Domain name disputes: procedures and solutions

You found out that someone registered your brand name as a domain, and now they are directing your customers to a competitor’s site, or simply sitting on the domain and waiting for you to pay. This is not a hopeless situation. There is an international procedure in which a case without procedural problems ends, according to WIPO, usually within about two months from receipt of the complaint.

Service page: Digital commerce and AI lawyer: terms, privacy and direct mailing.

What is “domain theft” anyway, and why does it happen?

Cybersquatting (registering a domain in the name of someone else’s brand) is an old business. People who do it rely on the fact that businesses do not always register all the variations of their name: .co.il, .net, .org and similar registrations. Registering the domain costs a few shekels a year, and it can be used as leverage for a “buy-back” for tens of thousands of shekels.

In Israel, such use may infringe a registered trademark (section 1 of the Trade Marks Ordinance [New Version], 5732-1972) or be passing off, even when the mark is not registered. The tort of passing off is set out today in section 1 of the Commercial Torts Law, 5759-1999, which repealed section 59 of the Torts Ordinance.

The first step: a warning letter

Before any legal proceeding, send a warning letter directly to the domain owner. The letter should contain three things: (1) a statement of your right to the name (a trademark, a business name, years of activity); (2) a demand to transfer the domain to you within 14 days; (3) a clear explanation of what will happen if they do not respond: a UDRP proceeding or a claim in court.

The UDRP proceeding: getting a domain back without a court

The UDRP (Uniform Domain Name Dispute Resolution Policy) is a procedure of ICANN (the international body that manages the global domain name registry). The proceeding is conducted before one of the service providers approved by ICANN, including the WIPO (World Intellectual Property Organization) Arbitration and Mediation Center. The Policy applies to domains with generic extensions (such as .com) and to country extensions that have adopted it; for a domain with the .il extension, a separate procedure applies, the IL-DRP of the Israel Internet Association, in which it is enough to prove that the registration or the use was in bad faith.

For the complaint to be accepted, you must prove three things (paragraph 4(a) of the Policy): (1) the domain name is identical or confusingly similar to a mark in which you have rights; (2) the domain owner has no right or legitimate interest in the name; (3) the domain was registered and is being used in bad faith. If the panel accepts the complaint, it orders the transfer of the domain to you or its cancellation (paragraph 4(i)). According to WIPO, a case without procedural problems usually ends within about two months from receipt of the complaint.

The advantage over a claim in Israel: a relatively low cost (the WIPO fee for a case of 1–5 domains before a single panelist is USD 1,500), no need to appear in person in court, and the decision binds domain providers around the world. The disadvantage: a UDRP panel does not award monetary compensation; the remedy is limited to transferring the domain or canceling it.

Do you have a registered trademark? It strengthens every position

The Trade Marks Ordinance [New Version], 5732-1972 gives the owner of a registered trademark direct protection, including against the use of an identical or similar domain. If the domain was registered in your brand name and you own the registered mark, the court can issue an injunction and award compensation (section 59 of the Ordinance); the claim is filed with the Magistrates’ Court or the District Court, depending on its amount (sections 40(1) and 51(a)(2) of the Courts Law [Consolidated Version], 5744-1984).

The registered mark also helps in a UDRP proceeding: proof of registration is direct evidence of your right to the name, and it removes an argument about “prior rights”. If you have no registered mark, an unregistered mark can also support a UDRP complaint, if the rights in it are properly proved.

No registered trademark? You can still sue

Even without official registration, owners of business names with years of use and a reputation can sue for passing off, a tort that protects a name known in the market. The tort of passing off (section 1 of the Commercial Torts Law) requires two elements: (1) your name has acquired a reputation among the public; (2) the defendant’s use of the name may mislead, causing customers to think that it is you or a business connected with you. Proof of damage is not a condition: the court may award compensation of up to NIS 100,000 for each tort without proof of damage (section 13).

To support your position, collect: a logo with the dates of first use, old invoices, correspondence with customers, advertising campaigns, and online posts that mention your name. The better documented the reputation, the stronger the position.

What happens if the domain owner refuses every approach?

If the letter did not help and a UDRP proceeding did not solve it either, you file a claim in court (Magistrates’ or District, depending on the amount of the claim). In the claim you can ask for: a temporary injunction that takes the domain down at the very first stage (even before the main hearing); transfer of the domain to your name; compensation for business damage caused; and an order that the defendant pay legal costs.

To grant a temporary injunction, the court must be persuaded, on the basis of sufficient prima facie evidence, that there is a cause of action and that the relief is necessary (regulation 95(b) of the Civil Procedure Regulations, 5779-2018). It weighs, among other things, the damage that will be caused to each party, whether there is a relief that causes less harm, and the parties’ good faith and whether the applicant delayed (regulation 95(d)).

Settlement: when it is worth it and when it is not

Some domain disputes end in a settlement: the domain owner transfers the name in return for payment. Sometimes this makes economic sense: if the cost of a UDRP proceeding or a claim is higher than the settlement amount, and the domain name is critical for the business, pay and be done with it. But note the danger: paying a “ransom” encourages speculators to come back and register more variations of your name.

The simple rule: a settlement is better if the domain is critical and the cost of the proceeding is high. A claim is better if the domain owner is clearly acting without good faith: the court may order them to pay legal costs, and deter future infringements.