Internet domain names and unfair competition

Published onApril 2016

Is it fair registering your competitor’s domain name?

Let’s hope that among our readers the vast majority already has the answer. Of course not!

At best, registering your competitor’s domain name would be made to disrupt your competitor’s communication. At worst, it would be an attempt to attract internet users to your online location by creating a likelihood of confusion with your competitor’s business. In either case, it would be judged as unfair competition.

Why are we writing this article then? Because it seems the answer is not that obvious to everyone.

By nature, domain names are different from trademarks. A domain name registration is not an industrial property title. A domain name does not constitute an industrial property right (IP right). A domain name is merely a trade name, a name used in the course of trade. It serves as an address for an online business or entity.

Just as any trade names, domain names can be misused in order to create confusion on the part of consumers. Most cases are not easy to solve because unfair competition requires several factors to be examined and accounted for so that a sentence can be reached. You need to assess the seniority of a domain name above the other, you need to assess the imitation of the earlier domain name by the litigious domain name, you need to assess the similarity of the parties’ activities, you need to assess if the earlier domain name is not entirely descriptive, you need to assess if there is or could be a likelihood of confusion for the public, you need to assess if the plaintiff has suffered a damage, and the most difficult part is generally to submit undisputable evidence that the defendant has acted in bad faith when registering a given domain name.

However, in a recent case judged last February by French Highest Civil Court, the facts were quite basic.

A company had registered their competitor’s domain name on the very next day the domain name had lapsed for not being renewed in time. Said domain name was the exact match of their competitor’s name and trade name. Said domain name was distinctive considering the activities of both companies. The activities of both companies were identical. Both companies had businesses in the same neighborhood of the same city. And of course, until then, both companies had different names and trade names.

So there was no reason why such a company would have the smallest interest in registering their competitor’s domain name. Not one. Not one… except acting in bad faith. And this is precisely what the courts decided when heavily sentencing said company.

Internet may seem like a virtual world but you should not do on the internet what you would not dare doing in the “real” course of trade.

© INSCRIPTA