A lesson to trade mark owners – beware of cybersquatting competitors

In an increasingly internet-dependent marketplace, trade mark owners need to monitor domain names that are identical or confusingly similar to their trade marks in order to protect their brand. 

Ladbrokes Digital Australia Pty Ltd’s (Ladbrokes) recent experience with one of its competitors, CrownBet Pty Ltd (CrownBet)1, is a reminder to all trade mark owners to be on the lookout for cybersquatting. It is also a lesson to CrownBet that it needs to do a better job of hiding behind other entities to cover its own cybersquatting.

The background to the dispute is that since 2006 Ladbrokes has owned trade mark registrations for BETSTAR and since 2014 has owned the Starbet business name.  So you can imagine its reaction when it noticed that, in late 2017 and early 2018, the four domain names Starbet.com.au, Starbets.com.au, Starsbet.com.au and Starsbets.com.au were registered in the name of Bloomdale Proprietary Limited (Bloomdale) and The Trustee for the Betjam Trust.

You can also imagine its reaction when Ladbrokes sent a cease and desist letter in respect of the domain names and Bloomdale informed Ladbrokes that the Bloomdale did not intend to use STARBET or STARBETS as a trade mark in Australia and that it would be prepared to transfer two domain names to Ladbrokes for $7,000. The demand for money to transfer unused domain names is a classic example of the response of a cybersquatter.  It probably did not assist that Bloomdales company secretary, who was the author of that response, also happened to be the company secretary of CrownBet and that both companies have the same registered address.

Rather than pay the fee, Ladbrokes lodged an application to register STARBETS as a trade mark and lodged a complaint under the .au Dispute Resolution Policy (auDRP) to have the domain names transferred to its control.

Under the auDRP, to succeed, Ladbrokes needed to demonstrate that:

  1. the domain name is identical or confusingly similar to a name, trade mark or service mark in which Ladbroke has rights;
  2. Bloomdale has no rights or legitimate interests in respect of the domain name; and
  3. the domain name has been registered or subsequently used in bad faith. 

Given Ladbrokes’ business name and that Bloomdale had no rights in the domain names, the only real contention was whether the domain names had been used or registered in bad faith.

A domain name is taken to be registered in bad faith if the Respondent registered it:

  1. for the purpose of selling, renting or otherwise transferring for a price in excess of the respondent’s out-of-pocket expenses for the domain name;
  2. to prevent the owner of the trade mark or service mark from reflecting their mark in a corresponding domain name; or
  3. for the purpose of disrupting the business of another person.

Ladbrokes also established that Bloomdale and CrownBet were associated to such an extent that Bloomdale was aware of Ladbrokes or Ladbrokes’ business. The Respondents’ conduct fell directly within all three of the circumstances demonstrating bad faith registration. Consequently, Ladbrokes could establish that the disputed domain names were registered in bad faith.

As a result of all of the above, Ladbrokes was successful in its application to have the disputed domain names transferred to its control.  

The Lesson for Trade Mark Owners

Register your names as trade marks; they can be powerful tools against competitors encroaching on your names. Be vigilant for cyber squatters and if you do adopt a domain name that is similar to your competitors, ensure you have a legitimate interest in the domain name.

If you have an issue with cyber squatters, want to know how to safely adopt a name similar to that of your competitors or have any queries about trade marks and how they can be used to protect your business, call us, we would love to help you.

1Ladbrokes Digital Australia Pty Ltd v Bloomdale Proprietary Limited / Domain Administrator, The Trustee for the Betjam Unit Trust Case No. DAU2018-0011.

Authors

Nicole Murdoch is a Director at Bennett & Philp Lawyers
Shereen Parvez is a Lawyer at Bennett & Philp Lawyers