TYPO-SQUATTING IN THE CZECH REPUBLIC

Last spring German company Jobs and Adverts began an on-line employment Web site in the Czech Republic called "jobpilot.cz," an address the company picked because it was free in the 18 countries in which it operates. A month later, a locally established recruitment site, "jobs.cz," bought the URL address "jobspilot.cz."

As reported in the Prague Business Journal, Jobpilot.cz argues the subtle variation is an infringement on its "Jobpilot" trademark, registered in Germany and subsequently in other countries including the Czech Republic. Or at least unethical.

"We did a marketing campaign and it raised expectations, and because of one mistake, adding one letter, it could generate a negative feeling against us," says Jaroslav Elias, general manager of the Jobs and Adverts Prague office. "This is no way to do business."

Jobs.cz, established four years ago, contends that it was the first job recruitment site and should have rights to any recruitment domain name that includes the word "job" because it established the English word in Czech jobseekers' minds.

"Four years ago, I decided to promote the word 'job' as a synonym for a place where you can find jobs on the Internet," says jobs.cz founder Libor Maly, who has bought domain variations on other job search sites. "They are using the marketing momentum I've developed here."

Uncharted territory

The controversy is local evidence of a growing legal gray area surrounding the Internet, where there as many "brand names" in the form of URL addresses as there are strands in the World Wide Web.

For Czech law, as with court systems worldwide, it's uncharted legal territory.

"These problems are really starting to spin," says Karin Pomaizlova, an intellectual property and trademark attorney with the Prague firm Linklaters and Alliance. "I wouldn't blame Czech law, it's just that these cases are so new."

Most Internet legal cases deal with domain names and their possible infringement on trademarks or copyrights. In the formative years of the Internet, when universities, the government and a few private individuals were its only users, there was little threat of copyright infringement. But the business world's discovery of the Web's power gave birth to a new form of piracy known as "cybersquatting," where savvy Internet users buy corporate names dirt cheap and hold them ransom.

A landmark case in the U.K. in 1998 forced two young businessmen, who bought domain names of well-known British companies like "marksandspencer.com" and "virgin.com" with the intention of selling them for a quick profit, to give up the addresses. The court also reportedly ordered payment of L65,000 (Kc 4 million) in court costs legal fees.

A Prague-based English-language newspaper, The Prague Post, which is found on the Internet at "praguepost.cz" and has been a registered trademark for nine years, is currently battling a U.S.-based cybersquatter that bought the domain "praguepost.com."

When a user logs onto "www.praguepost.com," he is shuttled to a site called "Czech Daily," a news site owned by the U.S.-based World News Inc. that has nothing to do with the local newspaper.

"In our opinion this [company] is making an unfair use of our trademark," says Kal Korf, the Post's chief technology officer.

The Prague Post quickly registered "praguepost.net" and "praguepost.org" and sent cease-and-desist letters to World News.

"We don't want to litigate over the issue, but we will," said Korf. "If they think they can take advantage of us because we're in the Czech Republic, they've got another thing coming."

Since the dispute is over a "top-level" domain address — a ".com" versus a ".cz," for example — The Prague Post would likely have to pursue the case in U.S. courts, where top-level addresses ".com," ".net," ".edu," ".mil" and ".org" are registered and governed.

Courts in the U.S. and U.K. have consistently ruled against cybersquatters whose intent is to sell the name for profit or hurt the trademark holder.

In past years, litigation or payoffs were the only recourse trademark holders had to get a ransomed domain name.

Fending off trouble

But within the last year, most non-profit, government-funded domain registries worldwide have adopted similar dispute-resolution processes that require arbitration to decide who has the right to domain names that step on trademarks.

For rows over top-level domains, the U.S.-based Internet Corporation for Assigned Names and Numbers (ICANN) provides an arbitration process in cooperation with the World Intellectual Property Organization in Geneva and the top-level registry InterNIC.

Disputes in the Czech Republic will go through a process outlined by cz.NIC, a government-funded registry formed last September, which has adopted a similar arbitration process for the domain suffix ".cz" — called a country code top-level domain.

Cz.NIC registers hundreds of domain names a week, some of which will almost assuredly be fodder for trademark disputes, say lawyers. There are currently more than 50,000 ".cz" sites registered.

Like all domain registries, cz.NIC issues names on a first-come, first-served basis. Names cost Kc 1,600 and require an Kc 800 annual renewal fee.

It too has developed a dispute settlement process following closely the ICANN model, which contracts the arbitration to an impartial expert approved by both sides.

The jobpilot.cz/jobspilot.cz case may likely be the process' first, as both sides say they aren't budging.

Lawyers stress, however, that the process is not legally binding, though it provides good ammunition for the winner in the courtroom if the loser ignores the decision.

"It's not as advanced or as professional as a piece of legislation," says Gabriella Vendlova, an attorney with the Prague offices of law firm Baker and McKenzie. "But it's a good effort to make this environment work."

What about 'McJob'?

Jobs.cz's Maly, who boasts an impressive list of corporate clients, argues that the word "job" is the centerpiece of a Kc 2 million advertising campaign and that newcomers are catching a free ride.

"If you're using it as symbol for four years, it's more than a word," insists Maly, who compares "job" to the "Mc" in McDonald's Corp. "They are systematically trying to confuse clients."

But while Maly's argument is rooted in the passion of building a market leader, it will not likely stand the legal test.

"If you go to a patent office and try to register "job" for a recruitment agency, there's no way you can succeed," says Pomaizlova.

While Maly says his intention in registering "jobspilot.cz" was not to hold the address ransom, he admits it is a business ploy to steer traffic away from a competitor — as he says jobpilot.cz did by using the word "job."

It's a technique, a sort of "typosquatting," that Maly has used repeatedly.

A Web site called "Jobonline.cz" was registered last March and two months later Maly bought jobsonline.cz. The same thing happened with a site called "joblist.cz."

When an "s" is added at the end of job, it connects to Maly's site, "jobs.cz."

"They had the opportunity to register these names and they did not," says Maly.

Elias says he didn't think to buy the variations of jobpilot.cz.

"That's why we chose 'jobpilot,' a much longer word, to differentiate ourselves from 'jobs.cz,'" says Elias. "We did not expect such games."

But cz.NIC reserves the right to cancel a domain name if it is "provably used in a way that can be deceitful for Internet users," according to its registration rules.

It'll cost you

Maly has offered to sell jobspilot.cz to jobpilot.cz. Elias offered the registration fee of Kc 1,600 and Maly declined. Lawyers say Maly is treading a slippery legal slope with the slight variation of established sites.

"I think you are looking at a trademark infringement case," says Pomaizlova. "We acknowledge as legal professionals that the domain name is governed by the trademark."

Lawyers and Internet professional expect the number of disputes to increase dramatically as the Internet grows into a business-to-consumer force in the Czech Republic.

"These problems are really starting to spin," says Pomaizlova. "We're interested ourselves in the court decisions."

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