The internet is the new Wild West. Courts have repeatedly refused to enter into the fray of arbitrating disputes involving the internet. If entities secure a URL address or domain name using your name, you may be left without a remedy. This situation happens in franchising. Either third party entities or even franchisees within the system register or secure a URL using the name of the franchisor or franchise system. Franchisors are often left without recourse; powerless to take down the URL.
Listen to one novel approach taken by a business attempting to protect its name and presence on the internet. Petroleum National Berhad, an oil company based in Malaysia and owner of the Petronas trademark, sued Godaddy.com, Inc. for contributory cybersquatting based upon a third party’s use of the Godaddy.com’s domain forwarding service. Godaddy.com’s domain forwarding services allows registrant of a URL or domain name to automatically and seamlessly forward internet traffic from one domain website to another website. In this case a third party registrant owner of the domain “petronastower.net” and “petronastowers.net” employed Godaddy.com’s domain forwarding services to forward traffic to “camfunchat.com,” an adult website.
Both the US government and the Malysian government contacted Godaddy.com on behalf of Petroleum National Berhad. To no avail, Godaddy.com refused to take action against the third party owner of “petronastower.net.” The stance case of PETRONAS V. GODADDY.COM ensued. Court action like the governments’ efforts, however, proved unsuccessful. The court in the case held there is no such thing as contributory cybersquatting. The law simply does not provide for a contributory claim under the cybersquatting laws. So for now [I have not confirmed this] all internet traffic to “petronastower.net” shall continued to be forward to the adult website, “camfunchat.com.”
Note, however, the court’s decision in this case is not universal. Courts in other cases have upheld a cause of action for contributory cybersquatting, including a case in California involving Verizon, a case in Washington involving Microsoft and a case in Michigan involving Ford Motor Company.
So what should franchisors do? Here are 3 suggestions:
1. Google your franchise system name often to see if your name is being used. Consider setting up Google alert that will tell you when your name is being used.
2. Include a provision in your franchise agreement that franchisees are not permitted to register or establish a URL address or domain name using the franchise name and enforce this prohibition.
3. Address trademark issues when they arise. Allowing time to pass without addressing issues will result in diminished enforceability.
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Trademarking and Franchise Law