By Melissa McGrath, Partner, and Wei Xu, Legal Advisor

Small businesses play a significant role in the Australian economy, providing employment for millions of Australians. In the digital era, online stores generate considerable revenues for small businesses and while it is important for small business to focus on ‘core business’, calling out other traders for sharp business practice or acting in ‘bad faith’ is essential.

In a recent decision (Case No. D2019-2190) made by the Panel of the Uniform Domain Name Dispute Resolution Policy (UDRP) proceeding at the World Intellectual Property Organization Arbitration and Mediation Center, the owner of Australian small business Smoothie Bombs, Nutrition Darling (in the name of its founder Cinzia Cozzolino) was successful against cybersquatter competitor Blender Bombs.

Bad faith Blenders

The domain smoothiebombs.com (Disputed Domain) was registered and used by Blender Bombs, a competitor of Nutrition Darling’s Smoothie Bombs based in the US, to redirect Internet users to its own website. Nutrition Darling’s complaint turned on whether registration and use of the Disputed Domain by Blender Bombs could be considered acts of ‘bad faith’.

The bad faith element arises as the third of three requirements of paragraph 4(a) of the UDRP. The test is two pronged: the complainant must show that the domain name has been both registered and used in bad faith.

The Panel found that Blender Bombs’ intentional steps taken to use the Disputed Domain to capture Internet traffic from Internet users who are looking for the Smoothie Bombs products displayed an act of operating in bad faith. Evidence provided by Smoothie Bombs of actual confusion caused by Blender Bomb’s use of the Disputed Domain among the Smoothie Bombs’ customers further proved that Blender Bombs’ use of the Disputed Domain was in bad faith and that damage would result if that use continued.

The Panel also found that Blender Bombs registered the Disputed Domain in bad faith. It said that given that both parties are competitors selling in the same product category, further convinced the Panel that it is “implausible that the Respondent was unaware of the Complainant when it registered/acquired the domain name…” In light of the above, the Panel finds that the registration and use of the Disputed Domain are both in bad faith.

Takeaways for small business owners for a better protection of their trade marks from cybersquatting.

1. Register your trade marks early.
2. Select a distinctive trade mark rather than a descriptive mark for your business. The more distinctive the mark is, the wider its scope of protection will be. Consult with the legal professionals if you are not sure with the distinctiveness of your trade mark, which is also associated with the registrability of the mark
3. Keep examples as proof of use of your trade mark, including the use of the trade mark on product packaging, demonstration of the trade mark in social media and other promotion/advertising materials and other commercial use proof with clear date indicated.
4. Plan for your international market expansion as early as practicable; take advantage of the six-month priority date of your trade mark application for international trade mark applications.

There are multiple ways to solve a domain name dispute and UDRP proceeding is an efficient way of relatively low legal costs and faster to receive the decision. Seek advice from legal professionals before taking actions to make sure the UDRP proceeding suits your specific situation.