German supermarket chain shuts down


It may have been registered as a fansite, but Aldi has revealed a zero tolerance approach to trademark infringement in its action against The German supermarket chain used WIPO’s UDRP procedure to successfully shut down the site.

Set up on 1 January 2012, the domain name was registered by Chris Huff, an American fan of the German supermarket chain, Aldi. Nonetheless, the company was unhappy with the unauthorised use of its trademark; first contacting Huff to request he cease and desist his use of the site and then, after no response, pursuing the action using the Uniform Dispute Resolution Policy (UDRP) procedure provided by WIPO.

How does the UDRP procedure work?
The UDRP procedure seeks to resolve domain name disputes in a quick and cost-effective way. To act under the policy, three key requirements must be met, namely:

  • The challenged domain name is identical or confusingly similar to the trademark registration;
  • The third party has no legitimate interest in use of the brand; and
  • The domain name was registered in bad faith and is being used in bad faith.

If these requirements are met, the infringer will be ordered to transfer the domain name to the brand owner or to remove the domain name from use.

The Aldi action
On the first point, WIPO’s Administrative Panel agreed that the domain name was very similar to the Aldi brand. It then examined whether the registrant had a legitimate interest in the use of that brand. Huff argued that he had a legitimate interest, in that he had registered the domain name to share his love of Aldi, without any commercial intentions. However, Aldi was able to show that, since the site was registered more than three years ago, it had not been actively used. As a result, the Panel found there to be no legitimate interest in Huff’s use of the brand.

Finally, the Panel considered whether the domain had been registered and used in bad faith. Bad faith can be shown to exist where a registrant has registered or used a domain name with negative intentions; for example, out of malice or in order to piggyback on the success of a brand. In this case, WIPO found that, while Huff had indicated that he wanted to use the site to express his appreciation for Aldi, he had not done so in practice. Passive or lack of use of the website was enough to satisfy the requirement for bad faith, and Huff was ordered to transfer the registration to the supermarket chain.

Implications for your own domain name strategy
Aldi may not have been successful in its action had Huff been actively using the site for his originally stated purpose: as a fansite for the German supermarket chain. As the UDRP requirements make clear, the brand owner has limited power to stop use of its trademarks if a registrant can show there is a valid reason for their registration of the domain name (and that it is not being used in bad faith).

For that reason, it is advisable to register domain names to protect against third-party registration of company or core brand names, including popular variations or misspellings. (Find out more about developing a domain name strategy here.)

Of course, it’s impossible to predict and register every possible variation or typographical error; even if you could, the cost would be prohibitively expensive given the number of domain name extensions now on the market. Here, domain name watching tools, such as Novagraaf’s web-monitoring service NovaTrack, can provide a useful service for monitoring and gathering evidence against infringing use of trademark rights. This evidence will support any action taken through WIPO’s UDRP or equivalent procedure.

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