Bereskin & Parr LLP - Canada
Non-Canadian entities operating in or planning to enter the Canadian market would be well advised to consider acquiring a ‘.ca’ domain name sooner rather than later.
Registering a domain name in the country-code top-level domain ‘.ca’ may not always be a high priority in a brand’s global protection strategy. However, non-Canadian entities operating in or planning to enter the Canadian market would be well advised to consider acquiring a ‘.ca’ domain name sooner rather than later. The intricacies involved in acquiring – and enforcing – these domain names can make delay costly and detrimental.
The Canadian Internet Registration Authority (CIRA) has strict rules governing eligibility to own a ‘.ca’ domain name in the form of the Canadian Presence Requirements (CPRs).
While Canadian individuals and entities can register any available ‘.ca’ domain name without needing to demonstrate prior rights or legitimate interest, the CPRs restrict ownership by non-Canadians to ‘.ca’ domain names which consist of or include the exact word component of a Canadian trademark registration owned by the registrant. Since Canadian trademark registrations generally take at least 18 months to issue, there can be a significant delay from the time that steps are taken to protect rights in Canada and the time at which a non-Canadian can register a ‘.ca’ domain name. Moreover, since the CPRs restrict ownership by non-Canadians to domain names including the exact word component of a registered Canadian mark, even with a trademark registration there continue to be restrictions as to which ‘.ca’ domain names can be acquired. For example, domain names comprising variations, short forms or common misspellings of a registered mark are all prohibited.
As a result of the CPRs, many non-Canadian entities simply do not satisfy the test for ‘.ca’ ownership. This can result in a scenario whereby once the foreign entity does finally turn its mind to the ‘.ca’ extension, or its corresponding Canadian trademark issues to registration, an eligible owner has already swooped in and registered the ‘.ca’ domain name of interest or, worse, a ‘.ca’ domain name that interferes with the foreign entity’s business.
However, even in such circumstances, all is not necessarily lost.
Challenging a ‘.ca’ registration
The Canadian Internet Registration Authority’s Dispute Resolution Policy (CDRP) can be initiated by non-Canadian entities seeking to contest a ‘.ca’ domain name. However, non-Canadian entities face strict eligibility requirements here as well, defined in the CDRP Policy as: “Eligible Complainants. The person initiating a Proceeding (the ‘Complainant’) must, at the time of submitting a complaint (the ‘Complaint’), satisfy the Canadian Presence Requirements for Registrants in respect of the domain name that is the subject of the Proceeding unless the Complaint relates to a trade-mark registered in the Canadian Intellectual Property Office (‘CIPO’) and the Complainant is the owner of the trade-mark.”
As the highlighted wording indicates, the eligibility requirements to commence a CDRP are more lenient than the CPRs relating to ownership of a ‘.ca’ domain name. Non-Canadian entities have room to challenge a ‘.ca’ domain which relates to a Canadian trademark registration which they own and not just one that comprises or includes the exact word component of their Canadian trademark registration. The slightly broader scope afforded by this wording appears to encompass ‘.ca’ domain names comprising a misspelling, minor variant or other small typographic error relating to a Canadian registered trademark. For example, in Google, Inc v Glynis Fraser US company Google, Inc satisfied CDRP eligibility requirements on the basis that the contested domain name ‘froogle.ca’ was related to its Canadian trademark registration for GOOGLE. (At the time of the CDRP complaint, the complainant owned only a pending Canadian trademark application for FROOGLE.) However, potential complainants should be careful since it is unclear to what extent the domain name must relate to the registered trademark and there are no known criteria for determining whether the domain name and registered Canadian trademark are sufficiently related to qualify.
The distinction in the eligibility requirements for ownership of ‘.ca’ domain names versus commencement of a CDRP can lead to the ironic outcome where a foreign entity is eligible to commence a CDRP, but not to directly own the ‘.ca’ domain name which is the subject of a successful complaint. This raises potential issues at the time the domain name is transferred or in selecting the appropriate remedy (transfer versus cancellation of the domain name).
An alternative approach in some cases is for a foreign entity’s related Canadian corporation to lodge the CDRP complaint in order to satisfy the eligibility requirements. Indeed, the CDRP Policy provides that a complainant can rely on acquired or possibly licensed rights.
These include where the registrant’s ‘.ca’ domain name is confusingly similar to a mark in which the complainant had rights before the date on which the domain name was registered and continues to have such rights.
The ‘mark’ here is defined as a trademark – including the word elements of a design mark or a trade name – that has been used in Canada by a person, or the person’s predecessor in title, for the purpose of distinguishing the wares, services or business of that person or predecessor or a licensor of that person or predecessor from the wares, services or business of another person.
In recent CDRP decisions panels have taken a conservative view when complainants have relied on marks that have been licensed or acquired from a non-Canadian owner and have challenged the complainant’s prior common law rights, particularly where it appears that the complainant was established and the trademark rights transferred for the purpose of meeting CDRP eligibility requirements. For example, in Asos Canada Services Ltd v Nexon Media Inc ((2013), 110 CPR (4th) 386), the panel held as follows: “Nor is it correct that the subsequent incorporation in Canada of the Complainant somehow created a retroactive right to claim a right in the .ca domain name. …The Complainant’s incorporation in Canada and subsequent transfers of the rights to the common law trademark…might be interpreted as an attempt to get around a material precondition of the CPR.”
Similarly, in Ebates Canada Inc v Cranhill ((2012), 103 CPR (4th) 398), it was held as follows: “15 Did the Complainant have rights prior to the date of registration of the domain name? … 18 The Complainant relies upon a license from its parent company to back date its rights. The Complainant’s license from its parent company does not endow it with an earlier date of incorporation. It cannot meet the test set out in 4.1(a) of the Policy. To find otherwise would allow an ineligible complainant to proceed by proxy.”
Accordingly, it seems possible that a panel will interpret the above decisions to stand for the principle that common law rights acquired by the complainant from a foreign entity after the date of the contested domain name registration are not a valid basis on which to establish prior rights. Moreover, Ebates has been cited for the proposition that to establish prior rights, the complainant (and by extension its predecessor in title) must also have met the CPRs and thus had rights and eligibility to register the contested ‘.ca’ domain name prior to the domain name registration by the registrant. However, this interpretation seems inconsistent with the CDRP Policy and past CDRP decisions. As CDRP decisions are non-binding, it may not be followed on this point.
Establishing prior rights
Assuming that eligibility requirements to commence a CDRP can be satisfied, the complainant must establish prior rights in Canada to a confusingly similar mark. In the absence of earlier registered rights, the complainant will need to rely on Canadian common law rights which pre-date the registration of the domain name by the respondent in the CDRP. It can be difficult for any complainant – but in particular, non-Canadian complainants – to establish Canadian common law rights through use. The analysis of common law rights would be fact based and depend on the evidence of use and reputation adduced. In Guitar Center, Inc v Pipemi the panel held that the US-based complainant established common law use of its mark GUITAR CENTER in Canada on the basis of evidence showing that:
- it operated numerous retail locations, including many within 100 miles of the Canadian border;
- Canadians regularly visited these locations; and
- the complainant operated a ‘.com’ website accessible to Canadians.
Conversely, in a 2010 CDRP decision the panel held that the complainant did not show sufficient use of the website luxist.com by Canadians prior to registration of the contested domain name ‘luxist.ca’ to establish earlier rights in Canada – despite finding that the respondent in the dispute was likely sufficiently aware of the complainant’s LUXIST mark and brand to infer that the contested domain name was registered in bad faith. Accordingly, even strong brands primarily operating outside of Canada or entirely online may be surprised to find challenges in establishing prior rights in Canada in the context of a CDRP.
Ownership of domain names
Non-Canadian entities thwarted from registering a ‘.ca’ domain name as a result of these territorial restrictions should also be cautioned against simply electing or paying an unrelated Canadian third party to register the ‘.ca’ domain name on its behalf.
First, CIRA has additional registrant rules that clearly prohibit the use of such proxy registrations to meet registrant eligibility requirements.
Moreover, there is the risk that it might cast doubt on the legal ownership of the domain name. In the recent opposition decision in Mapquest, Inc v The Lodging Company Reservations Ltd (2014 TMOB 113) the Opposition Board rejected the opponent’s claim that it had beneficial rights to a domain name comprising the identical word component of the opposed trademark since the domain name had been registered in the name of a different entity – the opponent’s parent company. The practical reality is that entities, for a myriad of reasons (eg, technical, administrative), often elect for third parties to serve as the registrant of record of a domain name, while retaining control as well as beneficial or legal ownership of the domain name.
Interestingly, the distinction between registrant and beneficial owner was recently recognised by the Ontario Superior Court in the 2013 case of Mold.ca Inc v Moldservices.ca Inc, in which the judge ruled that the registrant of a domain name is not automatically or necessarily its legal owner. This decision is also a good example of how in some circumstances, a complainant may have better standing and success in a court action for trademark infringement, passing off or other claims than it would in a CDRP.
With the implementation of Bill C-31 and the expected amendments to Canada’s Trademarks Act it remains to be seen whether the greater ease of obtaining a Canadian trademark registration will make ownership of ‘.ca’ domain names more feasible and also more competitive for non-Canadians.
Sharyn Costin is a partner, lawyer and registered trademark agent with Bereskin & Parr LLP. Her practice focuses on all aspects of brand protection. She has expertise in domestic and international trademark portfolio management, brand clearance, trademark strategy, prosecution and enforcement, as well as new media and domain name matters.