Competence of courts in domain names disputes with individuals and possibility to terminate violation of exclusive rights via hosting providers or registrars. Latest trends.

1. Competence of the courts of ordinary jurisdiction to hear the domain name disputes with individuals (registrants)

For the past two years, the Russian legal community has been discussing the new trend of changing competence of the courts in cases of violation of exclusive rights in domain name disputes with individuals (who are not individual entrepreneurs). Case practice review No 1 (2014) of the Supreme Court confirmed the competence of the courts of ordinary jurisdiction (sudy obshchey jurisdiktsii) in domain disputes which involve individuals as defendants. The competence for such cases is that of the court of residence of the individual registrant.

Eventually, the commercial courts (arbitrazhnye sudy) started dismissing cases against individuals as defendants, holding that the trademark owners should then file the case with the courts of ordinary jurisdiction. Meanwhile, the courts of ordinary jurisdiction refused to take the lawsuits over holding that such cases fall within the competence of commercial courts, based on an earlier well-developed case-law[12].

Following this new trend, the Supreme Court of Russia in its Ruling № 305-ЭС16-4853 of 1st June 2016[3] confirmed that commercial courts have no competence in domain names disputes with individuals as defendants.

Nonetheless, the commercial courts continue to hear domain name disputes with individuals [4] . When the court of ordinary jurisdiction declines the competence, the commercial court must take over the case in order to ensure the judicial protection of rights[5].

Therefore the trademark owner theoretically has two options as to where to file a case, but may face the need to argue the competence of the court chosen to hear the case. Should the trademark owner receive a refusal to hear the case from the first court where it filed the action, it will need to assert its position in another court (commercial court or court of ordinary jurisdiction) which will be then obliged to take over the case.

2. Choosing the defendant. Registrars of domain names and hosting providers as “information intermediaries”

When trademark enforcement procedures in domain name disputes face obstacles, such as lacking information on an individual, which is not provided by the registrar, the trademark owner may consider as an additional opportunity to file the case also against the registrar or hosting provider.

On 1st August 2013 article 1253.1 of the Russian Civil Code made “information intermediaries” responsible for the violation of exclusive rights (including trademarks). That provision stipulates certain conditions which exempt an intermediary from responsibility in the following cases: 1) the information intermediary did not know and was not supposed to know that the use of, for instance, a trademark was illegal, 2) in case of receipt of the owner’s written notification of a violation of exclusive rights, the information intermediary did take all necessary and sufficient measures in due time for terminating of such a violation.

As to the definition of “information intermediary”, the Russian Civil Code sets certain criteria without, though, identifying specific legal entities. Thus, the courts are developing a case-law on whether hosting providers and registrars are covered by the definition of “information intermediary”.

2.1. Hosting providers

On 21 March 2016, the Supreme Court of Russia in its Ruling No. 307-ЭС16-14146 confirmed that a hosting provider is able and obliged:

• to limit the rights of its customer in relation to hosting services in case of discovering the fact of violation of exclusive IP rights;

• to assist the owner in identifying the infringer (i.e. customer) and such actions may not be deemed in breach of hosting service agreement.

In this case, the hosting provider did not provide information on its customer (infringer) and was held responsible to a compensation in the amount of 100 000 Rub (approximately 1.600 Euro).

2.2. Registrars of domain names (with or without functions of hosting provider)

On 9 December 2015, the IP Court in case No. A40-52455/2015 held that the registrar, apart from the registration service itself, may:

• provide hosting services or

• delegate domains (this means entry of the company which provides hosting services by indication of DNS-server).

In both situations, the registrar has the possibility to access the materials placed on the Internet and furthermore has the possibility to limit (cease, terminate) access to such materials for other Internet users.

Taking into account that the trademark (and other IP) owner notified the registrar on violation of exclusive rights, in order to find the grounds to hold “information intermediary” liable the courts have to establish whether the registrar has taken all necessary and sufficient measures to terminate the violation[7].

The IP Court also held that an IP owner may demand from the registrar (who is also an information intermediary):

• to delete any information violating exclusive rights,

• to limit access to such information,

• to terminate (or suspend) domain name delegation8.

The latest resolution of the IP Court in case No. A40-52455/2015, issued on 8 December 2016, held that the plaintiff did not present enough evidence to prove that the registrar provided hosting services for the domain name concerned, and set aside the resolution of the appeal commercial court which had held the registrar liable and imposed on it a compensation in the amount of 100 000 Rub (approximately 1 563 EUR).

The option to proceed against the registrar (hosting provider) may be also useful insofar as a registrant, who is a natural person, or who is difficult to trace or has no assets or substance, might not be even involved in the case as a defendant or a third party.

Therefore, the IP owner may consider the opportunity to involve registrars and hosting providers as information intermediaries in order to hold them liable or make them delete violating information (or make them limit access to such information).