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Battling the attack sites

B.C. ruling a positive development for victims seeking relief from the courts
By John Simpson
October 16 2015 issue

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A Sept. 14 decision from the B.C. Supreme Court includes a grab bag of legal remedies for victims of a growing Internet phenomenon: the “attack” website.

In British Columbia Recreation and Parks Association v. Zakharia [2015] BCSC 1650, the defendants had broadcast false and malicious statements about the B.C. Recreation and Parks Association and its principal via a website and Instagram account that incorporated the BCRPA’s trademarks to attract the attention of its customers and to thereby inflict maximum damage to their reputation.

The statements at issue in this case were that the plaintiffs were extortionists, bullies and prejudiced against disabled and low-income individuals, all of which Justice Gordon Funt determined were false. He awarded each of the corporate plaintiff and its principal over $100,000 in damages and injunctive relief for defamation, passing off and trademark infringement, injurious falsehood, breach of the Competition Act and conspiracy to injure.

The use of attack sites and social media to injure others’ reputations, particularly those of business competitors, is becoming increasingly common. This may be partly because it is so easy to do and because it can be so effective. To launch a devastating and targeted smear campaign against a competitor or some other adversary, all you need to do is launch a website saying whatever you want to say about them and direct all of their customers there by incorporating their trademark in the website’s domain name and in meta tags embedded in the website.

The phenomenon may also be on the rise because legal proceedings, including domain name dispute resolution proceedings, against the operators of attack sites and social media can be cumbersome and ineffective. In many cases, it may be difficult to identify who is behind the website since their identities may be sheltered by privacy policies. Beyond that, pursuing the perpetrators can become an expensive and frustrating game of whack-a-mole, as each time you manage to get a domain name cancelled or a website taken down, another pops up.

While injunctive relief, such as an order to take down a website and to cease and desist from displaying the victim’s trademarks, making certain statements via any medium, etc., may be obtainable in most cases, it can take many months to obtain such relief. Damages for defamation and injurious falsehood may also be obtainable but generally only where certain factors exist, such as evidence of a favourable reputation on the part of the plaintiff, evidence that the statements at issue were widely read and the defendant’s failure to apologize. Obtaining damages for trademark infringement or passing off can be a long shot, given the difficulty of proving related losses attributable to the attack site or offending social media.

The recent trend in Canadian trademark law away from liability for “initial interest confusion” is also unhelpful to victims of attack sites. “Initial interest confusion” is where Internet users are initially drawn to the defendant’s website because of the defendant’s use of the plaintiff’s trademark in a domain name, keyword ad or in meta tags, but then discover that it is not the plaintiff’s website as soon as they get there. In at least two recent decisions — Red Label Vacations Inc. v. 411 Travel Buys Ltd. [2015] F.C.J. No. 220, and Vancouver Community College v. Vancouver Career College (Burnaby) Inc. [2015] B.C.J. No. 1797 — courts have rejected “initial interest confusion” as constituting infringement, reasoning that there is no harm to the trademark owner if the consumer is no longer confused when they arrive at the defendant’s website.

However, BCRPA v. Zakharia is an encouraging development in this area. For one thing, Justice Funt did not hesitate to find that the defendant’s registration and use of “bcfit.ca” as the domain name to attract BCRPA’s customers and prospective customers to their attack site infringed BCRPA’s rights in its BCFIT trademark (thus applying the doctrine of “initial interest confusion” without mentioning it by name).

Victims of attack sites should also be encouraged by Justice Funt’s decision to award $10,000 in damages for passing off and trademark infringement, including $8,000 as “a reasonable estimate of the extent to which the value of goodwill of the trademark was depreciated” and $2,000 for the cost of registering the BCFIT trademark. The $8,000 for depreciation of goodwill was the full amount claimed by the plaintiffs for passing off and trademark infringement, and was described by Justice Funt as “modest,” though it appears to have been more or less arbitrary and not the subject of any expert evidence. He explained his unusual decision to include the cost of trademark registration in his assessment of damages by noting that the plaintiffs would not have felt compelled to register their BCFIT trademark if the defendants hadn’t used it as the domain name for their attack site.

The decision is a positive development for victims of attack sites, at least with respect to obtaining relief from the courts. But commencing formal litigation should be but one of the responses to an attack. Given how swiftly an attack site can inflict serious damage, an “all of the above” approach may be advisable, including retaining the expertise of an online reputation management expert.

John Simpson is the principal of Shift Law, an intellectual property and new media law boutique.

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