The Concept of ‘Bad Faith’ in Domain Name Disputes

Owners of similar domain names in the ‘.au’ space sometimes have the option of using the Australian Dispute Resolution Policy (or the auDRP) to resolve their dispute. See our article on FAQs for Domain Name Disputes. In order to be able to use the auDRP successfully, the owner of a prior domain name needs to prove that the domain name was registered or used in ‘bad faith’. The obvious question becomes: what is ‘bad faith’?

Circumstances that constitute evidence of ‘bad faith’

In general, the concept of ‘bad faith’ suggests some sort of improper or dishonest motive, however there is no explicit definition in the auDRP itself. Instead, paragraph 4(b) of the auDRP provides a number of examples of circumstances that can be used as evidence of bad faith –

• the domain name was acquired primarily for the purpose of profit through on-selling etc; or
• the domain was registered in order to prevent the owner of a name or trademark from using that name or mark in a corresponding domain name; or
• the domain name was registered primarily for the purpose of disrupting the business or activities of another person; or
• the domain name is primarily used for the purpose of attracting web traffic through causing confusion or ‘piggy backing’ off the other domain name.

Circumstances that suggest an absence of ‘bad faith’

Paragraph 4(c) of the auDRP provides a number of examples of the circumstances which can show that the domain name has not been registered in bad faith. These are -

• the honest use of the domain name or similar name in connection with an offering of goods or services; or
• the fact that the registrant of the second domain name has been commonly known by the domain name; or
• legitimate, non-commercial or fair use of the domain name, without intent to divert consumers or to tarnish the name or trademark in question.

Bad faith in domain name disputes – a limited concept

The concept of ‘bad faith’ in the auDRP is somewhat limited, and as such, the auDRP is primarily directed at addressing the issue of ‘cybersquatting’ rather than the general trademark infringement. In other words, its objective appears to be to remedy the situation where one trader has consciously tried to profit from another’s failure to register a domain name by capitalising on confusion in the market place.

Traders who don’t satisfy the requirements of the auDRP need to rely on more traditional court proceedings, which may require proof of trademark infringement, passing off or misleading and deceptive conduct.