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SINGAPORE: Protection Against Cybersquatters Affirmed as a Matter of Public Policy

In the case of 3 Corporate Services Pte. Ltd. (the plaintiff) against Grabtaxi Holdings Pte. Ltd. (the defendant), decided on January 22, 2020 ([2020] SGHC 17), the High Court of Singapore made it clear that a cybersquatter cannot enforce an otherwise valid contract as a matter of public policy.

After an initial discussion on the sale of the “grab.co.id” domain name, the defendant submitted a letter of offer to purchase said domain name. The offer was subject to certain preconditions, including a satisfactory verification process showing that the domain name was unencumbered and registrable to the defendant. However, subsequent conduct by, and due diligence of, the plaintiff caused the defendant to call off the transaction out of concern that dealings with the plaintiff “raised too many questions.”

On February 14, 2018, the plaintiff sued the defendant, seeking specific performance or damages in the sum equivalent to the purchase price of the domain name. The defendant argued that it could not have been in breach of contract and that the plaintiff could not have suffered any loss and/or damage since the preconditions to the contract had not been satisfied.

The questions before the court were as follows:

1. Was the letter of offer a valid and enforceable agreement?
2. If affirmative, what loss had the plaintiff suffered so as to be entitled to damages?
3. Was the plaintiff a cybersquatter? If so, was the letter of offer non-enforceable as being contrary to public policy?

Evidence before the court showed firstly, that the plaintiff was not the owner of the domain name, and that between the plaintiff and its affiliates, they had registered 1,232 domain names comprising generic and non-generic names.

Since the plaintiff was not the owner of the domain name, the court found that it would be impossible for the plaintiff to enforce the contract, and the issue of damages could not have arisen.

On the last issue, with the help of an expert, the court concluded that the indiscriminate registration of domain names by the plaintiff was tantamount to “consummate cybersquatters” as it had engaged in “the deliberate, bad faith abusive registration of domain names in violation of rights in trademarks and service marks” and the contract could not have been enforceable as it would be contrary to public policy.

Consequently, the court dismissed the plaintiff’s claim with costs to the defendant.

This decision affirms the protection accorded to brand owners against opportunistic cybersquatters.

By: Gladys Mirandah

A version of this article first appeared in the INTA Bulletin Vol. 75, No. 5. For more information, please visit http://www.inta.org/INTABulletin/Pages/INTABulletin.aspx