European Court of Justice, Decision of 19 July 2012, No. C-376/11, "lensworld.eu"
The European Court of Justice (CJEU) decided that the registrations of .eu domain names during the "sunrise period" (the initial registration period for trademark owners) by EU-based agencies on behalf of trademark owners not established in the EU do not meet the relevant statutory requirements. Domain names obtained in this way will now be vulnerable to revocation by EURid.
The top level domain .eu was introduced in 2005 with the aim to establish for companies, organizations and individuals a noticeable relation with the European market. Therefore, only designated domain name holders with an establishment in the territory of the EU are entitled to apply for .eu domain names. In order to avoid speculative and abusing registrations, the new top level domain was implemented in a phased registration process. According to Regulation No. 874/2004, the first phase of the registration period (the "sunrise period") was specifically set up for Community based trademark owners and their licensees to register their trademarks as .eu domain names.
Pie Optiek, a Belgian company selling contact lenses, glasses and other optical products on the Internet, owns the Benelux figurative trademark LENSWORLD.
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Walsh Optical, a U.S. based company, also selling contact lenses, spectacles and related items on the Internet, owned the Benelux trademark LENSWORLD (in the meantime deleted) but did not have an establishment within the EU. It entered into a "License Agreement" with Bureau Gevers, a Belgian firm specialized in IP consultancy services, and commissioned it to register a corresponding .eu domain name on behalf of Walsh Optical.
On the first day of the sunrise period, 7 December 2005, Bureau Gevers applied at EURid in its own name but on behalf of Walsh Optical for the registration of the domain name lensworld.eu. Pie Optiek applied for the registration of lensworld.eu on 17 January 2006, i.e. still within the sunrise period. However, since it filed its application in the first place, the domain name was allocated to Bureau Gevers.
Pie Optiek challenged the allocation, claiming that Bureau Gevers, although established in the EU, could not be regarded as a licensee of the trademark under Regulation 874/2004 and, thus, was not entitled to register the .eu domain name within the sunrise period exclusively designed for EU based trademark owners and their licensees.
The Cour d'Appel de Bruxelles referred the matter to the European Court of Justice for a preliminary ruling on whether the term "a licensee" includes a person or entity authorized by a trademark owner solely to register a domain name on behalf of the trademark owner.
The CJEU ruled that agreements on domain name registrations in return for payment cannot be considered as license agreements but, instead, as sole service contracts. The registration of .eu domain names is reserved for rights owners established in the EU. The sunrise period was only to be used for registrations by either EU based trademark owners or licensees. If a supposed "license" was limited to a domain name registration order, this agreement did not constitute a license under Regulation No. 874/2004. Consequently, the statutory requirements of the Regulation were not fulfilled and a registration within the sunrise period could not be permitted.
The decision strengthens the rights of EU based companies with regard to .eu domain name registrations. Domain name registrations during the sunrise period by EU based service providers on behalf of companies not established in the EU do not meet the relevant requirements and, accordingly, can be challenged and get revoked by EURid.
The decision is of particular importance with regard to several generic .eu domain names. EU based companies who failed to register domain names due to prior registrations of companies established outside the EU may now be in a position to request the tramsfer of the domain names.