The recent decision in Thomas International Limited v Humantech Pty Ltd  FCA 541, highlights when the Court will grant an interlocutory injunction to compel the transfer of domain names.
Thomas International was an Internet business that provided psychological testing services. In 2007 they entered into a Master Licence Agreement with Humantech under which Humantech was granted exclusive rights to select distributors to sell Thomas’ products in South Africa and Australia. Additionally, under a particular clause in the licence agreement, Humantech were prohibited from selling, marketing or distributing competing products.
Sometime later, Thomas wished to terminate the Master Licence Agreement based on the discovery that Humantech had breached the agreement by selling products in competition with that of Thomas’.
In May of this year Mr Schutte, director of Humantech, in settlement discussions made an undertaking that they would do all things required for the transfer of the domain names they used back to Thomas. The parties however could not agree of the terms of the arrangement and Thomas initiated proceedings in the Federal Court for an interlocutory injunction to have the undertaking of the transfer of the domain names enforced.
The Court found in favour of Thomas and ordered the transfer of the domain names from Humantech back to Thomas based on the failure on behalf of Humantech to comply with the undertaking made during settlement. The injunction was also subject to an undertaking given by Thomas that compensation would be provided to any third party who would be inconvenienced by the transfer of the domain names.
The case highlights how the value of domain names is very significant, especially for online businesses. It also brings to light other modes of relief for aggrieved parties under exclusive license agreements, and those seeking domain names to be transferred.
For the full case head click here