Teak Construction Group Ltd v Payback Limited [2015] NZDNC 1045

[2015] - NZDNC - 1045
Transfer ; Complainant's Rights ; Degree of Name Similarity ; Unfair Registration ; CMD

teakconstructionauckland.co.nz - Transferred - Rights

The complainant carried out an Auckland-based commercial construction business and, along with its predecessor, used the brand TEAK CONSTRUCTION consistently. The respondent was incorporated in 2012 by Geoff Dixon, whose former company was a former client of the complainant. In 2012, Dixon complained to the complainant about water tightness issues with the building that the complainant was contracted to work on. Dixon demanded that the complainant paid for the issue. However, the complainant countered by stating that the original company that Dixon contracted has been liquidated and the existing complainant is a successor of the company. In response, the respondent registered the domain name in 2012 and the website served as a criticism/warning against the complainant. In a later communication, the respondent would not take down the website unless the complainant provided some monetary compensation.

The complainant claimed unregistered rights in TEAK CONSTRUCTION as a result of well-established reputation through use. It also wished to claim under the trade mark that was filed in 2013. The complainant reasserted that the complainant was not the same entity as the one that Dixon had contracted. The complainant made a case to alleviate itself from liability. The complainant alleged that the site that the domain name linked to was designed to cause damage to the complainant in a misleading, unfair and deceptive way. The respondent submitted that it is a classic criticism site that constitutes fair use - it had not been used for commercial purposes and the The espondent is not in trade itself. The domain name was argued not to be identical or similar either, amongst other things. The complainant asserted that the marks are similar. Users are likely to have to go through the website on the domain name in detail to understand the nature of it, leading to initial confusion. The complainant also made the case that criticism sites were not excluded from being unfair - they may be considered fair.

The expert found that the threshold test under para 4.1.1 did not state when the right had to be acquired, so the fact that the rights were after the registration of the domain name did not matter for consideration under this paragraph. The only requirement was that the complaint had to be made in good faith. However, for the finding of an unfair registration under 4.1.2, it would matter. The expert found there was sufficient usage of the mark to satisfy the expert.

The expert considered that it was important to decide first under paragraphs 6.1.1(c) and 6.2 to see if the criticism site would be fair use. The expert found that it did not meet the fair use requirement because the domain name is confusingly similar and the addition of "Auckland" would lead to the incorrect assumption that the site was an Auckland branch of the complainant.

The expert found, in agreement with DRS 474 and cases from other jurisdictions, that criticism can draw attention to the subject of criticism without causing confusion had it chosen a domain name more obvious with its purpose, such as ihatetakeconstruction.co.nz. The use of the disputed domain name seems to suggest that it was chosen to attract readers. Additionally, the paragraph required that the website must solely operate as a criticism site. The expert was not convinced that that was the case here. The clear intention to pay back (in the name of the company) and to use the site as leverage to gain financial compensation from the complainant showed that the site was not solely for criticism purposes.

The expert stated that a balance was needed between the right to protest and the complainant's rights. The respondent ought to make it clear in the domain name that it was a criticism site, which would make it neither similar nor identical to the complainant's mark.

Link to NZLII Decision


DNC news