Domestic law's limitations in dealing with Internet scams are well-known. When scams involve the use of domain names similar to registered trade marks, the mark's owner may have recourse through ICANN, but in the meantime consumers could still be deceived and harm done to the mark's reputation.
A recent Australian case, Australian Competition and Consumer Commission v Chen [2003] FCA 897 (27 August 2003), shows that domestic consumer protection law, while not a perfect tool, is a useful adjunct in the fight against those using domain names similar to registered trademarks. Even when a domestic ruling might not be enforceable overseas, its impact on overseas administrative agencies is an important consideration.
Chen set up websites, one of which imitated the Sydney Opera House's official site. On all sites he falsely represented that they were affiliated with the Sydney Opera House Trust, and that the sale of tickets to events at the Opera House through the sites was approved or permitted by the Trust. The sites purported to sell tickets to performances at inflated sums, but no bookings were made of course. Chen later disposed of the domain name www.sydneyopera.org but kept the other two.
The ACCC brought proceedings. Justice Sackville in the Federal Court held Chen's misleading and deceptive conduct breached the Trade Practices Act. Chen however was American, had stopped taking bookings and his only connection with Australia was the websites. Was there any point in granting an injunction against him?
An injunction could be considered futile: there is no mechanism for the registration or enforcement of an injunction under the Act in any US courts, and the offending conduct had stopped.
Nonetheless, Justice Sackville granted an injunction because:
- there was a risk that Chen might resume the misleading and deceptive conduct
- cross-border fraud and misleading conduct, particularly through the internet, is a growing problem for the international community
- the ACCC would bring any orders made in these proceedings to the attention of the US Federal Trade Commission and request its assistance in relation thereto pursuant to the Co-operation Agreement and in accordance with the ICPEN Memorandum
- he was prepared to infer that the FTC is more likely to institute action against Chen to curtail misleading or deceptive conduct in the US which affects Australian consumers if an Australian court grants injunctive relief than if it does not;
- in assessing whether the grant of injunction is futile, the court should consider not only formal enforcement mechanisms, but the likely response of administrative agencies in the foreign country.
An injunction was granted to restrain Chen by himself, his servants or agents from "publishing on the Sites, or any similar Internet Site accessible in Australia, information or material relating to the Sydney Opera House, or events at the Sydney Opera House, that is misleading or deceptive or is likely to mislead or deceive consumers in Australia."
Justice Sackville ended by calling for international co-operation: "While domestic courts can, to a limited extent, adapt their procedures and remedies to meet the challenges posed by cross-border transactions in the Internet age, an effective response requires international co-operation of a high order... Clearly enough, much more needs to be done if Australian consumers are to be adequately protected against fraud or misleading conduct perpetrated over the Internet.
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