e-business law chpter 6

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BAEB 301 : BASIC LAW FOR E-BUSINESS

CHAPTER 6: TRADEMARK AND CYBERLAW

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Chapter 6: Trademark & Cyberlaw

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Topic Outlines

6.1 Definition of a Trademark

6.1.1 Purpose of a Trademark

6.1.2 Meaning of Goodwill and Reputation

6.2 Protection of a Trademark in Malaysia

6.2.1 The Tort of Passing Off

6.2.2 Registering a Trademark

6.2.3 Grounds For Refusal of Registration

6.3 Advantages of Registration as Protection

6.4 Disadvantages of Registration as Protection

6.5 Marks that Can Be Registered

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Topic Outlines

6.6 Marks that Cannot Be Registered

6.7 Trademarks that Cannot Be Registered

6.8 Dealings and Transfers of Registered Trade marks

6.9 Enforcement of Trademark

6.10 Background to the Internet and Domain Names

6.10.1 Generic Top-Level Domains (gTLDs)

6.10.2 Country-Code Top-Level Domains (ccTLD)

6.10.3 Second Level Domains

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Topic Outlines

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6.11 Resolving Domain Name Disputes

6.11.1 Use of Trademarks as Domain Names by Trademark Owners

6.11.2 Examples of Trademarks Used as Domain Names in Malaysia

6.11.3 Cybersquatting ± Use of Trademark as Domain Name by Non

Trademark Owner 6.11.4 Harm Suffered byTrademark Owners Due To Cybersquatting

6.11.5 Legal Issue at the National Level Caused by Cybersquatting

6.11.6 Legal Issue at the International Level Caused by Cybersquatting

6.11.7 Uniform Dispute Resolution Policy (UDRP)

6.11.8 Arbitration Centres To Resolve Domain Name Ownership




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Learning Outcomes

At the end of this chapter, students should be able to:

Appreciate that fact that due to the exponential growth of the Internet and

online activity, it has raised a number of new regulatory issues and legal

questions.

Understand the law of trademark and how issues regarding its protectioncan arise at the national and international level in the context of doing

business over the internet.

Understand the problem of cyber-squatting and how disputes regarding

domain names involving the use of trademark by non-owners of such

trademarks are resolved at the national and international levels.

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A trade mark is a sign or symbol used by the trademarkowner in his business to distinguish his goods or

services from those of another trader.

A trademark can be in the form of any letter, word or

name. signature, device, brand, heading, label, ticket or any combination thereof

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A trademark owner uses a trademark to:

1. establish a branding of his product or service.

2. To enable his customers to identify and locate his

product or service

3. To enable his customers to distinguish his product or

service from his competitors¶ product or service.4. To generate goodwill and to build a reputation for his

product or service.

6.1.1 Purpose of A Trademark

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6.1.2 Meaning of Goodwill and Reputation

Goodwill : is the force that brings in customer and continued

business. The existence of a goodwill involves trading or

business activity.

Reputation : The existence of reputation associated with aparticular name or trademark does not necessarily involve

any trading or business activity.

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There are two ways a trademark owner can protect histrademark in Malaysia:

1. By registering his trademark with the Registry of

Trademarks; or

2. By bringing an action in the law of tort of passing off.

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The Tort of Passing is committed in several situations:

1. where a person who is NOT the owner of a trademark

uses somebody else¶s trademark on his own goods so

as to mislead and confuse the public/consumer as to the

maker of the goods.

2. where the non-owner of a trademark uses the get-up of

P¶s product on his own goods so as to mislead the public

about the quality of his products being as good as the

trademark owner¶s products.


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3. where the non-owner of a trademark uses the design or

shape of the P¶s product on his own goods so as to

mislead the public about the quality of his products being

as good as the trademark owner¶s products.

4. Where the non-owner of a trademark using the P¶sadvertising theme claims that trademark owner¶s

products are made by him or of the same quality.


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1. Only the owner of the trademark can register the

trademark in order to protect it.

2. The owner can be an individual, company or partnership.

3. Application for trademarks registration may be made

before actual use of the trademark.

6.2.2 Registering a Trademark

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1. A mark will be refused if its use is likely to deceive or cause

confusion or would be contrary to law or morality ±

especially marks that are confusingly similar to a trade

name.

2. if the earlier mark is well-known;

3. If its use would indicate a connection with the proprietor of

the earlier marks;

4. There is a likelihood of confusion; and

5. There is a likelihood of damage to the proprietor of the

earlier mark.

6.2.3 Grounds For Refusal of Registration


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6.3 Advantages of Registration

1. The registered proprietor as owner of the trademark anuse the mark exclusively as his brand name for his goods.

2. A registered trade mark is a personal property. It can be

sold.

3. The protection offered by the registration is applicable to

the whole of the country no matter which state your

business is actually situated

4. He can stop other people from using his trademark as

their trade name for their goods or services by suing for

infringement.5. Ten years protection, renewable every ten years

thereafter.

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6.3 Advantages of Registration

Infringement of a trademark: the unauthorised use of anidentical or a confusingly similar mark in respect of thegoods or services where the public is likely to be confused.

The registered owner of the trademark who discovers

another person is using his trademark or a similar trademark shall lodge an official complaint supported byrelevant documents to the Enforcement Division of theMinistry of Domestic Trade and Consumer Affairs

6.3.1 Meaning of Infringement

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6.4 Disadvantages of Registration

1. Costs and time involved in verifying that the mark can beregistered and will not be rejected by the Registrar of Trademarks.

2. Protection only lasts for 10 years subject to a right of perpetual renewal every 10 years

3. Registration of a mark may be opposed by another personand the applicant may incur extra costs and time indefending his application and at the end of the day he maynot even succeed in registering the mark as his trademark.

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Distinctive trademarks for goods or services in the form of :1. an invented word. E.g. Coca Cola; Pepsi Cola, Sony

2. Name of person/firm/company expressed in a particular

manner. E.g Jimmy Choo, Chanel, IBM

3. The owner¶s own signature or the predecessor¶s signature.4. Words with no reference to character or quality of the

goods or services, not a geographical name or a surname.

E.g. BMW, Mercedes Benz

5. any distinctive mark

6.5 Marks that Can Be Registered as Trademarks

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1. Numbers, letter or full names in plain lettering;2. Names of geographic locations

3. Shapes of the product

4. Words which describe the character or function of the

goods5. Distinctive mark which is contrary to law and offensive; or

identical to earlier registered trade marks or identical to

well-known TM.

6.6 Marks That Cannot Be Registered as Trademarks

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1. Patent, Patented, By Royal Letters Patent2. Registered, Registered Design and Cop

3. His Majesty Yang di-Pertuan Agong

4. Her Majesty Raja Permaisuri Agong

5. The Royal Highness Sultans6. Their Excellencies the Yang di Pertua Negeri

7. Bunga Raya and National Mosque

6.7 Titles that Cannot Be Registered as Trademark

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8. Royal or Imperial Crowns, Arms, Crests, Armorial bearingsor insignia;

9. The Royal Malaysian Army and Royap Malaysian Police;

10. Red Crescent, Geneva Cross in red and Swiss Feral Cross

in white or silver on red ground;11. Words or representations of ASEAN.

6.7 Titles that Cannot Be Registered as Trademark

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1. A proprietor of a registered mark may permit its use by athird party. E.g. licensee.

2. Record on the respective Registers all authorised users of a registered mark.

3. Assignments may also be made ± a copy of the assignmentmust be filed with the registry.

6.8 Dealings and Transfers of A Trademark

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1. Counterfeiting is a criminal offence.

2. Trademark owners may obtain authorisation from the stateto commence criminal proceedings through privatesummons on behalf of the state.

3. Right entry and seizure at the counterfeiter¶s premises.

6.9 Enforcement

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1. A domain name is a unique designation used to identifya particular computer web-server something akin to a

telephone number or postal address.

2. The Internet can perhaps best be described as an

international network of networks.3. Ever computer directly connected to the Internet has a

unique identifying domain name that directly

corresponds to a particular Internet Protocol address

(IP address). E.g. www.IMF.org




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4. The Domain Name System (DNS) allows for twocategories of ³Top-Level Domains´:

(i) Generic Top-Level Domains (gTLDs); and

(ii) Country-code Top-Level Domains (ccTLD).




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Generic Top-Level Domains (gTLDs) where there is no

restriction on the persons who may register names in

them:

.com

.net

.org

.edu (for educational institutions)

.gov (for government use)

.mil (for military use)

.int (for international organizations)

6.10.1 Generic Top-Level Domains (gTLDs)




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6.10.2 Country-Code Top-Level Domains (ccTLD)

Country-Code Top-Level Domains (ccTLD) bear two letter

country codes taken from an International Standard:

³.my´ represents Malaysia,;

³.uk´ represents the United Kingdom;

³.es´ represents Spain;

³.sg´ represents Singapore

³.za´ represents South Africa.

³.au´ represents Australia;³.nz´ represents New Zealand




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In Malaysia, the ccTLD of ³.my´ can be further split into 7

Second-Level domains such as:

³.com.my´;

³.net.my´;

³.org.my´;

³.gov.my´;

³.edu.my´;

³.mil.my´ and ³.name.my´.

About 80% of the ³.my´ domain names are ³.com.my´.

6.10.3 Second-Level Domains




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6.11 Resolving Domain Name Dispute

Topics

A trade mark is a sign or symbol used or proposed to be

used by a trader in his business to distinguish his goods

or services from those of another trader.

The purpose of a trademark is:-

(i) to ensure branding of the trademark owner¶s products

and

(ii) To enable customers to distinguish one product from

another and to choose between competing brands,

returning to those which have given satisfaction andavoiding those which have not.





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Many businesses choose to use their trademarks asdomain names because their customers are already

familiar with such trademarks; for example:

a) Coca Cola;

b) Petronas;c) Avon

d) Airasia

e) Sony

f) Apple

g) Panasonic

h) BMW





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www.airasia.com.my

www.google.com.my

www.yahoo.com.my

www.maybank.com.my www.klmu.edu.my

6.11.2 Examples of Trademarks used as Domain Names in Malaysia




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6.11.3 Cybersquatting± Use of Trademark as Domain Name by Non-Trademark owner

1. Cybersquatting is referred to as the abusive registration

of trademarks as domain names by non-owners of such

trademarks.

2. Since registration of a domain name is on a first-come-first-serve basis the cybersquatter¶s reqistration will

prevent the owner of the trademark from using his trade

mark when registering a domain name.




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Topics

6.11.3 Cybersquatting± Use of Trademark as Domain Name by Non-Trademark owner

3. No two domain names can be identical or confusingly

similar.

4. The motive of such Cybersquatters are profit driven and

by reserving such domain names they wish to later

resell the domain names back to owners of such

trademarks who may have spent millions of dollars

developing the good will of the trademark.




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Topics

6.11.4 Harm Suffered By Trademark Owners Due to Cybersquatting

1. The trademark owner¶s customers will be forced to use

a search engine instead of typing the domain name in

order to get to the company¶s internet site.

2. Using a search engine will inconvenience theconsumers in terms of time and cost, because he may

possibly have to wade through thousands of other

sites to get to the desired site.




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Topics

6.11.4 Harm Suffered by Trademark Owners Due To Cybersquatting

3. The search engine route is likely to bring up many

internet sites of the trademark owner¶s competitors

and the customers originally searching to purchase

the trademark owner¶s products may decide to shift

their purchases to the owner¶s competitors.

4. In the long run the trademark owners will lose many

customers who grow frustrated with their attempt in

gaining access to the trademark owners¶ website.




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Topics

6.11.5 Legal Issue At the National Level Caused by Cybersquatting

Legal Issue: Whether the use or possession of a domain

name including a trademark constitutes infringement?

1. UK High Court answers yes to this issue. Harrods v

Lawrie where the High Court ordered the defendant togive up all claims to the domain names of:

Harrods.com

Harrods.co.uk

Ch 6 d k & C b l




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Topics

6.11.5 Legal Issue At the National Level Caused by Cybersquatting

Legal Issue: Whether the use or possession of a domain

name including a trademark constitutes infringement?

2. Malaysian High Court answers yes to this issue.

Petroliam Nasional Bhd (Petronas) & Ors v Khoo NeeKiong [2003] 4 CLJ 303 where the High Court held the

defendant¶s use of the trade name µPetronas¶ in his

domain name amounts to an infringement of a trademark.

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6.11.6 Legal Issue At the International Level Caused by Cybersquatting

Legal Issue: Between the owner of the domain name and the

owner of the trademark who has better right to own the

domain name containing the trademark?

1. ICANN [the I nternet Corporation for Assigned Names and Numbers] ± is a non-profit corporation that was formed to

assume responsibility for the IP address space allocation,

name system management, and root server system

management functions.

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6.11.6 Legal Issue At the International Level Caused by Cybersquatting

2. ICANN drew up the UDRP Policy to resolve the legal issue

between the owner of the domain name and the

trademark holder.

3. ICANN appointed 5 arbitration centres which use theUDRP Policy to resolve the legal issue in a quick and

inexpensive way





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Topics

What is UDRP? Basically, the set of rules that decides

the legal issue who has the right to a particular domain

name between the domain name owner and the

trademark owner.

The arbitration proceedings to resolve the legal issue aredone over the internet with the trademark owner making

an online complaint with the arbitration centre of his

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Topics

It is fast (usually within a month) and inexpensive.

It is very efficient.

The success rate (80% - 85%) against cybersquatters is

high.






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6.11.8 Five Arbitration Centres to Resolve Domain Name Ownership

a) the World Intellectual Property Organisation (WIPO), basedin Geneva, Switzerland;

b) the National Arbitration Forum (NAF), based in Minneapolis,

Minnesota, US;

c) eResolution, based in Quebec, Canada; andd) the CPR Institute for Dispute Resolution (CPRADR), based

in New York, US.

e) Asian Domain Names Resolution Centres in Hong Kong

and Beijing.

e-business law chpter 6

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