years, and there has been at least a three-year period of non-use in good faith on the registered goods or services which the owner cannot justify.

As noted in question 21, in the context of court proceedings, if a complainant has been aware of the contravening conduct but has failed to take action for a significant period of time without explanation, they may be taken to have acquiesced to the conduct and may therefore be estopped from bringing an action in respect of it.

Time frame for actions

What is the typical time frame for an infringement action at first instance and on appeal?

ADR proceedings through the auDRP are intended to achieve a speedy resolution, and so will typically be resolved within a couple of months of the complainant submitting the complaint. By contrast, court proceedings can run for several months or even years, depending on the nature of the proceedings in question, the complexity of the matters to be decided, the evidence of the parties, any delays in the timetable, whether there are any cross-claims, whether there are additional interlocutory applications to be decided during the course of the proceedings, and the nature of any appeals.

Case law

Is a case law overview available on procedural or substantive issues? Does the case law have a precedential value?

In 2014, the auDA published the ‘auDRP Overview’, which is intended to provide a guiding resource on substantive and procedural questions that routinely arise in auDRP proceedings, along with references to the relevant panel decisions.

Prior auDRP decisions do not have any formal precedential value; however, panels strive to ensure that decisions are consistent. As a result, panels view previous decisions (especially where there are a large number which reached the same conclusion) as persuasive guides, and thus tend to follow the approach in previous decisions in analogous circumstances. As the auDRP bears a large degree of similarity to the UDRP, UDRP decisions are considered equally relevant where the provision in question is the same as the auDRP.

Courts in Australia are bound by the stare decisis contained in decisions of higher courts in the same judicial hierarchy. While courts are not strictly bound by the decisions of equivalent or lower courts in other jurisdictions, they are encouraged to follow these decisions unless convinced they are plainly wrong. As a result, previous decisions dealing with analogous subject matter and the same points of law, whether procedural or substantive, are usually a reliable indication of how the law is likely to be applied in future cases.

Appointment of panellists

Can parties choose a panellist in an ADR procedure involving a ccTLD? Can they oppose an appointment?

auDA-approved auDRP providers are required to publish a list of panellists and their qualifications. The complainant or respondent may elect to have the complaint heard by either a single panellist or a three-member panel. If both parties agree to have the complaint heard by a single panellist, the panellist will be appointed by the provider from their published list.

If either party elects a three-member panel, both parties must submit three candidates to serve as one of the panellists, to be chosen from the provider’s list. The provider will endeavour to appoint one of each party’s preferred panellists, and will appoint the third panel member at its discretion from its list of panellists.

There is no opportunity for the parties to oppose the appointment of a panellist. However, the panellists should always be impartial and independent, and should disclose any circumstances that could affect their impartiality. If a panellist becomes aware of such circumstances during the course of the proceedings, they should alert the provider, who has discretion to replace this panellist.

If the unsuccessful party is dissatisfied with the procedural aspects of the auDRP proceedings, they can raise their concerns with the provider. As noted in question 13, the auDA does not typically intervene in such situations unless there has been a clear and substantive procedural flaw.

Costs

What is the typical range of costs associated with an infringement action, including pre-litigation procedures, trial or ADR, and appeal? Can these costs be recovered?

auDRP proceedings cost between A$2,000 to A$5,700 depending on the number of disputed domains, and the number of panellists, plus legal fees (which can be substantial, relative to the administrative costs of the process itself). Usually, the complainant is required to pay these fees in full, unless the respondent has elected a three-member panel, in which case the fees are split evenly between the parties. Additional costs associated with the complaint are not recoverable.

Pre-litigation procedures and court proceedings are vastly more expensive, sometimes running into the hundreds of thousands, or even millions of dollars. These costs are often difficult to predict at the outset of a matter and will vary considerably depending on a range of factors, including:

  • whether the parties are willing to negotiate;
  • which court the action is brought in;
  • the nature of the proceedings, and the number and complexity of the issues in contention;
  • the type and quantity of evidence; and
  • whether there are any interlocutory proceedings, whether the matter proceeds to a fully contested trial and whether there is an appeal, or whether the parties agree to a settlement prior to the conclusion of the trial.

If the parties reach a settlement, this will usually include an agreement as to who should bear the costs of the dispute. If the matter proceeds to trial, the court has the power to make costs orders. The general rule is that costs follow the event, meaning that the unsuccessful party will be ordered to pay the successful party’s costs, although the court has discretion to make different orders as necessary. Except in unusual circumstances, costs are rarely ordered on an indemnity basis, meaning that the successful party is usually only able to recover around 40 per cent to 60 per cent of its actual costs.