Trade mark infringement is a trump card when it comes to domain name choice. No matter how many good reasons you have for choosing a particular domain name, if the domain name infringes someone else's trade mark, you should steer well clear.
First and perhaps foremost, trade mark infringement proceedings can swallow an immense amount of time and money. Hundreds, sometimes thousands, of hours of management time are invested in a trade mark dispute fought all the way to a decision. And proceedings can drag on for years. If you want a reasonably experienced legal team fighting your corner in the High Court, then your costs for a full trial may run into hundreds of thousands of pounds. Even an exchange of solicitors' letters can cost thousands for each party.
Second, if you lose in court, you'll be faced with paying damages, handing over the domain name, possibly changing your business's name and paying the lion's share of the winning party's legal costs (as well as your own).
Third, if a trade mark does infringe, it's likely that your domain name won't adequately distinguish your website from the website and business of the trade mark owner.
Generic domain names
The risk is greatly lessened if your domain name is "generic", although that word is not used in the legislation. In point of fact, there are no less than four distinct ways in which a trade mark may be considered to be "generic" - and therefore not registrable - under the Trade Marks Act 1994 (the keystone of the UK trade mark regime) . First, a trade mark will not be registrable if it is not capable of distinguishing the goods and services of a business from those of other businesses. Second, a trade mark will not be registrable if it is devoid of any distinctive character. (E.g. a mark consisting of the word TREAT in respect of dessert sauces and syrups was refused registration on this ground.) Third, a trade mark will not be registrable if it consists exclusively of exclusively of signs or indications which may serve, in trade, to designate the kind, quality, quantity, intended purpose, value, geographical origin, the time of production of goods or of rendering of services, or other characteristics of goods or services. (E.g. EXCELLENT FRENCH WINES would not be registrable in relation to wine, whether or not French, and whether or not excellent.) Fourth, a trade mark will not be registrable if it consists exclusively of signs or indications which have become customary in the current language or in the bona fide and established practices of the trade. (E.g. ESCALATOR and LINOLEUM, which started life as brand names.)
However, there is one important caveat to points two, three and four: a trade mark which has acquired a distinctive character as a result of the use made of it may by virtue of that fact be registered.
This caveat aside, if your domain name is generic then you can be reasonably sure that there is little risk of trade mark infringement, because the mark will not be registrable under the trade mark legislation, and its use will not be of the sort liable to give rise to unregistered trade mark rights (as to which, see below).
For the purpose of considering whether a domain name is generic, you need to strip away the non-distinctive elements such as the http://, the www and the domain extension (.com etc). For example, the domain name www.website-law.co.uk(the site on which this post was originally published) is generic when used on a website about the law relating to websites. For this reason, I did not bother with a trade mark search before choosing that domain.
Trade marks searches?
Unless the domain name you have chosen is clearly generic in respect of the use you plan to make of it, you should conduct some trade mark searches before building a business around it. The first stage in any trade mark search is usually a little amateur sleuthing. Start by searching the UK trade mark registry and OHIM for any identical marks, or marks beginning with the same word. Obviously, if you plan to do business outside the UK, you should conduct similar searches in reach relevant jurisdiction. If you are investing a lot of money in the business, you should consider asking a professional search company such as Thomson Compumark to conduct detailed searches. These would usually be done through a professional intermediary (typically, a solicitor specialising in intellectual property or a trade mark attorney) who would interpret the results.
Unregistered trade marks
Unfortunately, just because a person doesn't have a trade mark registration, that doesn't mean they don't have any rights. Under English law you cannot be sued for unregistered trade mark infringement, but you can be sued in the tort of "passing off" The definition of this tort can easily fill a chapter, so I'll keep it simple to the extent of being a little misleading: the tort arises where a person makes a misrepresentation which damages the goodwill (i.e. the value inhering in a commercial reputation) of another person. For example, if I used the domain name www.chanceclifford.com for legal services, I could be sued by Clifford Chance LLP in passing off even if they didn't have any relevant registered trade marks (which they do). The basis of their claim might be that I was misrepresenting to buyers of legal services that I was in some way associated with Clifford Chance LLP and thereby taking advantage of their goodwill, which would inevitably lead to a loss of business.
So, what does all this mean for your choice of domain name? It means that, before setting up shop, you should do some "common law" searches as well as registry searches before. That means searching on Google, Yahoo and MSN, in the BT Directory and the Yellow Pages, and in all relevant WHOIS databases for unregistered trade marks which are identical or similar to your chosen domain name. You should also search in other relevant local and specialist directories. Again, a professional search should be commissioned if a lot of money is being invested in the business and/or site associated with the domain name.
Does it infringe?
If you have found some registered or unregistered trade marks which are identical or similar to your proposed domain name, you will need to decide whether there is a real risk of infringement. I focus here upon registered trade mark infringement.
A registered trade mark may be infringed by the use in the course of trade: (i) of a domain name which is identical to the trade mark, in relation to goods or services which are identical to those in respect of which the trade mark is registered; or (ii) of a domain name which is similar or identical to the trade mark, in relation to goods or services which are similar or identical to those in respect of which the trade mark is registered, where as a result of such use there exists a likelihood of confusion on the part of the public; or (iii) of a domain name which is similar or identical to the trade mark, where the trade mark has a reputation in the UK and the use of the sign, being without due cause, takes unfair advantage of, or is detrimental to, the distinctive character or the repute of the trade mark.
So, unless your chosen domain name and the registered trade mark in question are identical to one another, and you plan to use the domain name in relation to goods or services which are identical to those for which the trade mark is registered, you are going to have to make a difficult judgement. Usually, you have to decide whether the domain name is really "similar" to the mark, and whether there is any likelihood of confusion on the part of the relevant public. As you might expect, there is a mountain of case law on these questions. In the case of a mark which "has a reputation in the UK", you will have to decide whether you use is without due cause, whether it takes unfair advantage of the mark, and whether detrimental to the mark. Before making any of these judgments, you should carefully study the relevant law, and carefully consider whether the risk of a trade mark infringement claim is worth taking.
Domain name disputes
Before finishing, you will also of course have to think about the chances of losing the domain name in domain name arbitration proceedings. But that is a matter for another post...
Health warning: this post contains some pretty crude summaries of some subtle areas of law, and if you are in any doubt about whether a chosen domain name infringes another's mark you should really seek professional advice.