Scotiabank Loses Domain Name Dispute

Scotiabank Loses Domain Name Dispute

Zak Muscovitch is the principal of The Muscovitch Law Firm, in Toronto, Canada. He is a veteran domain name lawyer having represented numerous domain name owners from all over the world in disputes and transactions since 1999.


Banking errors always seem to be in favour of the bank, however in this particular case, Scotiabank’s errors led to its defeat by a small Toronto magazine publisher in a domain name dispute over CARIBANA.COM.

The Caribana festival has been a major annual summer attraction in Toronto since it was launched in 1967, Canada’s centennial year. It is a celebration of Caribbean culture that is estimated to attract over $300 million dollars to the city each summer. It attracts visitors from all over the world. The festival was originally conceived and developed by the Caribbean Cultural Committee of Toronto, who applied for a Canadian registered trademark on June 22, 1976, and the mark was registered on March 25, 1977, in relation to “entertainment services, namely the arranging, promotion and presentation of a Caribbean cultural festival providing dances, musical entertainment, theatrical entertainment, boat cruises, parades, cultural displays, arts and crafts, and restaurant services to the public”.

After a series of assignments of the CARIBANA trademark over the years, the Caribana Arts Group is the current registered trademark owner. The Caribana Arts Group is an Ontario corporation without share capital. The Caribana Arts Group however, is not the registrant of the domain name, CARIBANA.COM, which it turns out, is owned by Working Word Co-operative Ltd., incorporated in 1994 (“Working Word”), a magazine publisher who states that it has published the official Caribana guide from time to time over the years. Working Word registered the domain name, CARIBANA.COM, on April 21, 1997, and has used it primarily in connection with a web site about the Caribana festival since then.

Accordingly, if there were to be a dispute over who is the rightful registrant of the domain name, CARIBANA.COM, one would expect it to have been commenced by the registered trademark owner, the Caribana Arts Group. As it turns out however, it was remarkably one of Canada’s big five banks; Scotiabank, who brought a complaint to the World Intellectual Property Organisation (“WIPO”) against Working Word. WIPO is one of four dispute resolution providers accredited by the Internet Corporation for Assigned Names and Numbers (“ICANN”) to resolve certain kinds of domain name disputes that fall under the jurisdiction of ICANN’s Uniform Dispute Resolution Policy (“the “UDRP”). All “.com, .org, and .net” domain names are subject to the UDRP. UDRP complaints are adjudicated entirely online through a quasi-arbitration procedure. Panelists are selected through a procedure mainly set out in the UDRP Rules. If a UDRP Complainant is successful in its complaint over the rightful ownership of a disputed domain name, it can have the disputed domain name forcibly transferred to itself pursuant to an Order made by the dispute resolution provider that domain name registrars are required to abide by.

In order for a domain name dispute to fall within the jurisdiction of the UDRP, it must meet the following criteria:

(i) [the] domain name is identical or confusingly similar to a trademark or service mark in which the complainant has rights; and

(ii) [the domain name registrant] has no rights or legitimate interests in respect of the domain name; and

(iii) [the] domain name has been registered and is being used in bad faith.

As can be seen from the foregoing, on its face, a complainant need only “have rights” in a trademark in order to meet the first part of the three-part test; it need not necessarily be the trademark owner. Of course, by and large it is the actual trademark owner who brings a UDRP Complaint. In a handful of cases, however, a Complainant has established that it in fact and in law has sufficient rights in a trademark upon which to base a UDRP Complaint. It was this class of exceptional case that Scotiabank attempted to fit itself into.

In its Complaint1, Scotiabank stated that “it has a significant presence in the Caribbean region” and that it became the “title sponsor” of the Caribana festival in 2008. A “title sponsor” is generally a sponsor that has purchased the right to ‘co-brand’ with an event. That is the case here as can be seen from Scotiabank’s marketing material and logo. According to Working Word however, “the Complainant is one of four banks that have sponsored the Caribana festival in the past ten years; the Royal Bank of Canada, TD Canada Trust and the Bank of Montreal have each sponsored the Caribana festival during this time”. Working Word also stated that the title sponsorship agreement was set to expire in 2012, and as such it is a “temporary relationship”, and another party may in the future replace Scotiabank as the title sponsor.

Nevertheless, Scotiabank stated in its Complaint, that “it has been licensed by the Festival Management Committee to use the CARIBANA trademark” and that it is “authorized to bring [the] proceeding”. But who is the “Festival Management Committee”? Is it a body or agency connected to the registered trademark owner, the Caribana Arts Group? The answer is no. The Festival Management Committee was reportedly established as an independent body by the City of Toronto in 2006 to ‘take over’ and operate the festival after controversy regarding the Caribana Arts Group’s management of the festival which resulted in substantial debt. Since then, controversy has however continued, with the Caribana Arts Group claiming rightful ownership of the festival and demanding that the festival ‘be returned’ to it by the Festival Management Committee.2

In press reports, the Festival Management Committee’s Chairman, Joe Halstead has been reported as acknowledging that the CARIBANA trademark was being used by the Festival Management Committee even though it may indeed rightfully belong to the Caribana Arts Group, and that the Caribana Arts Group may be entitled to compensation for the Festival Management Committee’s use of the mark.3

Furthermore, the issue of the possible absence of trademark rights owned by the Festival Management Committee was compounded by comments made by Henry Gomez, the Chair of the Caribana Arts Group: “The Festival Management Committee only manages the Festival. Despite being arbitrarily put in place by the City of Toronto, it does not own the CARIBANA™ Festival or the trade name.... the Festival Management Committee does not have a valid licence to operate the CARIBANA™ Festival.”4  Mr. Gomez does however apparently concede that the Festival Management Committee was somehow “authorized to police the use of the trade name and take steps to recover from Working Word”, but complains that Caribana Arts Group was never informed that a case was being brought against Working Word.

In any event, whoever is entitled to own the CARIBANA.COM domain name, it is difficult to see how it could be Scotiabank. Scotiabank, being merely the title sponsor with arguable rights to use and enforce the CARIBANA trademark, would seem to lack standing to have the disputed domain name transferred to it, but that is nonetheless exactly what it sought to do in the case that it brought to WIPO. In arguing that it had sufficient standing to bring the Complaint and obtain the transfer of the domain name to itself, Scotiabank relied upon two previous WIPO decisions; Toyota Motor Sales U.S.A. Inc. v. J. Alexis Productions, WIPO Case No. D2003-0624 and Telcel, C.A. v. jerm and Jhonattan Ramírez, WIPO Case No. D2002-0309.

In the Toyota case, supra, the panellist permitted Toyota Motor Sales U.S.A. Inc. to bring the complaint on behalf of its parent company, Toyota Motor Corporation, which was the actual registrant of the subject trademark for LEXUS, on the basis that “even a non-exclusive licensee has the right to assert trademark rights in a licensed mark and to take action to protect the licensed mark. Accordingly, Complainant has satisfied the first element of the Policy.” Nevertheless, surely a mere licensee could not use the UDRP to obtain the transfer of a domain name without a valid license from the registered trademark owner. In the CARIBANA.COM case, it is unclear how Scotiabank obtained a license to the CARIBANA trademark, when the trademark owner apparently denies that any such license was ever given. Furthermore, while it is understandable for a wholly owned subsidiary to bring a domain name dispute complaint on behalf of its parent corporation, it is difficult to comprehend how such circumstances are comparable to an unrelated third party obtaining the ownership of a domain name for itself, rather than on behalf of the trademark owner, or at least the licensor.

Furthermore, in the Telcel case, supra, that Scotiabank relied upon, the Complainant Telcel, who was the owner of numerous TELCEL trademarks and was also known as TelcelBellsouth as a result of a licensing and marketing agreement for the Bellsouth mark in Venezuela, successfully obtained the domain name, TELCELBELLSOUTH.COM for itself from a cybersquatter. This hardly seems analogous to Scotiabank obtaining CARIBANA.COM for itself.

In any event, the Panelist ruled that “[Scotiabank] has established that it is a sublicensee of the trademark CARIBANA which is currently registered in the name of Caribana Arts Group”. Ostensibly, the Panelist believed or had some evidence to support the Complainant’s contention that its purported sublicense flowed from the actual trademark owner. This would necessarily mean that the Panelist determined that the Caribana Arts Group had licensed the mark to the Festival Management Committee, and the Festival Management Committee, in turn, licensed the mark to Scotiabank, notwithstanding that there is no reference in the decision to the existence of any such license agreement between the Caribana Arts Group and the Festival Management Committee, and indeed the existence of such a license is denied by the Caribana Arts Group, as aforesaid by Mr. Gomez. It is interesting to note the Panelist’s comment that “It is not up to the Panel to speculate why the...Caribana Arts Group ...was not a party to this case or did not present evidence on the issue of registration of the disputed domain name in bad faith.” One would have thought that this was precisely the question that the Panelist ought to have asked, as the absence of the actual trademark owner from this dispute would seemingly raise substantial concern.

Assuming however, that Scotiabank’s purported sublicense was valid, and even assuming that it had been given valid authority to enforce the CARIBANA trademark rights against Working Word, it remains uncertain just what would have happened to the domain name if it were ordered to be transferred to Scotiabank. Ostensibly, it would become the registrant of the domain name, and would remain so even after its license agreement expired. According to a Globe and Mail report however, Scotiabank spokeswoman Ann DeRabbie stated that, “We wouldn't have kept it. As a financial institution we’re not interested in holding on to that domain name.”5  In that case however, why wouldn’t Scotiabank merely have assisted the Festival Management Committee in prosecuting this case, rather than bring the case in its own name on its own account?

Ultimately however, Scotiabank lost the case, remarkably not because of any issues with its standing to bring the Complaint, but rather because the “Complainant has failed to prove that Respondent registered the disputed domain name in bad faith.” Given that there was evidence presented by the Respondent, that went unchallenged by the trademark owner, or apparently by the Complainant, that the Respondent had a relationship with the CARIBANA trademark owner long before Scotiabank became the title sponsor, had published the official festival guide several times, had registered the domain name with the approval of the trademark owner, and had published the CARIBANA web site with the cooperation of the trademark owner, the Panelist was unable to conclude that the Respondent domain name registrant had registered the domain name in bad faith.

There is a provision in the UDRP that allows a Respondent domain name registrant to request that the Panel make a finding of “Reverse Domain Name Hijacking” (“RDNH”). RDNH is defined as, “using the [UDRP] in bad faith to attempt to deprive a registered domain name holder of a domain name”. The panelist pointed out in the decision, that to succeed on an allegation of RDNH, a Respondent must show that the Complainant knew of respondent’s unassailable rights or legitimate interests in the disputed domain name or the clear lack of bad faith registration and use, and nevertheless brought the complaint in bad faith. The panelist rejected the request for a finding of RDNH on the basis that the “Complainant has rights in the trademark as a sublicensee through a chain of title extending back to the current registered trademark owner Caribana Arts Group.” Since the actual registered trademark owner, the Caribana Arts Group, was not even a party to this dispute, the panel obviously did not hear its claim that there was in fact no such chain of title evidenced by a valid license and sublicense agreement, and that the purported sublicensee, Scotiabank, could not possibly have a valid claim to the domain name as a result. Accordingly, the participation of the actual trademark owner would seem to be imperative in such domain name dispute hearings, lest a claim be advanced without the requisite underlying rights and authority.

Had Scotiabank’s standing been questioned and determined to be lacking, Scotiabank could have been found guilty of RDNH, as was the case in Safari Casino A.G. v. Global Interactive, LTD. AF-0288 (October 4, 2000). There the panel found that the Complainant was not the actual trademark registrant and had failed to submit sufficient evidence to show its standing to bring the complaint. Seemingly, Scotiabank narrowly avoided such a result as had the trademark owner, the Caribana Arts Group been aware of this proceeding and been able to intervene or participate, it likely would have disputed Scotiabank’s standing to seek the transfer of the domain name, and this may have in turn led to a finding of RDNH. Fortunately for Scotiabank however, its error in bringing this ill-advised complaint did not result in any such finding which would have damaged its reputation. Scotiabank for the time being at least, will have to content itself to its second choice for a domain name,, a domain name registered to the Festival Management Committee.

1 References herein to the Complaint are as recited by the panelist’s decision in the case.

2 See, for example, “CCC Owns Caribana Trademark”, Share Magazine, August 26, 2009.

3 See: “CCC Owns Caribana Trademark”, Share Magazine, August 26, 2009.

4 “Scotiabank Loses Case for Caribana Festival Domain Name”, Domain Name Wire, April 20, 2010, Comments Posted by Henry Gomez.

5 “Scotiabank Fails in Bid to Snag Caribana Domain Name”, Omar El Akkad, The Globe and Mail, April 26, 2010.