Trademarks and the Internet: Cybersquatting and bad faith.

April 2021

Nowadays, trademark owners and Internet users are faced with problems such as the misuse of domain names either to boost sales of counterfeit goods, to impersonate the identity of certain well-known trademarks or to carry out any other fraudulent practice.

Cybersquatting or bad faith in the domain name identical or similar to a third party’s trademark is the bad faith registration of domain names, especially well-known trademarks, with the aim of making a profit from their resale.

In this sense, the ICANN, Internet Corporation for Assigned Names and Numbers, established a Uniform Policy for the resolution of domain name conflicts which, although it dates back to 1999, is still a valid tool when this type of conflict arises.

The UDRP defines domain name bad faith in paragraph 4(b), which states that the following shall constitute sufficient evidence of bad faith registration and use of a domain name:

– Circumstances indicating that the primary purpose in registering or acquiring the domain name was to sell, rent or otherwise transfer the domain name registration to the complainant who owns the trademark or service mark or to a competitor of that complainant for more than the documented direct costs directly related to that domain name;

– If the domain name has been registered for the purpose of preventing the owner of the trademark or service mark from reflecting the mark in a particular domain name, provided that you have engaged in such conduct;

– if the primary purpose of registering the domain name was to hinder the business of a competitor; or

– if, in using the domain name, you have intentionally attempted to attract, for commercial gain, Internet users to your website or other online site by creating confusion with the complainant’s mark as to the source, sponsorship, affiliation, or endorsement of your website or other online site or of a product or service on your website or other online site, being the more common cause of confusion.

It is clear that, with the very quick expansion of the Internet since its appearance in the 1990s, domain names have become increasingly important and have acquired greater brand value. Nowadays, if we want to register a trademark at the Spanish Patent and Trademark Office, the European Union Intellectual Property Office, the World Intellectual Property Office or any other registry in the world, it may not be too complicated, as long as the legally established requirements are met, of course. But when we want to create our website, the website of our brand and company, there is the possibility of encountering the problem described above: that our trademark is already registered as a domain name by someone else.

And we may ask, is this legally possible?

It depends. It could be that our trademark is sufficiently distinctive of our products and/or services, and, consequently, of our business origin, therefore, registrable; but, if we have not informed ourselves prior to the application for registration as to whether said name was already occupied in the immense ocean of the web, it is likely that we will have to think of an alternative to the initial domain name we had in mind for our website.

Up to this point, in principle, we would be talking about a small lack of foresight on the part of the trademark owner in first noticing whether the domain name of the trademark he was trying to register was available on the Internet. However, when we talk about cybersquatting, things change, and we are no longer referring to a lack of foresight on the part of the owner, but rather to the concurrence of bad faith on the part of a third party who intends to benefit from our trademark.

That is, someone who has occupied a place on the Internet with the name of our trademark, thus snatching from us the possibility of our domain name being in line with our distinctive sign, knowing that, with this domain name, his website would acquire more visits and, therefore, would obtain greater benefits, since the consumer and visitor to the website could confuse the business origin of this third party who is taking advantage of our trademark with our true business origin.

As always, everything is easier to understand with examples, so, in this case, we will deal with two cases: one in which it was not considered that there was bad faith and another in which there was.

ABSENCE OF BAD FAITH: THE CHAMPAGNE CASE[1]

The Champagne case is based on a trademark infringement action brought by the COMITÉ INTERPROFESIONEL DU VIN DE CHAMPAGNE (hereinafter referred to only as “CHAMPAGNE”) against a company called LA CHAMPANERA COMUNICACIÓN, S.L. which had a website whose domain name was: www.lachampanera.es and used the LA CHAMPANERA logo on the social networks Twitter, Facebook, Pinterest, Google+ (now defunct) and Instagram.

In this case, CHAMPAGNE sought a declaration of an infringement of the Champagne appellation of origin, both for the use of the LA CHAMPANERA logo on the aforementioned social network accounts and for the registration of the domain www.lachampanera.es, and a consequent order to cease using the logo on the social networks and the cancellation of the domain name of the website.

CHAMPAGNE’s grounds were based on the ownership and registration in its favor both in the French Republic and in the Kingdom of Spain, and at Community and international level of the protected designation of origin ‘CHAMPAGNE’ for sparkling wine from that region and produced according to quality and traditional methods. It thus considered that LA CHAMPANERA was making commercial use of that protected geographical sign, taking advantage of the prestige and reputation of the designation of origin itself, imitating or evoking that term and thereby causing confusion or error as to the origin of the goods or services.

The dispute basically revolved around the use in the market of the word LA CHAMPANERA in conjunction with a professional blog where regular posts were made about events and wedding celebrations which, in CHAMPAGNE’s opinion, infringed its trademark rights by taking advantage of the well-known designation of origin.

However, the Madrid Commercial Court No. 6, when examining both distinctive signs, considered that “the evocation against which the PDO is protected does not only refer to the words through which a registered designation may be evoked, but also to any figurative sign that may bring to the consumer’s mind the products covered by the registered designation itself.

(…)

Moreover, there may be evocation even if there is no likelihood of confusion between the products in question, since what matters in particular is that no association of ideas about the origin of the product is created in the mind of the public, and that an operator does not take unfair advantage of the reputation of a protected geographical indication“.

In fact, the aforementioned Court states that, in the evocation trial, the conflicting signs must be assessed comparatively from the phonetic, structural and conceptual points of view, but the similarity of these signs is not essential for the trial to be resolved in a positive sense; in other words, a direct allusion to the appellation of origin is sufficient.

Having said the above, in the disputed case, it was declared that the use by the defendant in its corporate name (which was not challenged nor was its modification or extinction requested) in its commercial activity, advertising, signs, commercial documentation and advertisements, of the term LA CHAMPANERA, as well as in internet domains and social networks, did not infringe the exclusive right to the designation of origin CHAMPAGNE, nor did it evoke such a product with a risk of association or confusion between the products, nor did it take advantage of the unique qualities of that designation recognised by an average European consumer.

This conclusion was due to the fact that the content of the blog LA CHAMPANERA dealt with the preparation and celebration of wedding events, as well as body care and lifestyle issues, thus attracting users interested in such topics. Therefore, the name LA CHAMPANERA would be limited to a specific free information service on the aforementioned topics for users; aspects in which no reference is made at any time to the sparkling drink CHAMPAGNE; nor does it introduce any advertising posts that have to do with this drink.

Moreover, from the aforementioned word, phonetic, structural and conceptual point of view, the controversial term, LA CHAMPANERA, does not even refer to the wine product, but to the container in which the bottle of wine is chilled.

However, the average European consumer, when referring to the website, does not associate the services of the CHAMPANERA with the geographical designation of CHAMPAGNE.

CONCURRENCE OF BAD FAITH: MASTERCHEF CASE[2]

Different was the MASTERCHEF case, in which a businesswoman, whose company was called MASTERCHEFF GALERY COOK, S.L., registered the distinctive sign consisting of the M surrounded by a spiral (the famous logo known from the TV programme Masterchef), and had a website called: www.mastercheff.es; yes, with one “f” too many.

On this website, the defendant sold kitchen products and machinery. Its FACEBOOK profile showed a television set and, as if that were not enough, its GOOGLE advertising indicated that its website was the “OFFICIAL MASTERCHEFF SHOP” (we see the extra “f” again).

The trademark was registered by the defendant for practically all of the same classes for which the Masterchef trademark was registered, claiming ignorance of the programme because “it did not watch TV”; at the very least disconcerting but very enlightening for the Court, given the declared notoriety of the trademarks owned by Masterchef, accredited by the fact that it is broadcast in Prime Time on TVE’s channel 1 and has an audience of close to three million viewers, among many other pieces of evidence provided.

In this regard, the European Union Trademark Court states in this case that the almost identical phonetic or literary element is evident because the only differences are:

– An “f” is added at the end of the word “Masterchef” which, moreover, is irrelevant because it does not alter the pronunciation of the word; and

– The expression “Gallery Cook” is added to the name of the company, which is intended to describe the activity (moreover, the same activity or trade as the TV programme) and which is so indistinctive that it is not even included in the domain name of its website.

And despite the fact that the Respondent defends its lack of knowledge of the programme, even with the coincidences we have just mentioned, it turns out that Masterchef is not only a cooking contest with a high audience, whose identifying signs are well known to consumers, but also that the first edition of the programme ended in July 2013 and the Respondent registered its trademark “MASTERCHEFF” in August 2013.

Thus, and bad faith being understood as “the subjective motivation of the trademark applicant, namely a dishonest intention or other detrimental motive. It implies conduct that departs from commonly accepted principles of ethical behaviour or fair dealing in trade or business“, the Court declares the existence of bad faith in the registration of the trademark and, consequently, in the cybersquatting of the domain name www.mastercheff.es, since it is clear that the relevant public may erroneously believe that the products marketed by the defendant on the said website have the same business origin as the products and services designated by the plaintiff’s trademarks. It should not be forgotten that on its FACEBOOK page a television set appeared, and that on GOOGLE it advertised itself as the official MASTERCHEFF shop.

Therefore, in this case, the cancellation of the domain name was obtained on the grounds of infringement of the trademark rights held by SHINE TV LIMITED, the owner of the MASTERCHEF trademark.

Eduardo Zamora | Sara del Río


[1] Judgment of Madrid Commercial Court no. 6, P.O.: 929/17, dated 11 May 2020.

[2] Judgments of the Commercial Court No. 2 of Alicante, P.O.: 809/2017E, dated 16 October 2018; and STMUE No. 594/19 dated 13 May 2019.