Mandatory pre-trial settlement, preliminary (interim) measures, compensation for violation of exclusive right to a trademark in domain names disputes: latest trends of legislation and practice.

1. Mandatory pre-trial settlement in domain name disputes

The Russian judicial system basically consists[1] of commercial courts (arbitrazhnye sudy) and courts of ordinary jurisdiction (sudy obshchey jurisdiktsii) having each different areas of jurisdiction. The procedure in these judicial branches is regulated by different codes, i.e. the Russian Arbitration Procedural Code and the Russian Code of Civil Procedure respectively.

Since 11 June 2016 all disputes arising out of civil law relations, including domain names disputes, are subject to mandatory pre-trial settlement within procedure in state arbitration (commercial) courts.

Trademark owners may face some difficulties upon the trademark enforcement within domain name disputes, especially when the defendant is an experienced cybersquatter. Such difficulties may concern:

  • the timeframe of a pre-trial settlement, which is of 30 days from the date of the cease and desist letter (hereinafter also – “claim”) and the lawsuit may not be submitted to court before expiration of this term;
  • the fact that court shall check first, whether the pre-trial procedure was observed and, if it was not, may reject the lawsuit or leave the lawsuit without action.

The trademark owner and its representative(s) must provide evidence of the claim and forward it to the appropriate defendant with a copy of the power of attorney.

Conversely, the Russian Civil Procedure Code does not provide for the same mandatory pre-trial procedure for domain name disputes.

Therefore, the trademark owner may choose to apply to the court of ordinary jurisdiction in case the defendant is an individual.

Draft law No. 32493-7, setting out a pre-trial settlement procedure in relation to certain intellectual property disputes and domain name disputes, has recently been passed in first reading in the Russian State Duma. The main concepts of the draft law are:

  • the forwarding of the claim is mandatory only when compensation/damages are claimed;
  • the forwarding of the claim is mandatory only when the IP owner and infringer are legal entities or/and individual entrepreneurs.

If such amendments are enacted this will positively impact on trademark enforcement in the domain names field as far as the above-mentioned claims may be filed to the commercial courts (which are usually more competent to resolve these disputes) without any mandatory pre-trial settlement.

2. Preliminary (interim) measures in domain name disputes

Preliminary (interim) measures in domain name disputes are aimed at preventing the change of registrars and/or registrants during the proceedings and a result, ensure the execution of the court decisions.

The current mandatory pre-trial settlement procedure in domain name disputes makes the resort to preliminary measures less effective.

In particular, the lawsuit must be filed within 15 days following the date of the court’s ruling on preliminary measures. However, a lawsuit may be submitted not earlier than after the expiration of 30 days’ term from forwarding the cease and desist letter.

It follows that it is possible to apply for preliminary measures only when a potential defendant has already received the cease and desist letter.

Draft law No. 32493-7 introduces the following steps in order to observe the mandatory pre-trial procedure

2.1. The future plaintiff submits an application for preliminary (interim) measures without forwarding first the cease and desist letter to the counterparty.

2.2. Then the court prescribes by its ruling prescribes

  • the timeframe (no more than 15 days) within which to forward the cease and desist letter to the counterparty;
  • the timeframe (no more than 5 days in addition to the timeframe for mandatory pre-trial procedure), within which to submit of the lawsuit based on such a cease and desist letter.

This change will positively impact on the availability of preliminary (interim) measures in domain name disputes.

3. Compensation for violation of exclusive trademark rights by holding a domain name without a website

On 20 January 2017, the IP Court ruled on case No. А21-10484/2015 on domain name “saucony.ru”. This resolution gave rise to a new trend in the field of disputes against individuals registering domain names identical to trademarks without utilizing them by any website. The IP Court imposed a 300.000 Rub (approximately 5.000 Euro) compensation for registering a domain name identical to the trademark, without utilizing it by any website. By ordinary standards, the amount was high for a simple registration. The grounds were as follows:

  • the defendant caused damages to plaintiff’s business reputation;
  • the defendant caused damages to plaintiff because a number of visitors (potential customers) of the defendant’s official website entered the blank site of the defendant, instead of visiting the real website of the plaintiff;
  • the defendant abused the right to the domain name by a conduct was of long duration (in that case more than 12 years);
  • the intent to violate the exclusive right was proved by the fact that at the time of registration of the domain name the defendant was able and supposed to know about the existing registration of the trademark, identical to the word chosen as a domain name.

This resolution confirms the IP Court’s case-law[2] in sense that the registration itself of a domain name identical or confusingly similar to a trademark may be recognized as a violation of an exclusive right to a trademark.

This resolution provides for the possibility to recover substantial compensation for the mere holding of a domain name identical or similar to a trademark.