Domain disputes common with franchises.
I often see domain name disputes between franchisors and franchisees when it comes to domain names. These usually resolve around two issues:
1. Franchisor doesn’t want franchisee to register a domain name using the franchise trademarks
2. When a franchise agreement is terminated, the franchisor wants the domain name back/terminated
Here’s a case in point. Re-Bath LLC recently filed a domain name arbitration request against a former franchisee in Reno. The franchisee registered the domain name RebathReno.com when it had a franchise contract with Rebath. The relationship later went sour, and the franchisee and Rebath terminated their relationship.
Rebath argued that the former franchisee no longer had rights to own the domain name RebathReno.com, but the respondent said the franchise agreement didn’t mention domain name rights.
As is usual in this type of case, the panel found that this dispute is outside the scope of UDRP because it deals with other contract rights. But Rebath could have avoided much of this mess by including clauses related to domain names in its franchise agreement.
Franchisors take note: one extra clause in your initial agreements could save you a headache down the road.
Louise says
The former franchisee is in the wrong if it continues to use a Trademark name for its business. That was its mistake – to register a name with trademark, that it can’t hang on to. Now that it’s getting business through the domain, it doesn’t want to give it up.
Re-Bath wants the name and business it generates, of course. What would be fair is if the franchisee puts buys a new domain that doesn’t infringe on any trademark, and puts up a blank page to direct traffic to the new name, until the name expires. Then it has to let it go.
Zak says
Thanks for pointing out this case Andrew and for your observations and good advice.
Since the UDRP is only intended to deal with cybersquatting and not trademark infringement per se, or contractual disputes, it would be interesting to see what would happen in a UDRP if the franchise contract expressly stated that any registration of domain names by the franchisee would be considered bad faith registration and use and no legitimate interest. That would ostensibly seem to bring it into the jurisdiction of the UDRP in form, at least, but I wonder whether in substance this would be treated by the panel as within the jurisdiction.
I guess if one were to take the trouble that way, they might as well just deal with it on a pure trademark rights and infringement basis…
stu says
UDRP=CORRUPT