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Dominant on-line presence

10 May 2016

#Intellectual Property

Dominant on-line presence

 At great expense in developing your website, you have built up a successful on-line presence and your business is growing. Just when you think things are going so well, a competitor appears on the internet and they have almost the same domain name as you and are selling products similar to yours at a fraction of the price. 

What do you do? How could you have prevented this happening?

One of the misconceptions that business owners have is that on registration of a company, business or domain name, they have the exclusive right to use of that name. Unfortunately, this is not the case! Only the registration of a trade mark can afford a business that type of monopoly in the use of a brand name. 

This is because not only are other people able to secure a domain name with a different suffix or a company or business name with some variation, no proprietary rights in the name are acquired on the registration of a company, business or domain name.

In order to secure the exclusive use of such a name, you need to register that name as a “word” or “words” trade mark. 

This statement has to be qualified by the knowledge that the company, business or domain name needs to have some distinctiveness about it and not be generic or descriptive of the goods and services for which it is being registered. For example, the domain name “landscapesupplies.com.au” for a business involved in the retail sale of garden and landscaping materials or “cityflowers.com.au” for a business located in the city selling flowers, are not going to be capable of registration as a trade mark as of right. 

There is a rider to this in that if the trader has a continuous use for a number of years of that name or names to brand their business or products and they have cogent evidence of a longstanding and substantial goodwill and reputation in that name, they may be in a position to register that Common Law trade mark. The Trade Marks Act 1995 allows an exception to the general rule in these circumstances.

If you have a successful business that is using the internet to maximise the sales of your products and you do not have a registered trade mark for the words comprised in your domain name, sooner or later, you are likely to have a competitor who trades off your registered domain name diverting sales from you. 

It is common practice for unscrupulous competitors to import products manufactured for a fraction of the price and sell them on-line using a substantially similar domain name. Even if you have a registered trade mark for the logo under which the products are branded, take the further step to register your word only trade mark.

This will not stop the competitor from taking advantage of the situation but it may help you to stop the competitor from continuing to affect your business. Once you have a registered trade mark of that domain name, you are in a better position to threaten legal action and you may also be able to approach the domain name registry to remove the offending domain name registration because the name is being unlawfully used by the competitor.


Contact Details

Melbourne
Dan Pearce, Partner
T: +61 3 9321 9840
E: dan.pearce@holdingredlich.com

Sydney
Lyn Nicholson, General Counsel
T: +61 2 8083 0463
E: lyn.nicholson@holdingredlich.com

Brisbane
Trent Taylor, Partner
T: +61 7 3135 0668
E:trent.taylor@holdingredlich.com

Disclaimer
The information in this publication is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavour to provide accurate and timely information, we do not guarantee that the information in this newsletter is accurate at the date it is received or that it will continue to be accurate in the future.

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