IP RIGHTS IN THE VIRTUAL WORLD: A business friendly survival article
Updated: Nov 9, 2021
The endorsement of online practices such as e-commerce and digital marketing strategies, brought to light new challenges with regards to the protection of IP such as trademarks and domain names, for entrepreneurs who wish to succeed. Having an online presence on the internet through the creation of websites and e-shops, for an entrepreneur could be a rather difficult task, taken into account that the rules applied online vary significantly compared to the physical market. One of the most important factors when assessing the challenges is that consumers tend to act differently when searching through the internet. Unlike the physical market, consumers are less patient and more demanding since thousands of results appear when searching for a specific need, product or service, from all over the world. In that view, the protection of Intellectual and Industrial Property such as trademarks and in general domain names should evolve and live up to the new reality.
One of the challenges when it comes to the protection of trademarks in the cyberspace is territoriality. In particular, whilst trademark rights are territorial in nature and can be used and enforced within the countries where the rights have been granted, in the virtual world the limitation of territoriality cannot be implemented since the internet has no physical boundaries and is globally accessible.
In practice, issues are raised with regards to territoriality, when it comes to the coexistence of similar or identical trademarks. While in the physical market two similar and or identical trademarks registered in different countries could coexist without misleading the consumers, when on the other hand, the right holders of these trademarks appear on the internet through their online websites, confusion maybe caused easily to the consumers as to the identity of the products and services as well as the origin of them.
In conjunction with that, another challenging issue for enterprises to overcome is the confusion caused by the use of domain names similar or identical to trademarks. Trademark law is somehow inadequate in most countries and fails to keep up with the rapid evolutions of the cyberspace, creating obstacles to trademark proprietors such as traders, producers or entrepreneurs. More specifically, while two similar or identical trademarks could be registered when used in different geographical markets and/or sectors of trade (products and services), domain names are unique and can be registered only from a single proprietor excluding in this way several trademark owners who wish to use their similar or identical logo as a domain name. Such registrations usually fall within the scope of bad faith and unfair competition practices and thus could be invalidated.
Moreover and in that context, another aspect of trademark pirating practices is the well-known Cybersquatting. In particular, cybersquatting refers to the registration, usage, or selling of a domain names that conveys another company's brand or trademark. A different form of it is the so called typosquatting which occurs when individuals register a domain that is only a letter or two different from a popular trademark. Typosquatters depend on the idea that users will make errors when typing a URL into their address, taking advantage of the trademark proprietors who wish to be accurately presented on the internet.
On top of all that, digital marketing tools (such as the use of search engines and the existence of SEO and SEM tools) jeopardize even more the protection of trademarks and domain names, creating imbalance between the two IP rights. While two enterprises stand along in the same physical market, having physical stores, this might not be the case when appearing on the internet. More specifically, consumers in the digital market, most likely use search engines to find goods and services. By typing a specific keyword namely, a trademark or domain name in a search engine, results lead to various sellers around the world and not exclusively to one. Alike the marketing tools used in a physical market, a seller has the ability to buy a keyword to trigger advertisements. This word when typed by the consumer will directly link him to that specific seller’s e-shop while others with the same trademark might appear lower in the search engine’s results and thus never catch the eye of the consumer who might be interested on them too.
Assessing all these different aspects and taking into consideration the various issues arisen daily in commerce, entrepreneurs and traders should follow strategic methods in order to secure their rights. A smart business plan for startups could be formulated by the following simple yet effective steps:
Proceed with the registration of a Domain Name First: Due to the fact that each domain name is unique, one should always check the availability of it through the online search engines before registering the same logo as a trademark. If the domain name is not available or else if it is indeed available but the TDLD (.com, .gr, .shop etc.) is a rather rare one which is not likely for consumers to search it, it is best to consider changing the logo or amending it in order to find the one that serves best the role of identifying the products or services of an entrepreneur.
Learn about dispute resolution procedures: The Internet Corporation for Assigned Names and Numbers (ICANN) has established extrajudicial procedures and systems for the protection of trademarks in case of disputes which take place between a trade mark owner and a domain name registrant who has registered a domain name that infringes the rights of a trade mark owner. Such systems are the Uniform Domain-Name Dispute-Resolution Policy (“UDRP”), the Uniform Rapid Suspension System (“URS”), the Trademark Post-Delegation Dispute Resolution Procedure (“PDDRP”) as well as The Legal Rights Objection (LRO).
Create a smart digital marketing plan: Even though commercial presence and success in the physical market could be time consuming and difficult to reach, for an entrepreneur to maintain and develop his commercial presence, having an online marketing strategy is crucial. As previously stated, competition is more intense on the vast and unlimited internet where each and every business could be found. As a result, besides effective registration of IP, securing a place in the market though advertising is equally important.
To conclude with starting up a business and choosing to expand and flourish in the online market could be more complicated when taking into consideration the legal aspects that come along with it. Choosing a domain name or creating a logo-trademark might seem simple at first. If it is memorable, short, and catchy, it may be a recipe for success. But even if the choices are successful from a marketing standpoint, it may not be the case from a legal perspective. Registering a domain name that is in conflict with a trademark or commercial name puts a registrant at risk of legal proceedings. On the other hand, having a trademark that is not equally available to register as a domain name, can constitute a barrier from a business point of view. That, along with an often, significant investment in developing a website, could lead to the blow of a company. In that view, entrepreneurs and traders should take into consideration not only the economic or commercial aspects of their business but also their legal protection of their rights and act carefully and accordingly to reach success.
About the Author:
Anna Sfetsiou is a Greek lawyer, at the Bar Association of Athens, specialized in IP Law. In 2018 she graduated with honors from the Democritus University of Thrace Law School. Subsequently, in 2019 she obtained an LL.M in European Intellectual Property Law from Stockholm University. She has been actively writing articles with a focus on Intellectual Property law, GDPR legislation and in general commercial law. Nowadays, she is working as a lawyer in HLaw Legal Services.