Court takes dim view of sweet-toothed cybersquatter

The Federal Court of Australia has issued an injunction in CSR Limited v Resource Capital Australia Pty Limited against a cybersquatter who registered domain names incorporating CSR's trademarks. The court took an unusually censorious view of the cybersquatter and made some interesting recommendations for his future treatment.

Resource Capital Australia (RCA) registered several domain names that incorporated trademarks owned by CSR, a company engaged in the refining and sale of sugar and sugar by-products, and the manufacture and sale of building materials. The evidence indicated that RCA had registered these names and others in order to resell them. CSR commenced proceedings seeking an injunction to restrain RCA and its sole director and secretary, Marcus Boland, from using CSR or CSR SUGAR as part of any domain name.

The court held that the registration of 'csrsugar.com' and 'csrsugar.com.au' was misleading and/or deceptive under Section 52 of the Trade Practices Act. The court also held that Boland was liable under Section 79 of the act as he was knowingly involved in RCA's contravention of Section 52.

However, CSR failed to establish trademark infringement under Section 120 of the Trademarks Act. Although the court noted that CSR's interests in its trademarks were likely to be adversely affected by RCA's conduct, it found that no infringement had taken place or was likely to because neither RCA nor Boland ever had any real intention of using the domain names in relation to goods or services.

The court awarded the injunctive relief and ordered that RCA transfer the domain names to CSR. The court also made it clear that it would have awarded costs against RCA had these been requested, on the grounds that the defence was "frivolous and completely unfounded". Further, the court suggested that in any future dealings, Melbourne IT (the body responsible for domain name registration in Australia) should require a statutory declaration from Boland that he (i) is unaware of any trademark, business or company name identical with or substantially similar to the domain name he seeks to register; and (ii) does not intend to transfer the name to another person.

Cheng Lim (partner) and Marcel Fausten (articled clerk), Mallesons Stephen Jaques, Melbourne