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Domain Name Disputes Resolution Alternative
Resolution vs. Litigation
By Vincent Wang, Legal Consultant and Ron
Cai, Resident Partner
Over the past years, with the rapid development of China's information
technology industry, the number of disputes arising from domain names
is increasing in China. This commentary makes a brief review on the
evolution of the Chinese legislation on Internet domain name disputes,
and then focuses on the new judicial interpretation concerning domain
name disputes issued by the Supreme People's Court.
LEGAL EVOLUTION
Compared with the rapid development of Internet technology in China,
the legislation for domain name disputes has been slow. In dealing
with the Internet domain name disputes, people find they can base
their arguments on no special provisions but a few legal principles
in civil law and intellectual property laws. As a result, the demand
for legislation in domain name disputes resolution is on the rise.
In response to such demand, Chinese government has speeded up its
legislation process in this regard and the efforts seem to achieve
their breakthrough recently.
In the recent months, several rules and regulations on Internet
domain name disputes have been promulgated. The Resolution of Disputes
Concerning Chinese-language Domain Names Procedures (Trial Implementation)
promulgated by China Internet Network Information Centre ("CNNIC")
in November 2000 establishes a basic framework for the resolution
of disputes rising from Chinese language domain names through CNNIC.
The Rules on Domain Name Dispute Resolution Procedures (Trial Implementation)
issued later in the same year by China Internet Economic and Trade
Arbitration Commission ("CIETAC") Domain Name Resolution
Center, reduces the aforesaid framework to detailed procedural guidelines
so as to complete the rule-making in CNNIC solution for Chinese
language domain name disputes. In the future, CNNIC solution is
likely to become a practical way to resolve Chinese language domain
name disputes in China. However, after a close look at these two
rules, one may find that CNNIC solution in China has its limitation
in that it is applicable only to the disputes between the Chinese
registered trademark (with the exception of "famous trademark")
holders and the Chinese-language domain name holders. What if a
dispute arises from two domain name holders? What if a dispute arises
between a registered trademark holder and a Chinese holder of an
English domain name? Are there any guidelines for all of the above?
On June 26, 2001, the Supreme People's Court released its Interpretation
on Several Issues concerning Application of Laws in Hearing Civil
Cases Arising from Computer Web Domain Name Disputes (the "Interpretation")
which attempts to answer all the questions the CNNIC solution has
not yet answered. The Interpretation intends to resolve all domain
name disputes under the same procedures, including the acceptability
of case and jurisdiction, as those used for torts or unfair competition.
(The only prominent change in jurisdiction is that domain name lawsuits
must initially be submitted to an Intermediate People's Court.).
Moreover, it attempts to provide a solution in the court system
for all kinds of Internet domain name disputes.
CAUSES OF ACTION
According to Article 1 of the Interpretation, the causes of action
for Internet domain name related cases acceptable by the courts
include disputes concerning the registrations and use of Internet
domain names. Moreover, in accordance with a newspaper interview
with a judge of the Supreme People's Court, the disputes concerning
the registrations and use of internet domain names include the following:
a. disputes between domain names and "famous trademarks";
b. disputes between domain names and registered trademarks;
c. disputes between domain names and trade names;
d. disputes between domain names and special names for famous
commodities;
e. disputes between domain names; and
f. disputes between domain names and names of individuals, etc.
Further, domain names under disputes may be in either Chinese language
or in English language.
Unlike the conservative approach adopted by the CNNIC domain name
dispute resolution rules, which only resolves the disputes between
domain names and trademarks protected in China (including registered
trademarks and "famous trademarks"), the Interpretation
takes a more aggressive approach. Therefore, litigation appears
to be more attractive than CNNIC solution as the latter can only
handle one type of cases, and the result provided CNNIC solution
is not final and is subject to judicial decision if either party
submits the dispute to the People's Court during or after the CNNIC
solution.
GROUNDS FOR COMPLAINT
Article 4 of the Interpretation defines the grounds for complaints
as following:
(1) the civil rights or interests for which the plaintiff seeks
protection are legitimate and effective;
(2) the defendant's domain name or its main part constitutes a
copy, imitation, translation or transliteration of a well-known
trademark of the plaintiff; or it is identical or similar to a registered
trademark, domain name, etc. of the plaintiff to a degree sufficient
to cause mistaken identification among the general public;
(3) the defendant does not enjoy rights or interests to the domain
name or its main part, and has no justification to register and/or
use the domain name; and
(4) the defendant's registration and/or use of the domain name
is in bad faith.
Compared with the CNNIC solution, the Interpretation has two distinctions.
One is that an infringement can be determined even if only the main
part of a domain name infringes upon parts of another domain or
upon other intellectual property right, and not necessarily the
entirety of the domain name. For example, if AAA is a registered
trademark, both the domain name www.AAA.com and the domain
name www.AAA's.com may be considered infringement upon the
trademark, while under the rules of the CNNIC solution, only the
former may be determined as infringement. Such provision actually
expands the scope of cases which could be accepted by the court,
and, in comparison with the rules of CNNIC solution, it also increases
the intellectual property ("IP") owner's possibility to
win the case.
The other difference is that, under the CNNIC solution, in determining
an infringement case the IP owner must prove that business of the
IP owner has been or will likely be adversely affected by the registration
and use of the disputed domain names. The Interpretation, however,
does not have such a requirement. This substantially releases the
burden of proof for the IP owner, and therefore increases the chances
for the IP owner to win the case.
Article 5 of the Interpretation lists four types of "bad faith"
usage. Among those types of circumstances, the fourth type stands
out. Under this circumstance, if defendant registers a domain name
with an intent to prevent the IP owner from registering the name,
and that defendant has neither used the name nor the intention to
use the name, it constitutes "bad faith".
In Article 6 of the Interpretation, the Supreme People's Court
for the first time empowers itself to determine whether a trademark
is a "famous trademarks". However, it will do so only
upon the disputing parties' request.
COMPENSATION
The last two articles of the Interpretation, Article 7 and Article
6, spell out the possible remedies for IP owners and the standard
to determine such remedies.
Article 8 provides three types of remedies:
(1) cessation of the infringement and cancellation of illegal domain
name;
(2) granting the IP owner the right to register and use the domain
name if the IP owner so requests;
(3) award of damages if the IP owner has sustained any actual damages.
The judge of the Supreme People's Court comments that the monetary
damages will not be imposed unless the IP owner proves the existence
of harms.
Taking the Interpretation as a whole, the intention of the Supreme
People's Court is to provide more protection to IP owners than traditional
law and to impose more good faith and due diligence obligations
upon domain name registrants.
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