Transfer or cancellation

Procedure

What is the typical format for a cancellation or transfer action in court litigation (domains registered in either a ccTLD or a gTLD) and through ADR (ccTLD only)?

Alternative Dispute Resolution (ADR), such as the Uniform Domain Name Dispute Resolution Policy (UDRP) or the Uniform Rapid Suspension System (URS), does not apply to .ru ccTLDs and related infringement matters. Thus, domain name cancellations or transfers – in the case of disputes – are usually achieved based on the effective intellectual property (IP) infringement or unfair competition court decision.

In this regard, the forum will be a commercial court.

The IP infringement or unfair competition case must be filed in the court located at the residence of the defendant (the registrant). If there are several defendants (eg, the registrant and the person who uses the domain or website) resident in different regions (ie, giving rise to several courts potentially competent over the dispute), the plaintiff may choose one of them to establish jurisdiction.

Once the competent court institutes proceedings, there will be preliminary hearings and hearings on the merits. Each party is obliged to prove its arguments, and the court may ignore all pieces of evidence that were not provided in a timely fashion or duly provided during proceedings. Discovery proceedings at the pretrial stage are not available.

If the court acknowledges an IP infringement or unfair competition, the domain name is subject to cancellation based on the court decision, and the plaintiff has priority (pre-emptive right) to register the litigious domain name in its own name within 30 days from the moment the court decision has become effective.

For various gTLDs, including new-era domains, ADR proceedings (such as UDRP and URS) are generally available; however, it is also possible to litigate gTLDs in the Russian courts.

Choosing a forum

What are the pros and cons of litigation and ADR in domain name disputes? What are the pros and cons of choosing a local forum to litigate a gTLD dispute compared with the ICANN ADR format for the gTLD?

ADR does not apply to disputes involving .ru ccTLDs. However, ‘non-traditional’ ADR proceedings (cease-and-desist letters, amicable (non-judicial) settlements, domain name transfer negotiations, etc) have proven to be quite effective brand protection mechanisms in terms of timing and costs in certain instances. Local forum and court proceedings are usually a more efficient and stronger enforcement option compared with other international ICANN or ADR proceedings, especially in terms of the ability to recapture the litigious domain name and obtain monetary relief from an infringer (domain name registrant).

Appeal

What avenues of appeal are available?

The following appeal venues are generally available in consideration of the case by a commerical court:

  • appellate courts, which review the evidence in the court files and new evidence if there is a reasonable excuse for not submitting it in the first-instance court;
  • first cassation appeal – the Russian IP Court, which hears cases on the existing case records and does not re-evaluate the evidence and facts located in the court files;
  • second cassation appeal – the Economic Board of the Russian Supreme Court, which has no power to re-evaluate evidence and facts located in the court files; and
  • supervision appeal – the Supreme Court of the Russian Federation, which is entitled to review and ascertain whether there has been a substantial breach in law enforcement.
Who may claim

Who is entitled to seek a remedy and under what conditions?

Generally, the valid rights holder (eg, trademark owner), its recorded assignee or recorded exclusive licensee are entitled to seek injunctive and monetary relief, provided their rights and legitimate interests are affected owing to the domain name registration or use. Non-exclusive licensees, distributors or other authorised IP users do not have the same privilege.

Who acts as defendant

Who may act as defendant in an action to cancel or transfer a gTLD in local courts?

The first defendant in such an action will be the registrant. The actual domain name user (eg, website owner) may be the second defendant and will bear the joint and several liability associated with the IP infringement or unfair competition. Hosting providers and local registrars may also stand as co-defendants in certain exceptional cases (eg, a case involving a foreign registrant).

Burden of proof

What is the burden of proof to establish infringement and obtain a remedy?

Russia does not adhere to UDRP. However, the national court system supports the international principle of unfair competition repression and applies the three-factor UDRP test through the implementation of article 10-bis of the Paris Convention for the Protection of Industrial Property. In other words, in a clear-cut IP infringement or unfair competition matter, the following factors must be proven by the plaintiff:

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

 

Importantly, in a classic domain name dispute, the plaintiff must prove the following three fundamental factors:

  • the priority of the trademark over the domain name;
  • the similarity between the trademark and the domain name; and
  • the similarity of the trademarked (registered) goods and the goods offered for sale (sold) on the website under the domain name.

 

If one of these factors is not properly demonstrated by the plaintiff – whether under the first or the second scenario – IP infringement or unfair behaviour will not be established by the court, and remedies will not be awarded.

Essentially, in asserting an IP infringement or unfair competition claim, the plaintiff must act in good faith to avoid unfair hijacking of the conflicting domain name. Abuse of rights will lead to dismissal of the case.

Remedies

What remedies are available to a successful party in an infringement action?

In terms of remedies, an injunction would be the most appropriate legal relief according to local practice. Statutory damages (ie, compensation) are popular remedies as well. Publication of the court order is also regarded as a feasible relief, but it is not usually sought in domain name actions. Seizure and forfeiture of counterfeit or grey-market goods (in certain instances) will be available for serious IP infringements or unfair competition matters on the internet in cases involving domain name disputes.

Injunctive relief

Is injunctive relief available, preliminarily or permanently, and in what circumstances and under what conditions?

Procedurally, the plaintiff is entitled, before filing a lawsuit or simultaneously with filing the lawsuit, to file a preliminary injunction motion with the court to block the potential transfer or cancellation of the domain name. The plaintiff must condition the granting of the preliminary injunction by arguing that not granting it may make it harder or even impossible to enforce the effective court decision. Prevention of substantial damages will also be regarded as a valid condition to obtain a preliminary injunction. Permanent injunctive relief will be awarded by the court if the plaintiff is able to evidence and prove IP infringement or unfair competition. The pre-litigation procedure taken before the respective domain registrar and aimed at freezing or locking the conflicting domain name is effective for 14 calendar days and will also be feasible, provided that a warranty for indemnification is given by the rights holder in the corresponding motion.

Calculating damages

How is monetary relief calculated?

Monetary relief is normally claimed and awarded in domain name conflicts. While regular damages are rarely used in practice, statutory damages (ie, compensation) are very popular.

Indeed, to get regular damages the plaintiff (ie, trademark or company name owner) must prove the following factors:

  • the amount of damage sustained (eg, lost profits) by disclosing the appropriate method of calculating them;
  • the fact of the IP infringement by proving the illegal activities of the infringer; and
  • the nexus between the calculated damages and illegal activities of the infringer.

 

If one of these factors is omitted or is not demonstrated by the plaintiff, damages will not be awarded by the court. At the same time, to receive statutory damages the plaintiff needs to prove only the fact of the claimed trademark infringement. In addition, it is not required to disclose any evidence by showing the method of calculation of losses, even though it may be useful to a certain extent, when large amounts are claimed.

Legally, there are three different avenues that trademark owners can select and follow when seeking to obtain monetary relief in domain name disputes:

  • an amount between 10,000 and 5 million roubles;
  • double the cost of the counterfeit goods; or
  • double the cost of the lawful (licensed) trademark usage.

 

In practice, the choice of the appropriate monetary compensation formula will be vested with the trademark owner, although in the absence of a large quantity of counterfeits or grey-market goods (if applicable) being offered or purchased from the conflicting websites under litigious domain names, or the underlying recorded trademark licences with the stipulated licence fees, trademark owners will normally have to rely on the first scenario described above, while the court will finally decide on the concrete amount of the award based on the nature of the IP infringement (if established).

Company name owners are not entitled to seek statutory damages, although they can remedy regular damages (eg, lost profits).

Criminal remedies

What criminal remedies exist, if any?

Criminal remedies associated with trademark infringement matters do exist and may be sought by the rights holders. The usual sanctions will be any or all of:

  • a criminal fine;
  • forced labour; and
  • corrective works.

 

In exceptional cases, imprisonment may be imposed by the court. In practice, criminal remedies are sought in cases that are more related to counterfeit trademarks, or goods and products offered for sale and sold by counterfeiters in large quantities or repeatedly, including online (ie, under the conflicting domain names). In other words, substantial damages or repeated trademark infringement must be shown in these types of action.

Limitation period

Is there a time frame within which an action must be initiated?

The general limitation period is three years, starting from the moment the plaintiff became aware or should have become aware of the infringement of its IP rights or unfair competition. Domain name action is not an exception.

Expiry of rights and estoppel

Can a registrant’s rights in a domain name expire because of non-use? Can a registrant be estopped from bringing an infringement action? In what circumstances?

A registrant’s rights in a domain name will not expire because of non-use. The registrant will keep domain-related rights for as long as the domain name registration is renewed. At the same time, a registrant cannot be recognised as an IP infringer on the grounds of expiry of the limitation period, abuse of the plaintiff’s rights, non-extension of asserted trademark rights or in other material and procedural circumstances.

Time frame for actions

What is the typical time frame for an infringement action at first instance and on appeal?

The typical time frame for an IP infringement action to be taken at the first-instance court will be around four to six months. Appeal proceedings, if commenced later, will add another three to four months to the action. Further cassation or appeal proceedings, if continued, will make it a year for the domain name litigation.

Case law

Is a case law overview available on procedural or substantive issues? Does the case law have a precedential value?

Russia is not a case-law country. In other words, a court decision will not have a precedential value, or be treated as a source of law. At the same time, the Supreme Court of the Russian Federation, as well as the former Supreme Commercial Court of the Russian Federation, has (or had) competence to issue clarifications, guidance and orders, which must be treated as binding for all lower courts. In practice, lower-instance courts prefer to follow the approaches developed and tested by the local high courts. Domain name litigation is a good example of this point.

Appointment of panellists

Can parties choose a panellist in an ADR procedure involving a ccTLD? Can they oppose an appointment?

ADR procedures, such as UDRP or URS, are not applicable to .ru ccTLDs. Domain names involving .ru (or other local) zones must be litigated before the commercial courts or courts of general jurisdiction (as applicable). The appointment of a panellist (judge) by the parties is not applicable in either national commercial or civil dispute resolution procedure, although they can oppose this by trying to disqualify (recuse) the appointed judge during the court trials.

Costs

What is the typical range of costs associated with an infringement action, including pre-litigation procedures, trial or ADR, and appeal? Can these costs be recovered?

There is no typical or standard range of costs associated with IP infringement actions, unfair competition claims and cases involving pre-litigation procedure or amicable settlements towards conflicting domain names. These costs will usually be based on court fees, professional lawyers’ or attorneys’ fees, expert fees (if any) and other disbursements (eg, travel and accommodation expenses). Each particular domain name case must be individually reviewed and assessed depending on the circumstances surrounding it. Legal costs (including attorneys’ fees) are recoverable, although always within reasonable limits and at the discretion of the court.

Law stated date

Correct on

Give the date on which the information above is accurate.

09 March 2021.