Complaints in the .co.za name space - no April fools day joke

Cybersquatting as such, is not uncommon in South Africa.  However, until very recently, anybody who wanted to object to a domain name in the .co.za name space, had no option but to institute proceedings in the High Court.

Fortunately, a change in South Africa came about when the Minister of Communications promulgated the much-awaited Alternative Dispute Resolution ("ADR") Regulations on 22 November 2006,1 making it possible to resolve disputes relating to domain names in the .co.za name space.  The regulations were promulgated in terms of the Electronic Communications and Transactions Act No. 25 of 2002 ("the ECT Act").2 The ECT Act makes provision for a .za Domain Authority to be established with the objective of administering the .za TLD of the Internet. 3

The alternative dispute resolution process for .co.za names was brought in line with the existing Uniform Dispute Resolution Policy of ICANN, which has been available for many years for domain names registered in the generic Top Level Domains ("TLDs") and certain country code TLDs.

ADR domain name dispute providers ("ADR providers") were accredited in South Africa and opened their doors for business from 1 April 2007 of which the South African Institute of Intellectual Property Law ("SAIIPL") is one of the accredited ADR providers.4

Although there are a number of other active sub-domains in the .za name space, the regulations only relate to the .co.za domain names.  The domain name regulations promulgated in South Africa are based on those of Nominet in the UK.

The regulations make provisions for complaints to be lodged on the basis that a domain name is “an abusive registration” and/or that it is “an offensive registration”.

An abusive registration is a domain name which was either registered or acquired in a manner which took unfair advantage of, or was unfairly detrimental to, the complainant’s rights or has been used in a manner that takes unfair advantage of, or is unfairly detrimental to, the complainant’s rights.  This type of registration would be the typical scenario of cybersquatting.  Factors which would be taken into account to prove that a domain name is an abusive registration would include evidence that:

• the registrant registered the domain name primarily to sell or transfer the domain name to the complainant or to a competitor for an amount in excess of the registrant’s reasonable out-of-pocket expenses;
• the registrant registered the domain name to block intentionally the registration of the domain name in which the complainant has prior rights;
• the domain name was registered to disrupt unfairly the business of the complainant;
• the registrant registered the domain name to prevent the complainant from exercising his or her rights;
• the registrant provided false or incomplete contact details in the WHOIS database;
• the domain name was registered as a result of the relationship between the complainant and the registrant and the complainant in fact has been using the domain name exclusively and paid for the registration or renewal thereof.

An offensive registration on the other hand is a domain name in which the complainant cannot necessarily establish rights, but the registration of which is contrary to law, contra bonos mores or is likely to give offence to any class of persons.  An offensive registration would include domain names which advocate hatred based on race, ethnicity, gender or religion and/or which constitutes an incitement to cause harm.

The process is, as intended, quick and fairly simple.  A single adjudicator or a panel of 3 adjudicators can be selected for a dispute.  Once the complaint has been submitted to and processed by the ADR provider, the registrant has 20 days within which to lodge its response.  Thereafter the complainant has 5 days to lodge a reply.  Once the pleadings have been sent to the adjudicator, he will have 14 days within which to issue his decision.  Either party will have the right to appeal the decision.  An appeal is only possible to a decision by a single adjudicator, not to a decision of 3 adjudicators.

The regulations also provide that, if legal proceedings are initiated regarding a domain name that is already the subject of a complaint in terms of the ADR Regulations, the adjudicator will suspend the dispute immediately.

From a cost perspective, the fee charged is in line with the fees charged by international ADR service providers and amounts to ZAR10 000 (approximately EUR1 050) in the case of a single adjudicator and ZAR24 000 (approximately EUR2 525) for 3 adjudicators to decide the dispute.

The first dispute in the .co.za name space was lodged with the SAIIPL on 11 April 2007 and the decision published on 7 June 2007.5 The case concerned the domain name registered in the name of Mr Plastic & Mining Promotional Goods CC.  The complainant was Mr Plastic CC.  The complainant was incorporated as Mr Plastic (Pty) Limited in 1976 with it sole shareholder, a Mr Gerry Evans.  In 1986 the entire shareholding was transferred to a Mr Eugene Snyman.  In 1991, the company was converted to a close corporation (a more informal type of company) under the name Mr Plastic CC.  The interest in the close corporation was subsequently sold.  The current sole member of the close corporation is a Mr Melville van Niekerk.

In 1980, Mr Evans commissioned the design of a logo for the complainant.  The logo comprised a cartoon character of a man in dungarees and cap standing on the letters “Mr Plastic”.  The man holds a flag pole with a pennant flying above his head.

The complainant allowed others, including the registrant, to use this logo.  Furthermore, in 1989 the complainant gave permission to the registrant to register the close corporation name Mr Plastic Mining & Promotional Goods CC and in 1991 it gave permission for an unrelated company to be registered under the name Mr Plastic Manufacturing (Pty) Limited.  Further companies or close corporations, having names incorporating “Mr Plastic”, were registered in 1987, 1988, 1989, 1990 and 2000.  The trade mark MR PLASTIC & device and the trading style MR PLASTIC had for several years been used by, inter alia, the complainant, the registrant and other entities trading as Mr Plastic (Natal) CC and Mr Plastic (Cape) CC.  No trade mark was ever registered by the complainant and no details of licensing arrangements with the complainant were submitted as part of the evidence.  Although the complainant granted permission to the registrant to use this name and trading style, at the time when Eugene Snyman was the sole shareholder, but such use has again not been subject to any formal licensing arrangement.

The registrant had used the trade mark MR PLASTIC & device and the trading style MR PLASTIC since 1989. The registrant registered the domain name in question in October 2000 and had used the domain name since then. The domian name resolves to a website at mrplastic.zo.za

The complainant on the other hand had used its name and trade mark MR PLASTIC for some 27 years and had acquired a substantial reputation in the name.  On the other hand, the registrant had used the trade mark and trading style MR PLASTIC for some 18 years.  The mark and name MR PLASTIC was, as mentioned previously, also in use by several other entities in the plastics business.

The complainant was not able to register the domain name , by virtue of the registration of the domain name in dispute.  Furthermore the registrant’s use of the domain name in dispute had given rise to instances of confusion.  The complainant’s complaint was based on the fact that the domain name in question was an “abusive registration”. For the complainant to succeed with its ground of objection, it had to establish that the name MR PLASTIC was distinctive of it.  In the absence of a trade mark being registered and a licence being granted by the registered proprietor, the rights arising under the common law from the use of a mark enure to the benefit of the actual user.  There was nothing in the evidence to show that the registrant and the other entities, Mr Plastic (Natal) CC and Mr Plastic (Cape) CC, had used the names under the supervision or control of the complainant or that the complainant had conducted itself as a licensor.

Accordingly, the adjudicator found that the use of the name MR PLASTIC by third parties had caused the rights in the name MR PLASTIC to be diluted and the adjudicator questioned whether the name MR PLASTIC was still distinctive of the complainant only.  The adjudicator also referred to the lack of inherent distinctiveness in the name.  Weighing up all relevant considerations, the adjudicator held that the complainant had failed, on the evidence, to show that the name or mark MR PLASTIC was distinctive of its business and thus that it had a valid claim of passing-off against the registrant under the South African common law.  The complainant therefore failed to discharge the onus of showing, on a balance of probabilities, that it had rights in respect of the name or mark MR PLASTIC enforceable against any third party and, in particular, against the registrant.

Furthermore, the adjudicator concluded that the fact that the registrant had been commonly known by the name or trading style MR PLASTIC and had been associated with this mark for a period of 18 years, indicated that it had used the name as a concurrent user and had thus acquired concurrent rights in the name and mark MR PLASTIC.  The adjudicator held that the complainant had failed to show that it had established rights in respect of a name or mark identical or similar to the domain name in dispute.  Accordingly, the complaint was dismissed.

Although this case related to concurrent rights in a name and was therefore not a typical cybersquatting case, it has paved the way for a new chapter in domain name cases in South Africa.  The process has proved to be a credible procedure to members of the public, as justice has been swiftly and inexpensively dispensed.  Another 3 cases have already been submitted.

Mariëtte du Plessis

Mariëtte is a partner of Adams & Adams in South Africa and the current President of the SAIIPL

1. The ADR regulations were published in Government Gazette No. 29405 of 22 November 2006.  The full text can be downloaded at http://www.domaindisputes.co.za/content.php?tag=7
2. http://www.internet.org.za/ect_act.html
3. http://www.zadna.org.za
4. http://www.domaindisputes.co.za .  The SAIIPL was established in 1954 and represents over 140 patent attorneys, patent agents, trade mark practitioners and academics who spesialise in the field of intellectual property law.  In South Africa, only adjudicators with more than 10 years of experience in the field of intellectual property law have been appointed as senior adjudicators.  In many instances, the adjudicators have in excess of 20 years of experience in intellectual property law.
5. The full decision can be downloaded at http://www.domaindisputes.co.za/content/php?tag=6

June 2007