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Conflicts between trademarks and domains

 

The use of the Internet for marketing and sales of products and services is steadily increasing. The regulation of the Internet by Norwegian law is therefore a topic of increasingly interest in Norway. Problems of importance in this matter are the conflicts between domain names and trademarks. A domain name is the Internet address to a website.

                              

There have been several similar cases ruled by the Norwegian Supreme Court lately. November 10th 2004 the Supreme Court unanimous ruled in a case were the question was a conflict between the registered brand "Volvo" and the owners of a Norwegian website called "www.volvoimport.no". The owner of the website used the site to sell Volvo cars that are imported to Norway. There was no disagreement on the matter of import and sales of the cars. The question in the case was whether the domain name violated the registered trademark, or not.

 

The Supreme Court's decision was based on the law regulating trademarks passed the March 03rd 1961 nr. 4. The question of domain names is not directly regulated in Norwegian law, as the Internet by far wasn't invented when the law was passed. It has until this point been doubt about whether this law can be used on domain names and the Internet. However, the decision does clearly establish that the law regulates domain names as well.

 

The court claimed that the trademark "Volvo" dominated the domain name, and that the word "import" wasn't enough to part the website from the Trademark. The court also established that the trademark "Volvo" qualified for such "Kodak protection" as the brand name law § 6(2) establishes. The "Kodak protection" gives extra protection for well-established brand names.

 

The owner of the website claimed however that the so-called principle of consumption, as written in the first council directive of December 21st 1988, which is about the approach to the member states laws regulating brand names through the EEC agreement, would credit his point of view.

 

The trademark directive article 7:

"Consumption of rights connected to the trademark

1. Trademark name does not give the owner the right to forbid the use of it for products that are brought to purchase in the Community by the owner himself, or by his consent. 

2. Nr. 1 does not apply when the owner has a legitimate reason to resist further commercial use of the products, particularly when the products are changed, or reduced after they were brought into purchase.

 

The Supreme Court acknowledges that this principle has been made a part of Norwegian law without any changes in the trademark law § 4. The court refers to Ot. prp. number 72 (1991- 1992)(a Ot. prp. is a Norwegian preparatory document for a law), and the so called "Paranova" court decision of June 4th 2004 (ref. HR-2004-00981). This decision applied to parallel import of medical products. The parallel importer used the producer's trademark on the packages without consent. I quote from section 64 in the decision; "It has traditionally been a matter of course that the law must be understood with a reservation for consumption of the right to trademarks. This means that an original product, with a protected trademark, can be second time sold under the same brand, when the product is brought into purchase by the trademark owner, or by his consent. A similar regulation of consumption of trademarks is written in the trademark directive article 7, which has been made a part of Norwegian law, without changing the brand name law § 4."

 

During the Paranova case the court asked for an expert opinion from the EFTA court about article 7 in the brand name directive. The EFTA court expresses that the main thing here is the debate on whether to protect trademarks, or the interest of free movement of products. In the "Paranova" decision the Supreme Court says that the national court must do a thorough valuation of the parts interests. The parallel importers interests are being valued first, as he represents the interest of free movement of products. The court means that this interest should give the parallel importer a fair chance to present his products to the audience.

 

Now the trademark law must be interpreted in light of the trademark directive article 7, and it must be interpreted in light of the EF courts decisions. Two decisions from the EF court are brought up as important in this matter.

 

The first one is the so-called "Dior" decision. In this decision the EF court states as a principal rule that the parallel importer can use the brand name in his marketing, on the condition that usual marketing methods are being used.

 

The court refers to the "BMW" decision as well. This decision from the EF court states that brand names can't be used in marketing in a way that falsely gives the impression that there is some kind of cooperative connection between the purchaser and the registered trademark. It's even worse if the commercial gives the impression that the purchaser belongs to the brand name owners company. The court says that this kind of behaviour is disloyal to the trademarks interests, and will contribute to damage the brands value.

 

The Norwegian Supreme Court says on the matter of the "www.volvoimport.no", based on these arguments, that there must be done a thorough valuation between the trademarks legally protected interests, and the importer's legally protected interests in doing import and sale. The Supreme Court mentions three important factors in this valuation. The first one is whether the use of the domain name creates a false impression of a close cooperation between the parts. Secondly whether the use is necessary for to secure an effective, and competitive import. The third factor is whether the use takes unreasonable advantage of the brand name. The court also values whether the domain name has a character that makes it exclusive, and excludes it from the producer, and that can be developed to be a secondary trademark.

 

The court says that car dealerships usually don't have a car brand name in their names. The court sees "Volvo" as the dominating part of the domain name "volvoimport", they therefore mean that the domain name will create expectations to the audience that there is a cooperation between the website and the producer. The court is not convinced by the importers argument that the website clearly says that there is no connection between the website and the Volvo company. You have to enter the website to see this. Then the trademark and its earned good-will already have been used.

 

The Supreme Court doesn't find it necessary to use the brand name in the domain name, as it isn't usual among car dealers to use the name of the cars in their names. The dealers are free to announce in marketing that they sell Volvo. Also on the internett search engines the customers can find the website through the brand name, without it being mentioned in the domain name. The use of the brand name in the domain name will however give the website some free marketing advantages, as the Volvo name already is an established brand.

 

The Supreme Court concludes that the domain name is in conflict with the trademark directive article 7 and the Norwegian brand name law § 4. After this decision it is beyond doubt that the brand name law also regulates domain names on the internett, but the law has to be understood in light of the trademark directive.

 

By Inge Magnus Evja, Student of Law, The University of Oslo