‘DROP-CATCHING’ DEFENCE TESTED IN SOUTH AFRICAN DOMAIN NAME COMPLAINT

The practice of drop-catching in the South African context (in the .co.za domain name space) was considered for the first time in a dispute concerning the domain name darling.co.za.

So-called “drop-catching” can be described as the automated registration of a domain name that has lapsed due to non-payment of the renewal fee. As a practice, it is neither lawful nor unlawful, as the circumstances of each case will dictate whether the conduct of the registrant of the domain name contravenes the regulations applicable to the dispute.

For instance, drop-catching is not expressly prohibited by WIPO’s UDRP regulations governing domain name disputes in generic Top Level Domains, such as .com. Decisions on the issue of drop-catching in terms of those regulations have been issued in favour of the complainant, but in all the decisions the complainant had established bad faith on the part of the registrant – an absolute requirement in terms of the UDRP regulations.

In terms of the ADR regulations governing disputes in the .co.za name space, bad faith (a subjective element) is not a requirement for a complainant to succeed. Rather, abusiveness is set as a requirement, which is an objective yardstick.

In the case of darling.co.za, the complainant had a registered trade mark for the word DARLING, covering synthetic hair extensions, and had used the domain name darling.co.za for an active website for many years on which it advertised its products. Due to an administrative oversight, it allowed the domain name to lapse. The registrant’s drop-catching software immediately registered the domain name and directed it to a landing page on which it was offered for sale. Before seeking legal advice, the complainant had approached the registrant with an offer to purchase/recover the domain name. The registrant rejected the complainant’s offer and made a counter-offer to sell the domain name to the complainant for a large sum of money – a sum exceeding the costs that the registrant had incurred in acquiring the domain name.

The regulations list a number of factors on which a complainant can rely to establish abusiveness on the part of the registrant. One of those factors is where the registrant acquired the domain name primarily with the view to selling it for a sum on money exceeding its reasonable out-of-pocket expenses directly associated with acquiring or registering the domain name. The registrant’s business model, founded on drop-catching, was to register or acquire domain names that could be exploited in a generic or fair manner. The registrant contended that it could have used the domain name darling.co.za in a geographically descriptive manner and, therefore, that the domain name had not been registered in bad faith. As such, the registrant contended the registration could not be abusive.

The adjudicator ruled that the effect of the domain name registration was abusive of the complainant’s rights, notwithstanding the registrant’s intention (or lack thereof) in registering the domain name. The adjudicator ordered the transfer of the domain name to the complainant.

It appears that the case was ultimately decided with reference to the proviso in Regulation 5(c). In terms of that proviso, where the domain name in dispute is identical to the complaint’s trade mark, the onus is on the registrant to prove that the domain name is not abusive. The adjudicator ruled that the registrant had failed to adduce sufficient evidence to discharge the onus.

Given that drop-catching will very often involve a domain name which is identical to a registered trade mark, the proviso to Regulation 5(c) is likely to come to the fore in such cases.

DALE HEALY

Partner
Trade Mark Attorney

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KAREEMA SHAIK

Senior Associate
Trade Mark Attorney

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