A client of our firm discovered that an Internet search of his shop name reaches a domain of another business, although such other business name is not even similar to the said domain name. The meaning of this is that potential customers seeking the name of the ship will reach the other business. Is there a legal protection against such ‘customers kidnapping’ ?
The best way to protect a business name is by registration of a trade mark. Trademarks are designed to protect the public from being mislead while protecting the rights of the a trademark owner by ensuring that the potential consumers will be aware of the true origin of the goods. Trademark registration strengthens the ability to protect the name or logo, but is not a legal precondition for the protection of the name.
An Internet domain name leads Internet users to websites of businesses and is an important tool for the development of business reputation. In recent years, the ‘abduction’ of domain names has become popular. Sometimes a person registers a domain that should have been another’s without bad intentions but there are also those who purchase domain names for the purpose of selling them later to the business whose domain was so ‘abducted’ against payment of ‘ransom’. There are also those who purchase a domain name similar or identical to that of a business of another in order to enjoy the reputation of the other or even deliberately damage its business.
In the case of "domain name abduction" one can move the Court to issue an order prohibiting the infringer to use the domain name and one can also file a monitory claim in Court, including under the Israeli Unjust Enrichment Law that requires a person to compensate for the benefits arising from the illegal use of an asset (in this case, reputation) of another. Because Israeli law (unlike the law in the United States of America, for example) does not recognize the right to compensation for the mere infringement of a legal right and demands proof of the damage caused, usually the legal difficulty will be demonstrating the actual damage caused by the infringement or determination of the amount of profit generated by the infringement.
The Israeli Commercial Torts Law of 1999, however, allows a series of effective remedies in the event of a tort of passing off - a case where a business makes goods sold or services provided to be considered by mistake as an asset or a service of another business or an asset or a service related to another business. In such a case one can not only demand furnishing financial records of the tortfeasor to inspect the benefit derived by the tort, but also to compensate the victim by up to ILS 100,000 without a requirement to prove damage. Note that even when using this legal path, it is advisable to register a trademark as soon as practical because the registered trademark will assist if the proof of the infringed rights in the name and will strengthen the rights of the business owner.
It is important to note that any trademarks related issue is a complex issue and it is therefore advisable to consult with an attorney who specializes in the commercial law both in order to register a trademark and for to the protection of the reputation of the business or to avoid harming a third party's reputation.