New amendments to the Russian IP law (codified in Part Four of the Civil Code) substantially alter the approach to domain name protection to the benefit of trademark owners. The relevant federal law will enter into force next week.

The legal regulation of Internet businesses as a whole, and domain names in particular, has always been a sensitive matter in Russia. Despite the undoubtedly high value of dominant names in the Internet, Russian IP legislation specifies neither the legal meaning, nor the status of domain names as intellectual property. In fact, the current edition of the Civil Code, which will be amended by mentioned federal law, refers to domain names only in the following contexts:

1) Owners of trademarks and appellations of origin may enjoy their exclusive proprietary rights by placing the trademarks and appellations of origin into domain names (p. 2 of art.1484 and p. 2 of art.1519). The word ‘exclusive’ allows such owners to prevent any third party from registering and using domain names containing their intellectual property.

2) However, a trademark similar to a domain name shall not be registered if the domain name was registered before the priority period of that trademark (p. 9(3) of art.1483).

The coming amendments completely remove the latter restriction and also make some other changes to the Code’s wording. The reason declared in the explanatory notes to the amendments is that the famous Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS), which, by the way, is not binding on Russia, provides no protection for domain names and, therefore, ‘there is no reason to oppose them to trademarks’. The main goal of amendments, as follows from the notes, is to bring national IP law into accordance with the WTO standards, which will probably help Russia join the organisation.

While the politicians are encouraged by the new amendments to the Civil Code, domain name owners (at least those who have not registered trademarks yet) do not seem very excited about losing an opportunity to refer to the restriction of trademark registration (p.9(3) of art.1483) in domain disputes. The most significant judgment illustrating the application of that provision was delivered by the Supreme Commercial Court of Russia (the highest state court for business litigations) at the end of 2009. The dispute arose between the company LAD-M CJSC, which owned the trademarks ‘LAD-M’ and ‘LADM’ on the one hand, and Mr E. Sarkisyants, the administrator of the domain names ‘lad-m.ru’ and ‘ladm.ru’ on the other hand. Mr Sarkisyants was also the participant and the general director of Lad-M Ltd and used the web-pages for his company’s business. As can be expected, LAD-M CJSC brought an action against Mr Sarkisyants to cease the use of the domain names infringing the trademarks and to receive compensation for such infringement. The Court took into consideration that the domain names were registered before the trademarks’ priority periods and rejected this reasoning of the plaintiff. It should be noted, however, that the defendant finally lost the case and was deprived of his rights to the domain names due to other reasons.

In the summer of 2010, one of the Commercial Appeal Courts, which is subordinate to the Supreme Commercial Court, ignored the legal position of the latter and ruled for the benefit of the trademark owner in a similar case. Such conflicting decisions are rather rare, but are possible in Russia due to the absence of a firm stare decisis doctrine. Nonetheless, the Appeal Court hinted that the defeated administrator of the domain name kept the right to contest the trademark registration based on one and the same restriction specified in p. 9(3) of art.1483 of the Civil Code.

The amendments rule out both the Supreme Commercial Court’s practice and the opportunity to nullify registrations of trademarks replicating domain names created beforehand. At the same time there will be no obstacles for the registration of new trademarks identical to already existing domain names. Hence, any company or individual businessman will be authorised to register trademarks for classes of goods that are mentioned on the web-page with the ‘targeted’ domain name. The registration provides the owner of the new trademark with the right to judicially prohibit the domain name administrator from using his domain name in respect of the goods of that class. Upon the adoption of a judgement in favour of the owner of a trademark, the administration rights to the domain name would naturally be terminated. Then, the trademark owner will get the priority right to obtain the domain name as it follows from the Terms and Conditions of Domain Names Registration under Domain .RU.

From this angle, the amendment to Part Four of the Civil Code will be very similar to the rules of the old Russian Law on Trademarks, Servicemarks and Appellations of Origin that was effective before the adoption of the Code on 1 January 2008. When this law was in legal force, such scenarios of domain name squatting used to be successfully applied in business practice and were considered legal by the courts.

In conclusion and as outlined above, while trademark owners will get better tools to intervene in domain names similar to their brands, the administrators of attractive domain names should even more carefully think about additional protection of their interests. This being the case, we foresee the need for companies operating in Russia and using Russian domain names to adjust their brand protection strategies, and registering intellectual property that can be placed into domain names (e.g. trademarks) might be the right way forward