Court cracks down on online infringement

In Castillo v Metal-Locking SAC (Resolution 0358-2007/TPI-INDECOPI, March 15 2007), the Administrative Court has upheld an earlier Trademark Office decision that prohibited the defendant from using a domain name to offer its services or promote its economic activities within Peru. It also prohibited the defendant from using several email addresses.

Francisco Telmo Castillo filed an infringement action against Metal-Locking SAC, arguing that (i) he was the owner of the service mark METALOCK for services in Class 37 of the Nice Classification, and (ii) Metal-Locking SAC was illegally using the service marks METALOCK and METALOCKING (which were also confusingly similar to his registered service mark). In addition, the infringement action stated that Metal-Locking SAC was using the mark METALOCKING in its domain name and email address, and for online advertising. The Trademark Office upheld the complaint and the case went to the Administrative Court.

The court held that the Internet is a space for the promotion and advertising of all types of services and an effective forum for the use of distinctive signs such as marks. Such use has led to a series of conflicts in the IP arena due to the possible risk of consumer confusion. The court commented that such conflicts can arise from the use of a sign that is confusingly similar to a mark belonging to a third party (i) on a website offering products or services, or (ii) in a domain name.

However, the Administrative Court observed that legislation dealing with conflicts arising from the use of marks on the Internet had been passed at neither national nor Andean Community level.

In the case at hand, Castillo argued that his METALOCK mark had been used by Metal-Locking SAC in the domain names www.metalocking.com and www.metalocking.com.pe, which advertised various services in Class 37. This use was carried out in Peru and was directed towards Peruvian consumers; therefore, the court held that the domain names had "commercial effect" in Peru.

The court held that there was a risk of confusion under Article 155(d) of Andean Community Decision 486 on a Common Industrial Property Regime, considering that domain names have a similar function to trademarks in that they provide information regarding the origin of the products or services offered on the related website, thereby allowing the identification of the party operating the site.

The court held that the domain names 'metalocking-peru.com' and 'metalocking.com.pe' were similar to Castillo's registered METALOCK mark. The only slight difference being the 'ing' ending used in the domain names. However, this difference was insufficient to eliminate a likelihood of confusion.

The court also stated that Castillo had provided the court with several advertisements in which Metal-Locking SAC used the email addresses:

• [email protected];
  
  
• [email protected]; and
  
  
• [email protected]

It agreed with Castillo's claim that these email addresses proved that Metal-Locking SAC had used the domain name for business. As the email addresses contained the mark METALOCK in a key position, they could lead to consumer confusion.

The court imposed a fine on Metal-Locking SAC and ordered it to stop using any mark, trade name or domain name that contained the mark METALOCK. It also ordered METAL-LOCKING SAC to cease use of the disputed email addresses.

Gonzalo Ferrero Diez Canseco, Lema Solari & Santiváñez, Lima