DOMAIN NAMES AND PASSING OFF

Disputes regarding co.za names are generally handled outside of the courts using the specific Alternative Dispute Resolution (ADR) regulations that exist. Before these regulations were implemented, the thinking was that the best way of handling disputes of this nature was through the law of passing off. It’s therefore interesting that in a recent case the party that was aggrieved by a domain name registration decided to go to the High Court by way of a passing off action.

Fairhaven Country Estate (Pty) Ltd v Shaun Harris had unusual facts. An estate agent registered domain names that incorporated the name of a residential estate called Fairhaven (e.g. www.fairhavenesate.co.za), in the hope that it would help him to get a mandate to sell the properties. He registered these names before the property development company that would take over the estate was even established. The estate agent did eventually get a mandate from the company, and the company then marketed the estate aggressively, using one of the domain names that the estate agent had registered for its website, apparently without realising that he in fact owned it. When the relationship came to an end and the estate agent let it be known that he would transfer the domain names to another estate agency, the property development company went to court.

The court granted an order requiring the estate agent to transfer the names to the company – although there had been no passing off as yet, there was clearly an intention to pass off and, as the web address was an intrinsic part of the company’s identity, confusion was likely. The court was clearly influenced by equitable considerations. Like the fact that the agent had no‘link’ with the domain names, as he had not registered them for his own business but for the sale of someone else’s properties. The fact that the domain names only acquired ‘value’ after the company came into existence and gave the estate agent his mandate. The fact that he had misled the company by not telling it that he owned the domain names, and allowed it to spend a lot of money in building a website around the name.

An interesting case! But use the ADR when you can.

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