Legal Drama

JUMIA’s Rocket Internet Allegedly Holds Competitor KONGA’s Trademark RANSOM: Cybersquatting in Africa Just Got Real!

The legal drama keeps coming and for Africa, especially, the best is yet to come. Indeed, the legal drama that keeps  trickling in is just a foreshadow of what is to come as Africa’s entertainment industries gets even more sophisticated. I am savoring and loving every moment.

The latest legal drama is the case of  JUMIA’S ROCKET INTERNET v. KONGA.COM. Actually folks, this is a pretty easy case albeit Konga seems quite worked up, understandably so, over Rocket Internet’s move.

LET’S TAKE A QUICK LOOK AT THE PROFILE OF TODAY’S IP CASE IN AML’S COURT DOCKET

Type of case: Trademark Infringement
Applicable Law: Trademark Law
Jurisdictions (place where this case can be heard): NIGERIA, GERMANY AND THE SEVERAL COUNTRIES THAT HAVE THE REGISTERED DOMAIN NAMES, AND ICANN.

THE ALLEGATIONS – CYBERSQUATTING
Rocket Internet, owners of Jumia.com (whose Nigerian co-founders have since been allegedly replaced by German owners), prior to Konga.com launching its  e-commerce store, registered the domain name of Konga, almost a year ago in (11) African countries. In pertinent part, the allegations read:

“Representatives from Konga.com have informed TechCabal that they will soon bring legal proceedings against Rocket Internet, over Konga domain names registered by the German internet company in at least ten countries.

The domains in question are in: Cote D’ivoire – Konga.cd, Cameroun – Konga.cm, Lybia – Konga.ly, Mauritius – Konga.mu, Morocco – Konga.ma, Malawi – Konga.mw, Konga.sc – Seychelles, Konga.sh – Saint Helena, Kenya – Konga.co.ke, South Africa – Konga.co.za.

Whois information indicates that all the domains were registered in June, 2012 by one Arnt Jeschke on behalf of Rocket Internet GmbH in Berlin. The date is interesting because while the twin ecommerce companies that would later become Jumia had already launched by then, Konga would not launch until July. . .” – Tech Cabal

LET’S LOOK AT USA TRADEMARK LAW FOR A QUICK MINUTE
USA law is relevant here because as we will see, ICANN sort of mirrors the Federal Anti-cybersquatting Protection Act (APA)  method of resolving domain disputes. Three key laws that govern the use of Trademarks in the USA are: ) The Federal Lanham Act  2) Common Law i.e. Unfair Competition Laws and 3) State Statutes. The Lanham act deals with registration and infringement of trademarks, among other things. The Lanham Act was amended in 1999 by Congress to specifically prevent cyber squatting.

WHAT IS CYBERSQUATTING?
It is just a fancy word for saying “stealing my hard work,” really.

HOW DOES IT WORK?
Your competitor has a trademark and is an existing business or will soon be. YOU KNOW this. You want to undermine your competitor’s efforts. So, you choose the same domain name for your business as your competitor’s, and register it. When your competitor realizes what you have done, you say , “pay me and I will release YOUR name to you.”

Trifling right? Yeah, I know.

You’ve put in your energy, sweat and blood and someone else just wants to steal from you and worse, hold the work you built ransom and make you pay for your own work. It’s the world we live in. I should say this cybersquatting practice has really diminished over time and you will see why below.

Folks, the hallmark of cyber squatting litigation/analysis is that the domain registrant registered the name in BAD FAITH, hoping to later profit by selling the domain name to the trademark owner.

WHAT DO YOU DO IF SOMEONE HAS CYBER SQUATTED ON YOUR TRADEMARK?

First, this case is interesting because the allegation is that Rocket Internet Registered KONGA , in 10-12 countries (depending on whose report you take) BEFORE Konga became a well known brand. Typically, the cybersquatter registers the name of its competitor’s brand, after the brand becomes well known. So, it is a bit of a curve ball here.

In the USA, the Federal Anti-cybersquatting Protection Act (APA) helps protect trademark owners from this bad faith practices.

We will talk about the APA but I want to focus in on ICANN as a remedy for Konga because it is expeditious, and they are obviously on African soil fighting over African intellectual property issues.

HOW THE APA WORKS IN THE USA

1. Trademark owner can sue in Federal Court against the Cyber Squatter

2. Trademark owner in the suit typically will ask for a court order to have the cyber squatter transfer the name back to the trademark owner.

3. Trademark owner will ask the cybersquatter for money damages.

4. Trademark owner has the burden of showing the following key requirements under the APA:

  •       When the domain name registrant registered the name, he or she had a bad faith intent to profit from the trademark.
  • The trademark was already distinctive at the time the name was first registered.
  • The domain name is the same or confusingly similar to the trademark owner’s mark.
  • The trademark enjoys protection under Trademark law.

The key thing here is the bad faith requirement must be met. If the domain registrant shows that there was no bad faith, then the domain registrant keeps the name.

How Does the Court Determine Bad Faith?

There are several factors courts look at:

  1. The use of the trademark by the registrant. Is it used in a negative way and in a way that detrimentally affects the trademark owner’s brand?
  2. Has the registrant tried to/offered to sell the name back to the trademark owner?
  3. Has the registrant provided false/outdated contact information?
  4. Is there an apparent pattern of cyber squatting i.e. registering 1o-12 names in 10-12 countries that are the same name as your competitor or that are confusingly similar marks?
  5. Is the mark at issue famous or highly distinctive?

In America, it doesn’t matter that you are Rocket Internet and based in Germany. USA courts can make a ruling regarding your cybersquatting activities without them having personal jurisdiction over you i.e. the power to force you to come into their courts so they can hear the cybersquatting case against you.

THE EASY AND COST EFFICIENT SOLUTION – ICANN

Konga is threatening legal action i.e. will sue Rocket Internet. For African owned companies, tech, music or otherwise, don’t be so quick to threaten legal action until you have a clear idea  where you are headed, and also consult with an attorney. Until your lawyer says you have a case, you might want to chill on the press statements.  First, you don’t want to look silly making promises and not following through, think IROKO v. AFRINOLLY; second you may not have a case; and third you may have a case but cannot afford the cost of litigation which means you have to wait. Either way, save the noise for later.

In this instance, ICANN is the best route, in my view, for Konga to take.  Here is why:

  1. Every domain registrant already agrees, irrespective of where they are, to arbitrate a domain dispute under ICANN.
  2. ICANN means Internet Corporation for Assigned Names and Numbers (ICANN)
  3. The arbitration system is called the UNIFORM DOMAIN NAME DISPUTE Resolution Policy (UDRP).
  4. ICANN, unlike the APA, can be enforced internationally/globally.
  5. 85% of the cases before ICANN almost always favors the trademark owner.
  6. Decisions are expeditious and definitely not as costly and do not take years the way lawsuits can.

What criteria will ICANN look at to determine if Konga should get its names back from Rocket Internet?

  • Whether KONGA.com i.e. the domain name and the 10-12 other names registered by its competitor are identical or confusingly similar? In this instance, errrr  . .. “yar.”
  •  Whether Rocket Internet has any rights or legitimate interests in the domain names. Of course it is Konga’s burden to argue, “no they don’t” and also prove it.
  • Whether Konga was registered in bad faith and/or is being used in bad faith. I think even if Rocket Internet can establish it registered the domain names in good faith, it can’t necessarily show it is not being used in bad faith. Both companies are companies with e-commerce fronts selling practically very similar electronic and other household goods/products. Both companies are also competing for the same customers within Nigeria and across Africa.

In any event, folks, we are done with this legal drama!

Again, this case to me appears pretty straight forward on the part of Konga. Whether that in fact is the reality depends on how the owners deal with issues in their business practices and the kind of lawyers they also have.

I am done with my splurging for today. We knocked the big matters out of the way. 🙂

Catch you all soon.

Cheers,
Uduak

KONGA OWNER

JUMIA FORMER OWNERS

Grammys 2020 Entertainment Law Initiative Award Recipient

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Africa Music Law™

AFRICA MUSIC LAW™ (AML) is a pioneering music business and entertainment law blog and podcast show by Fashion and Entertainment Lawyer Ms. Uduak Oduok empowering the African artist and Africa's rapidly evolving entertainment industry through brilliant music business and entertainment law commentary and analysis, industry news, and exclusive interviews.

Credited for several firsts in the fashion and entertainment industry, Ms. Uduak is also a Partner and Co-Founder of Ebitu Law Group, P.C. where she handles her law firm’s intellectual property law, media, business, fashion, and entertainment law practice areas. She has litigated a wide variety of cases in California courts and handled a variety of entertainment deals for clients in the USA, Africa, and Asia.

Her work and contributions to the creative industry have been recognized by numerous organizations including the National Bar Association, The American University School of Law and featured in prestigious legal publications in the USA including ABA Journal and The California Lawyer Magazine. She is also an Adjunct Professor at the prestigious Academy of Arts University in San Francisco.
For legal representation inquiries, please email (uduak@ebitulawgrp.com). For blog related inquiries i.e. advertising, licensing, or guest interview requests, please email (africamusiclaw@gmail.com). Thank you for visiting Africa Music Law™.

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