Introduction Domain names IP issues UDRP principles Litigants Legal remedies Comment

Introduction

Domain names are powerful online branding tools. They function as online business identifiers, helping companies to conduct e-commerce and promote their brands on the Internet. In practice, domain names operate as digital trademarks, serving to identify the rights holder's activities and distinguish its goods and services in various segments of the market.

While the Russian domain name registration procedure may seem easy, domain names are always at risk – especially when they overlap with traditional IP rights (eg, trademarks) belonging to third parties. Nearly all domain name conflicts result in dispute resolution involving national and international principles of law and practice. Where the dispute is subject to Russian jurisdiction, a reliable and efficient domain name litigation process is available to rights holders.

Domain names

Numerous Russian laws and regulations provide a definition of a 'domain name'. From an internet standpoint, a domain name is a symbolic identification designated to the network address in which the domain name system is used.(1) From an IT perspective, a domain name is a symbolic identification designated to a web address for the purposes of accessing data on the Internet.(2) Finally, in an IP context, a domain name is a type of address on the Internet.(3) When reviewing these definitions, it is clear that a domain name is an IT asset which represents an individual website or data address on the Internet.

Although the Internet Corporation for Assigned Names and Numbers has implemented the movement towards new generic top-level domains (gTLDs) and some innovative Cyrillic 'strings' have already been launched and delegated (eg, '.??????' ('.online') and '.????' ('.site')), some national domain names should not be disregarded, including:

  • national country code top-level domains (ccTLDs);
  • geographical strings, also known as 'geodomains' (eg, '.msk.ru', '.spb.ru' and '.sochi.su'); and
  • various other domains, such as '.com.ru', '.org.ru', '.net.ru' and '.pp.ru'.

The most popular domain names are the ccTLDs '.ru', '.??' and '.su'. As such, a majority of local domain name disputes arise in relation to these ccTLDs.

IP issues

Domain name disputes usually occur due to unauthorised registration or use of a domain name that is identical or similar to a registered trademark or company name. Trademarks and company names must enjoy legal protection in Russia in order to be enforced. In other words, a trademark owner will have a valid cause of action against unauthorised domain name registration or use only if its trademark rights have been:

  • duly registered in Russia at the national trademark application level; or
  • extended to Russia under an international trademark registration.

The owner of a company name will have a valid cause of action against unauthorised domain registration or use only if its company name has been registered:

  • with the so-called 'uniform state register of legal entities' (ie, the local registry of companies) if it is a domestic company; or
  • in accordance with Article 8 of the Paris Convention (ie, no additional local registration) if it is a foreign company.

A foreign company's name must be well known among the relevant customers in the Russian market and actively used in Russian commerce in order to be asserted in a domain name infringement claim. Unless an unregistered mark has acquired a special well-known status from the Russian Patent and Trademark Office, it will not be enforceable against any unauthorised domain registration or use. Common law rights, or rights based merely on a brand's commercial use and reputation, are not generally recognised in Russia. Hence, domain name actions must be brought by rights holders or company name owners whose exclusive IP rights are duly protected and valid in Russia.

UDRP principles

One key distinction of Russia's domain name dispute resolution practice is that the Uniform Domain Name Dispute Resolution Policy (UDRP) does not apply to Russian ccTLDs, geodomains or other Russian third-level domain names. In addition, no administrative or arbitral proceedings to recover a Russian domain name similar to those available under the UDRP are available under national laws. Therefore, judicial proceedings (ie, civil action) remains the only feasible enforcement option for a brand owner to recover an infringing domain name, unless it has had a chance to stop the infringement and acquire the conflicting domain name in a non-judicial manner (eg, under a cease-and-desist letter).

In practice, the Russian courts recognise the UDRP three-factor test and will enforce the transfer of a litigious domain name in favour of a claimant if it can prove that:

  • the conflicting domain name is identical or confusingly similar to a trademark in which it has rights;
  • the respondent has no rights or legitimate interests in respect of the conflicting domain name; and
  • the respondent's domain name has been registered and is being used in bad faith.

Hence, these basic UDRP principles are used extensively by trademark owners in Russia in clear-cut trademark infringement matters in which domain names operate with no web content.

Cease-and-desist letters have become mandatory by law and there are many advantages to issuing such a letter before commencing a civil procedure. Following receipt of an infringement warning, an infringer's further ignorance may serve as additional evidence of its illegal conduct or intention to infringe. Further, the infringer may cease the infringement immediately and transfer the conflicting domain name to the brand owner right away. Finally, the infringer may try selling the conflicting domain name by sending an offer to the IP rights holder, which may serve as valid proof of the infringer's bad faith after all.

In addition, if the brand owner's main goal is to obtain monetary compensation for the IP infringement, serving a cease-and-desist letter to the infringer is advisable purely from a technical and pre-trial perspective. However, in practice, infringers are quite reluctant to pay on demand. Hence, in the majority of domain name conflicts, an effective judgment or court order establishing infringement will be required to get money from the infringer.

Litigants

The following parties have legal standing to sue in Russian domain name disputes:

  • registered trademark and company name owners;
  • registered assignees and successors in title; and
  • registered exclusive trademark licensees.

Unregistered brand owners, registered non-exclusive licensees and other authorised users (eg, distributors and agents) cannot enforce IP rights in Russia. However, they can join a civil procedure as third parties in order to support the plaintiff's claims. If the domain name infringement matter is initiated by the valid assignee or exclusive licensee, the appropriate registered assignments or exclusive licences must be disclosed during litigation.

Domain name owners (ie, registrants) bear sole liability for the choice of domain name and are responsible for any infringement of third-party rights and liable for damages. As such, a civil lawsuit must be filed with the competent court against the domain name registrant. If the conflicting domain name has been delegated to a website that sells trademarked or similar goods or is involved in business activities similar to those provided under the protected company's name, a claim can also be brought against the seller of such goods, as it bears joint and several liability. As affirmed by local court practice, there is no need to sue domain name licensees, as domain registrants (ie, licensors) cannot shift their liability for IP infringement by way of a contract.

Under common law, a civil lawsuit must be launched in the defendant's domicile. Should a foreign individual or company be recorded as the domain name owner, it might be wise to bring a claim against the national domain registrar (ie, the co-defendant), in order to establish Russian jurisdiction over the dispute at issue. In all other cases, national domain registrars will normally be engaged as third parties in domain conflicts, as they will be in charge of the domain name transfer process after the issuance of a court order in favour of the plaintiff.

Legal remedies

In general, numerous legal remedies for IP infringement matters are available to IP holders under Russian law. However, the most popular remedies in domain conflicts are:

  • injunctive relief (preliminary and permanent); and
  • monetary relief (regular or statutory damages).

Preliminary injunctions and temporary restraining orders ordinarily extend to different prohibitions, including with regard to transferring a litigious domain name to a third party (ie, a domain registrant) and cancelling the litigious domain name while the court proceedings are pending.

Permanent injunctions and final enjoinments typically relate to the termination of the claimed infringement (ie, the illegal use of the trademark or company name) or the cessation of administration of the conflicting domain name by the defendant. As a result, the plaintiff will be given the so-called 'pre-emptive right' to register the litigious domain names in its own name in order to become a valid domain name owner. Unfortunately, no automatic transfer of the litigious domain name will occur under the court ruling.

Damages may also be claimed and awarded in domain conflicts. While regular damages are rarely used in practice because they are regarded as burdensome legal remedies, monetary compensation (equivalent to the US concept of statutory damages) is more common. To get regular damages, a brand owner must prove:

  • the amount of sustained damages (eg, lost profits) by disclosing the appropriate method of calculation of the damages;
  • that infringement occurred by proving the illegal activities of the infringer; and
  • the nexus between the damages and the infringer's illegal activities.

If the plaintiff omits or fails to demonstrate one of these factors, damages will not be awarded by the court.

Conversely, to receive statutory damages (ie, monetary compensation), the plaintiff must prove only the claimed IP infringement and is not required to disclose any documentation showing the method used to calculate its losses, even though it may be useful to establish the exact amount of the claimed monetary compensation.

In accordance with the law, when claiming statutory damages in trademark infringement matters, including domain conflicts, IP holders can seek:

  • between Rb10,000 ($150) and Rb5,000,000 ($75,000);
  • double the cost of the counterfeit goods; or
  • double the cost of the lawful (ie, licensed) trademark usage.(4)

The trademark owner can usually choose the appropriate option. However, in the absence of a large quantity of counterfeit goods being purchased from the website with the litigious domain name and an underlying licence agreement detailing the appropriate licence fees, trademark owners must choose the first option and the court will decide on the concrete amount of the award based on the nature of the infringement.

Comment

There are several reasons why domain name disputes occur. A rights holder may seek dispute resolution based on infringement of its registered trademark or company name or limitation of its IP rights, or it may bring a claim based on the doctrine of bad faith (ie, unfair competition) and the threat of infringement. Another reason could be that an unauthorised domain registration and the associated web content damage a rights holder's business reputation. Ultimately, every domain name litigation procedure depends on the legal grounds at issue and the circumstances surrounding the case. Rights holders should be sure to take their lawyers' qualifications and experience into account.

For further information on this topic please contact Sergey Medvedev at Gorodissky & Partners by telephone (+7 495 937 6116) or email (medvedevs@gorodissky.ru). The Gorodissky & Partners website can be accessed at www.gorodissky.com.

Endnotes

(1) Section 1.1, Terms for Domain Name Registration in .RU and .?? Domains, effective as of November 12 2013.

(2) Article 2(15), Federal Law 149-FZ, July 27 2006, On Information, Information Technologies and Information Protection.

(3) Article 1484(2)(5), Civil Code, Part IV, effective as of January 1 2008.

(4) Article 1515(4), Civil Code, Part IV, effective as of January 1 2008.

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