CIRA orders transfer of domain name based on residual goodwill


A Canadian Internet Registration Authority panellist has released a decision under its Domain Name Dispute Resolution Policy (CDRP) ordering the transfer of the domain name '' from Rado Web Solutions Inc to the Simcoe Muskoka District Health Unit (SMDHU).

The SMDHU was the successor to the Muskoka-Parry Sound Health Unit (MPSHU). In March 1998 the MPSHU registered the domain name ''. In March 2005, pursuant to a regulatory change, the MPSHU was dissolved and the responsibilities of the MPSHU were passed to the SMDHU. In March 2006 the registration of '' was discontinued; approximately one month later, Rado registered ''. The SMDHU subsequently discovered that Rado was actually using old webpages created by MPSHU. Rado had added two links: one to a pharmaceutical website and one to a Poland-based travel website. The SMDHU filed a complaint under the CDRP on September 27 2007.

The test for transferring a domain name comprises three parts. The complainant must show that:

  • it had, and continues to have, rights in a mark that is the same or confusingly similar to the domain name which is contested;

  • the domain name was registered in bad faith; and

  • the registrant has no legitimate interest in the contested domain name.

The MPSHU had not registered any trademarks in Canada with respect to the name Muskoka-Parry Sound Health Unit or to the acronym MPSHU. Since the MPSHU was dissolved, the panellist was confronted with the question of whether the SMDHU had rights in the domain name after the dissolution of the MPSHU at the time of registration of '' by the registrant, and after the registration. In order to overcome the apparent lack of rights, the complainant argued that it retained residual goodwill in the MPSHU mark.

The panellist agreed with the SMDHU, finding that the principle of residual goodwill had been accepted in a global domain name dispute. Specifically, where there is a name change (especially one that is mandated by government regulation, as was the case here), a panel may consider the existence of goodwill in assessing the complainant's continued rights in the mark. Based on the existence of the residual goodwill, the panellist concluded that the complainant continued to have rights in the domain name ''.

In finding that the registrant acted in bad faith, the panellist noted that the registrant was using old webpages used by the MPSHU, to which the two links were added. The inference created was that the MPSHU, and by correlation the SMDHU, endorsed the links. The panellist concluded that the use of MPSHU's old webpages was intentionally causing confusion and was clearly intended to disrupt the business of the SMDHU. Further, the panellist concluded that the registrant had no legitimate interest in the domain name, as the disputed name was not the legal name of the registrant, nor the location of the registrant's place of business.

The test having been met, the panellist concluded that the complainant had established that the domain name should be transferred. This case is interesting because a successor in title of a dissolved organization can now claim rights in a non-registered mark based on residual goodwill. It remains to be seen how long this residual goodwill will be deemed to last in each subjective case, but this new principle provides complainants in domain name disputes with a new tool to obtain the transfer of a domain name, even where there are no express rights in a disputed mark.

Steve Seiferling, Osler Hoskin & Harcourt LLP, Ottawa

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