What Do You Need to Know About Domain Name Disputes?
from the Chinese Perspective
Domain names are internet addresses, which can act as trademarks, as well as identifiers, indicators, or repositories of corporate goodwill. Once they come into a form of intellectual property, disputes relating to them never end.
WeChat (with a Chinese pronunciation of WEIXIN), the most popular Chinese social messaging app with 600 million users by now, is fighting for the domain name weixin.com. To gain the name, Tencent Company launched a domain name dispute with Hong Kong Office of Asian Domain Name Dispute Resolution Center (ADNDRC). Why is the domain name weixin.com conflicting with the Tencent’s interest? What kind of organization is the ADNDRC? How about the procedure of filing a complaint? Why did Tencent Company choose that procedure rather than a lawsuit? This article will briefly introduce resolutions to domain name disputes and ICANN’s Uniform Dispute Resolution Policy (UDRP) and you may find answers in the below.
Domain Name Disputes and UDRP Test
Domain Name Disputes
A domain name is used as the external code of a network address, and it is an important identification of enterprise or individual on the network. More, there are specific rules to name a domain name. In an English domain name, from right to left, in turn they are top-level domain name, the second-level domain name, and third-level domain name…. For example, in the domain name www.baidu.com, .com is top-level domain name and baidu is second-level domain name, which is the main distinctive part of that domain name. Another example, in www.zte.com.cn, .cn is top-level domain name, .com is second-level domain name, and zte is the third-level domain name, which is the main distinctive part of that domain name.
In reality, lots of enterprises or individuals prefer to use their own trade name or trademark as the main distinctive part of their domain name. In this regard, the right of a domain name is connected with other rights. In practice, domain name disputes are commonly reflected as: the conflicts between a domain name and trademark rights, between a domain name and trade name rights, between a domain name rights and name rights, etc. In the dispute of weixin.com, Tencent Company considers the main part of the domain name “weixin” is conflicting with its trademark rights.
Basis of UDRP
ICANN (the Internet Corporation for Assigned Names and Numbers) is a nonprofit international organization and headquartered in the United States, and responsible for distribution of IP addresses worldwide. ICANN has authorized a number of domain name registrars to facilitate users to domain name registration, such as NET and XINNET in China. The ICANN’s jurisdiction of all domain names is derived from an agreement which is compulsory for a user to sign with its registrar when registering a domain name. In the agreement, there are clauses the user is subject to the jurisdiction of ICANN. And ICANN has made the UDRP and UDRP rules, so the user would be subject to the bounds of the UDRP and UDRP rules.
Until now, ICANN has authorized four administrative organizations to arbitrate domain name disputes worldwide: World Intellectual Property Organization (WIPO), National Arbitration Forum (NAF), Asian Domain Name Dispute Resolution Center (ADNDRC) and Czech Arbitration Court (CAC). ADNDRC has four offices in Beijing, Hong Kong, Seoul and Kuala Lumpur. In the dispute of weixin.com, Tencent Company chose to file a complaint of domain name dispute with Hong Kong office of ADNDRC.
As discussed, the UDRP is an out of court, arbitration-like procedure for intellectual property rights owners to resolve bad faith or abusive registration and use of domain names. To prevail in an UDRP complaint, the complainant must prove each of the following three elements:
The disputed domain name is identical or confusingly similar to a trademark or name in which the complainant has rights;
The respondent have no rights or legitimate interests in respect of the domain name;
The disputed domain name has been registered and is being used in bad faith.
Official Fees for Filing a Complaint in the UDRP
Although the domain name dispute administrative organizations are nonprofit, the procedure would involve an expert panel and other necessary working cost, so the complainant should pay fees. Taking ADNDRC as an example, the applicable fees are specified as follows:
Number of Domain Name involved in the Complaint
1 to 2 domain names
3 to 5 domain names
6 to 9 domain names
10 domain names or more
(to be determined by the relevant office of the ADNDRC)
Comparing with attorney fees for a lawsuit, the cost of filing a complaint with administrative organization is cost-effective.
UDRP Procedure and Result
Take a procedure at ADNRC for example. According to the UDRP, UDRP rules and ADNDRC’s supplementary rules, after a complainant submits a complaint and pays fees, ADNDRC will deliver a formal complaint with the respondent by a fixed format and require the respondent to submit a counterstatement within 20 calendar days. An expert panel will be set and make a decision within 14 days from the date of its establishment.
If one of the three UDRP test elements has found not to be met, a claim would fail. Among the three elements, the requirement of bad faith registration and use is a high burden. Before initiating a domain name dispute, we recommend the complainant considering the availability of all evidence to meet the bad faith standard. The UDRP provides a non-exclusive list of circumstances under which bad faith registration and usage may be presumed, for example the domain name holder has attempted to arbitrage the mark, there exists initial interest of confusion, or the domain name has been registered to disrupt the service of a competitor.
The respondent has certain defenses, such as the domain name was registered in connection with a bona fide offering of goods and services or for a legitimate non-commercial or fair use without any intent for commercial gain, or no consumer confusion or dilution of the complaint’s mark.
A UDRP dispute can result in: the domain name being transferred to the complainant, cancellation of the domain name, or the complaint being denied. Neither monetary damages nor injunctive relief are awarded by UDPR panels. UDRP decisions are mandatory. If either party wishes to appeal the UDRP decision, there is a limited 10 days window in which to file a claim in, for example, a people’s court in China under trademark law or anti-unfair competition law.
UDRP Narrow Scope
However, if the complainant is seeking damages for misuse of the domain name, a lawsuit in courts will have to be taken. Further, the UDRP is limited to complaints of bad faith or commercial use. Thus, if both parties have trademark rights or a legitimate legal interest in the names, a legal action in courts would also be recommended.
Moreover, not all domain name disputes could be settled by UDRP procedures. According to the regulation of China Internet Network Information Center (CNNIC) Domain Name Dispute Resolution Policy, complaints regarding domain name .cn and Chinese domain names with registration term of over (including) TWO years, it could not be accepted by UDRP procedures. Therefore, for those types of domain name disputes, it can only be settled through filing a complaint with courts.
Commonly speaking, there are three ways to settle a domain name dispute: traditional arbitration, lawsuit and the UDRP. Since the traditional arbitration is based on an agreement between the parties, while the parties involved in domain name disputes uually do not have such an agreement, so the ways of relief are mainly a lawsuit and the UDRP.
Chinese Civil Action on Domain Name Dispute
In China, a domain name dispute may be initiated in a people’s court, where Judicial Interpretations on Issues Concerning the Application of Law to the Trial of Civil Dispute Involving Domain Names (“Judicial Interpretations,” 2001) may apply. Specifically, Judicial Interpretations, in Article 4, specify the criteria for the determination of trademark infringement and unfair competition with respect to a defendant’s registration and use of a domain name. The criteria are:
The rights or interests for which the plaintiff seeks protection are legitimate and effective;
The defendant’s domain name or part of it constitutes a copy, imitation, translation or transliteration of a well-known trademark of the plaintiff; or it is identical with or similar to a registered trademark, domain name, etc. of the plaintiff to a degree sufficient to cause confusion to the relevant public;
The defendant does not enjoy rights or interests to the domain name or part of it, and has no justification to register and/or use the domain name; and
The defendant’s registration and/or use of the domain name is in bad faith.
Once the defendant has been found liability for infringement or unfair competition, a people’s court may issue injunction, cancellation of the domain name, or at the request of the plaintiff, transfer of the domain name to the plaintiff, and monetary damages, if any.
Comparison Between Civil Action and UDRP Procedure
In view of the above, there exist differences between a Chinese civil action and the UDRP procedure:
A civil action is a civil proceeding which is governed by the Chinese Civil Procedure Law, while the UDRP procedure is an administrative arbitration proceeding that is not binding on courts;
The UDRP procedure is more efficient and cost-effective to resolve a domain name dispute;
The UDRP procedure is international in scope and provides a solution regardless of the locations of the complainant and respondent;
The UDRP procedure is less formal than lawsuits, but the complainant must submit and establish all facts in a complaint. But for more complex cases where the facts of bad faith must be obtained via e.g., court–ordered evidence preservation or be contested, a civil action is more effective;
An intellectual property rights owner uses a civil action to seek monetary damages; and
The UDRP procedure may not be helpful if a domain name owner does not make use of the domain name to identify any goods or services. Nevertheless, the Chinese trademark law and anti-unfair competition law give courts the flexibility to weigh appropriate factor in determining whether bad faith exists in registering and/or using the domain name.
Returning to the dispute of weixin.com, it is related to domain name .com, so it is not subject to the statutory limitation of two years. Tencent Company’s aim is obviously to gain the domain name in a short time, without involving compensation. Especially, according to our past experience, the chance for a complainant to be supported through a UDRP procedure is very higher than to be rejected. Thus, a UDRP procedure, which is convenient, cost-saving and high efficient, naturally became Tencent Company’s choice.
The newsletter is not intended to constitute legal advice. Special legal advice should be taken before acting on any of the topics addressed here. For further information, please contact one of the attorneys listed below. General e-mail messages may be sent using firstname.lastname@example.org which also can be found at www.lungtin.com.
Ping SUI, attorney at Law, trademark attorney: email@example.com
Qinghong XU, Ph.D., JD, partner: firstname.lastname@example.org
18th Floor, Tower B, Grand Place, No. 5 Huizhong Road, Chaoyang District, Beijing 100101, China
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