Canada: Domain Name Dispute Resolution Under The CDRP – The First Five Years

Article by Antonio Turco, © 2006, Blake, Cassels & Graydon LLP

Originally published in Blakes Bulletin on Intellectual Property, November 2006

CIRA took over responsibility for the dot-ca registry on December 1, 2000. CIRA began development of a dispute resolution policy in 1999. A first draft of the CDRP was posted for public comment in September 2000. A significantly revised draft was posted for further public consultation in September 2001. The final CDRP was posted on November 29, 2001 and was (and is) substantially different from the 2000 draft. While similar in structure to the Uniform Domain Name Dispute Resolution Policy (the UDRP) of the Internet Corporation for Assigned Names and Numbers (ICANN), the final CDRP has some very crucial differences. The CDRP became operative on June 27, 2002.

The purpose of the CDRP is to address instances of bad faith registration in the dot-ca space in relatively inexpensive and quick fashion. Registrants must submit to a Complaint pursuant to the CDRP if an aggrieved trade-mark owner elects to challenge a dot-ca domain name registration. Disputes are also governed by the CIRA Dispute Resolution Rules.

In order to succeed under the CDRP, a complainant must establish three things, on a balance of probabilities: (i) that the registrant’s dot-ca domain name is confusingly similar to a mark in which the complainant had rights prior to date of registration of the domain name and continues to have such rights; (ii) that the registrant registered the domain name in bad faith; and (iii) some evidence that the registrant has no legitimate interest in the domain name.

It is important to remember that, under the CDRP, certain key terms, such as "rights" and "mark", are defined terms. As well, the scope of "bad faith", "confusingly similar", and "legitimate interest" is circumscribed in the CDRP.

Trends

Inconsistency on "confusingly similar". The CDRP defines "confusingly similar" narrowly. A domain name is "confusingly similar" to a mark if it so nearly resembles the mark in appearance, sound or idea suggested by the mark as to be likely to be mistaken for the mark. The language of the test reflects the provisions of the Trade-marks Act governing "prohibited marks", and so differs from the traditional likelihood of confusion test relevant to ordinary trade-marks; resemblance is usually, but not always, narrower than confusion. Although early decisions used a likelihood of confusion test, instead of the resemblance test, an increasing number of recent decisions have adopted the resemblance test. In one case, a panel rendered a decision in which the majority used the likelihood of confusion test, while the dissenting panellist applied the resemblance test. As yet, there is no clear consensus.

Finding Bad Faith. "Bad faith" is narrowly prescribed under the CDRP by an exhaustive list of three factors. A domain name is registered in bad faith if, and only if, at least one of the three following factors is established: (i) that the registrant registered the domain name primarily for the purpose of transferring it to the complainant, or its licensor or licensee, or a competitor thereof, for amount in excess of the registrant’s actual costs in registering the domain name; (ii) that the registrant registered the domain name in order to prevent the complainant, or its licensor or licensee, from registering the domain name, provided that the registrant has engaged in a pattern of registering domain names to prevent others who have rights in marks from registering those marks as domain names; or (iii) that the registrant registered the domain name primarily for the purpose of disrupting the business of the complainant, or its licensor or licensee, who is a competitor of the registrant.

However, many panels have found "bad faith" in circumstances which arguably do not fall within the scope of the factors listed in the CDRP. For example, in one case, the panel ignored the "bad faith" requirement altogether and ordered a transfer on the basis that the domain names were confusingly similar to the complainant’s marks and that the registrant had no legitimate interest in the domain names.

Such cases demonstrate that the narrow limits apparently prescribed by the CDRP regarding "bad faith" are not determinative where the facts of the case demonstrate bad faith in a broader sense.

Competitor. The third factor arises when the registrant registers the domain name primarily for the purpose of disrupting the business of the complainant, or its licensor or licensee, who is a competitor of the registrant. In this factor, the panel must assess not only whether the primary purpose was to disrupt the business of the complainant, but also the relationship between the complainant and the registrant, i.e., whether the registrant is a "competitor" of the complainant.

"Competitor" is not a defined term under the CDRP and has been considered in several decisions, without any consistency. Recent cases have expanded the definition of competitor beyond a traditional commercial competitor or someone who offers goods or services that compete with, or rival, the goods or services offered by the complainant. For example, a recent case found a registrant to be a competitor on the basis that the registrant was competing with the complainant for the attention of persons seeking certain services.

Legitimate Interest. A key difference between the CDRP and the UDRP is that the CDRP provides that, even if the complainant proves confusing similarity and bad faith registration, and produces some evidence that the registrant has no legitimate interest in the domain name, the registrant will nevertheless succeed if the registrant can establish that it has a legitimate interest. In other words, any legitimate interest of the registrant trumps the complainant, even if the registrant registered in bad faith a domain name which is confusingly similar to a mark of a complainant. A panel has yet to render a decision under the CDRP where bad faith and confusing similarity were found, but the legitimate interest of the registrant was used to justify denying the complaint.

Cancellation. In one case, involving the domain name , the domain name was not transferred and instead was cancelled. In this proceeding, although the complainant was successful, the panel found that it was not entitled to a transfer of the registration. The panel found that the domain name was a composite of two well-known marks owned by different entities and, although the complainant had demonstrated that it had rights in one of the marks, it had not shown that it had rights in the other so as to entitle it to the registration at issue.

Bad Faith Complaint. The CDRP allows a registrant to make an allegation that a proceeding under the CDRP was commenced for the purpose of attempting, unfairly and without colour of right, to cancel or obtain a transfer of a registration which is the subject of the complaint. If the registrant is successful in the proceeding, and can establish bad faith on the part of the complainant in commencing the proceeding, a panel may order the complainant to pay to the registrant an amount of up to CAD 5,000. Although several registrants have made allegations of bad faith, to date no panel has made such a finding against a complainant.

As of September 30, 2006, 63 decisions had been rendered pursuant to the CDRP, despite the fact that over 740,000 dot-ca domain names had been registered. This limited volume may suggest that potential complainants view the CDRP as more friendly to registrants than to complainants.

The complainant was successful (or partially successful) in securing transfer of the disputed domain name(s) 73% of the time (46/63). In the majority of those cases (38/46 or 82.6%) no response was filed by the registrant. In the contested cases, the transfer of the domain name was granted 64% of the time (16/25).

Generally, where the registrant failed to file a response, the complainant had an 81.5% success rate (31/38). However, in a little over 18% of the cases, the complainant failed to secure the transfer of the domain name, despite the failure of the registrant to file a response (7/38).

Where a complainant failed to secure the transfer of the domain name, the complainant’s inability to demonstrate bad faith on the part of the registrant was the primary reason for denying the complaint (11/17 or 64.7%). The second most common reason (5/17 or 29.4%) why a domain name was not transferred was that the complainant had failed to demonstrate that it had rights in a mark which would permit it to succeed. In the remaining case mentioned above, the complainant was successful on the complaint, but the domain name was cancelled instead of transferred.

In June 2006, CIRA announced that it intends to undertake a comprehensive review of the CDRP in order to assess and suggest reforms in terms of its fairness, understandability, accessibility and efficiency. The outcome of this review, and the growing body of case law under the CDRP, will determine whether the CDRP will live up to its stated purpose.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.