Yorkshireman Wayne Stephenson hit the news recently after supermarket chain Aldi forced him not only to shut down his website, but to hand over his registered domain ilovealdi.co.uk without compensation. What are the lessons for business owners and site developers?
Wayne Stephenson ran his ilovealdi.co.uk fan site for over a year before he received a 12-page takedown notice from the German-based retailer. Stephenson claimed the site promoted the Aldi brand, highlighted savings, and provided a forum for visitors to share recipes using Aldi’s private brand products. Despite his insistence that the site contained no advertising and was not run for personal gain, UK regulatory body Nominet deemed that the site took unfair advantage of Aldi’s trademark rights by using the company’s name in its URL. The case was settled without legal proceedings.
Trademarked domain name profits
In the mid-90s, astute minded individuals realised that they could register .com domains using the names of big brands, and then sell them on to the relevant company at a considerable premium. Originally named ‘domain poaching’, the process became widely known as cybersquatting in 1999 after the passing of legislation in the USA. Many entrepreneurs saw this as a valid form of virtual real estate investment, with some ‘domainers’ generating total profits exceeding £250m.
As the example of ilovealdi shows, however, it is not just the intentional cybersquatting that is frowned upon; even sites that don’t intend to seek compensation from the trademark owner can find themselves the target of dispute.
The issue is not one of profit, but the protection of the brand itself. Maintaining control of domains related to a trademark is a necessary part of managing brand identity and public perception. Whilst ilovealdi.co.uk was intended to reflect favourably on the brand, it still caused concern for Aldi who had no control over what was posted on a website bearing its name.
Lessons to learn
In 1999, ICANN – the organisation responsible for overseeing and regulating issues relating to the Internet’s domain name system – implemented the Uniform Domain-Name Dispute-Resolution Policy (UDRP) to combat the issues of cybersquatting and trademark infringement. Under UDRP, any person registering a domain must state that they have a valid right to the name and that the registration will not violate the rights of any third party. The terms also require an agreement to participate in arbitration if any third party should make claims of infringement.
For business owners, the lesson is clear – ensure that your trademarks are properly registered, and purchase your desired domains at the earliest opportunity. Should someone poach a domain that gives the impression of being owned by your brand, seek a dispute resolution service in your jurisdiction that can begin the UDRP arbitration process. In most countries the law is on your side, and you should be able to settle the matter out of court.
If you are establishing a new business, remember to research available domains first, as it is unlikely that you will be able to claim the rights to a domain if it was in existence before your brand was trademarked.
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