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Appeal's (COA) judgment in the recent case of Aerotel Ltd v. Telco Holdings ([2006]EWCA Civ 1371) where the COA felt bound by precedent to accept the “technical effect” approach.

TRADEMARK PROTECTION

The growth of domain names, which play an important part in e-commerce, has challenged the boundaries of trademark law as an effective protection mechanism (Yan 2000). Domain names are an extension of the brand value and reputation and it has been propounded that whilst “domain names have great economic value to online business, on the other hand, these names expose three ways in which it puts domain names at risk. In brief, these include a) cybersquatters who occupy a name hoping that a trademark owner will make an offer for it?. b) activists who register confusingly similar domain names? and c) typo-squatters who register domain names incorporating variations of well-known trademarks terms” (Throne & Bennett 1998).

There is currently no separate law governing domain name disputes, which is rooted in the intrinsic difficulty of determining whether domain names are part of intellectual property (Meyer-Rochow 1998). Article 15 of the TRIPS Agreement defines a trademark as “any sign, or any combination of signs, capable of distinguishing the goods and services of one undertaking from those of other undertakings”. This definition is further embodied in section 1(1) of the Trade Marks Act 1994, which also states that a “trade mark may, in particular, consist of words (including personal names) designs, letters, numerals or the shape of goods or their packaging”. Compliance with the legal definition enables registration of the mark, which heightens economic value to the owner and the brand (Bainbridge 2007).

Trademarks are economically important in identifying and differentiating products and services and maintaining brand value and reputation to the consumer (Kerly 2005). However, trademark protection requires distinctiveness, functionality, use and registration. Whilst this is necessary in preventing a punitive market monopoly, it highlights the limitations of trademark protection to cover domain name disputes. Not every domain name will necessarily have trademark protection however the economic damage caused by cybersquatting will arguably still be the same as a domain name protected by trademark registration (Davis 2007).

Furthermore, trademarks are limited geographically and by classification, therefore there are potentially many owners with the same trademark name applied to different classifications (Pullar 1998). However, this sits uneasily with domain name protection as the availability of domain name suffixes are limited, often operating on a “first come, first serve basis” (Throne & Bennett 1998), thereby causing a gap in effective online protection and e-commerce. Moreover, a consumer will always assume the domain name has an identifying function (Kerly 2005) and if someone registers the domain name first, it could potentially dilute the brand value if registered in respect of a different field (Kerly 2005). For example, the case of Prince plc v Prince Sports Group Inc ([1998] FSR 21) highlights the online domain name registration system as operating on a first come first served basis.

Conversely, not all business names satisfy the requirements for trademark registration and may legitimately register a domain name in order to grow their