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PRC Government Starts to Implement New Rules on
Domain Name Registration and Dispute Resolutions
by
Ron (Rongwei) Cai
[October 2002]
On September 30, 2002, three new sets of rules
concerning domain names became effective in China. The Ministry
of Information Industry promulgated the PRC Rules for the Regulation
of Internet Domain Names (the Domain Name Rules). The other
two were issued by the China Internet Network Information Center
(CNNIC): CNNIC Rules for Domain Name Dispute Resolutions (the Dispute
Resolution Rules) and CNNIC Procedural Rules for Domain Name Dispute
Resolutions (the Procedural Rules). The Dispute Resolution Rules
replace the original CNNIC Rules for Domain Name Dispute Resolutions
(Trial Implementation), issued in November 2000.
General Rule -- First to Apply Has Priority
Article 16 of the Domain Name Rules provides that
the first applicant for a domain name has the priority right over
the other applicants and users. Article 17 further provides that
a registration authority may provide a certain period of time during
which the first applicant may extend its domain name registration
to certain related words. Other than the aforementioned exception,
no reservation of a domain name is permitted.
Exception - Infringement Upon IP Owner's Rights
The Dispute Resolution Rules set forth the following
exception for the "first to apply" rule:
(a) if the domain name is confusingly similar
to an existing name or logo over which another person has intellectual
property right;
(b) if the owner of the domain name does not have the intellectual
property right over the domain name or the principal portion of
the domain name; and
(c) if the owner of the domain name registered or uses the domain
name in bad faith. Bad faith is further defined as one of the following:
(i) the purpose of the ownership is to sell,
license or otherwise assign the domain name to gain improper benefits;
(ii) repetitively registers other persons' name or logo as its
own domain name to prevent such other persons from using its own
name or logo on the Internet; or
(iii) registers or owns a domain name for the purpose of damaging
another person's reputation, or to disrupt such other person's
normal operation, or to confuse the identity with that of the
other person, and to mislead the general public.
In addition, in the Several Issues Concerning
the Application of Law to the Trial of Civil Dispute Cases Involving
Computer Network Domain Names Interpretations issued by the
Supreme People's Court (SPC) on July 17, 2001, the SPC also set
forth additional circumstances under which a court may cancel a
registered domain name:
(i) the domain name is identical or substantially
similar to a "famous trademark" protected by the PRC
Trademark Law, and if such a domain name registration or ownership
is for a commercial purpose (it is unclear why "commercial
purpose" is a factor here); or
(ii) the owner of the domain name fails to use the domain name
after its registration, and has no intention to use it. Rather,
the domain name owner's true intention is to prevent the IP owner
of the name or logo from using such name or logo. Unlike CNNIC's
Dispute Resolution Rules (see (c)(ii) supra), the SPC does
not require a "repetitive pattern" to cancel the domain
name registration under this circumstance.
Names Not Registerable
The Domain Name Rules also set forth a list of
overly broad and undefined activities that are prohibited when using
a domain name. The list includes: opposing the fundamental principles
of the Constitution; endangering national security, exposing state
secrets, engaging in sabotage against the government or threatening
national unity; damaging national honor or the national interest;
inflame hatred; creating or broadcasting false statements; defaming
other persons; and broadcasting pornography, violence, gambling,
horror, etc. These provisions show that the government is serious
about strengthening its control on the media and promoting an official
ideology.
Dispute Resolutions
Currently a domain name dispute can be resolved
through one or two of following methods.
One possibility is arbitration through a CNNIC-certified
domain name arbitration tribunal. Currently the China International
Economic and Trade Arbitration Commission (CIETAC) and the Hong
Kong International Arbitration Centre (HKIAC) are the first two
arbitration organizations certified by CNNIC to handle disputes
related to ".cn" and Chinese domain name disputes.
Another avenue open is arbitration through another
arbitration organization. Although the Dispute Resolution Rules
state that domain name disputes are handled by CNNIC's certified
arbitration organization, the same rules also provide that the parties
are free, by their own agreement, to submit a dispute to any other
arbitration organization.
A third option is a lawsuit filed with a Chinese
court that has the proper jurisdiction. Either party to the domain
name dispute may at any time during the CNNIC-certified arbitration
tribunal's proceeding, or within 10 days after it issues an arbitration
ruling, file an arbitration application with any Chinese arbitration
organization (if both parties so agree) or a lawsuit with the court
having the jurisdiction over the district in which CNNIC is located
(Haidian District People's Court of Beijing Municipality as the
trial court, or the First Intermediate People's Court of Beijing
Municipality as the trial court if the case is foreign-related).
As CIETAC or HKIAC arbitration is neither mandatory
nor final, thus its effectiveness is questionable. CNNIC's decision
to subject HKIAC's ruling to a Beijing local court's review also
seems to be politically problematic. It is foreseeable that many
parties will continue to directly submit their disputes to Beijing
courts for final resolution.
A Loophole: Infringement Through Search Engine
Registration
Bad faith registrations involving registration
of website links with search engines, particularly Chinese language
search engines, is rife. Some entities have registered their websites
with search engines with words identical or substantially similar
to a famous trademark or business name. If such registration is
completed, when one uses such name or words to search, the search
engine will offer results that are totally unrelated to the famous
trademark or business name. So far there does not seem to be special
legislation that would cover this violation. Someone seeking redress
may try to use existing anti-unfair competition laws. The SPC also
states that using a domain name similar to that of someone else
in order to attract viewers to visit the wrongdoer's own website
belongs to "bad faith" registration or use. See Article
5 (2) of the Several Issues Concerning the Application of Law
to the Trial of Civil Dispute Cases Involving Computer Network Domain
Names Interpretations. However, neither of them specifically
and clearly invalidates such infringement acts through search engine
registration. It would be more ideal to cover an offense in an Internet
related law.
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