Domain Name Disputes: Alternative Resolution vs Litigation

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, in either Chinese or English. Moreover, in accordance with a newspaper interview1 with a judge of the Supreme People's Court, the disputes concerning the registrations and use of internet domain names include the following:

(1) disputes between domain names and "famous trademarks";

(2) disputes between domain names and registered trademarks;

(3) disputes between domain names and trade names;

(4) disputes between domain names and special names for famous commodities;

(5) disputes between domain names; and

(6) disputes between domain names and names of individuals, etc.

Unlike the conservative approach adopted by the CNNIC domain name dispute resolution rules, which only resolve the disputes between domain names and trademarks protected in China (including registered trademarks and "famous trademarks"), the Interpretation takes a more aggressive approach. As such, litigation appears to be more attractive than the CNNIC solution as the latter can only handle one type of case, and the result provided by CNNIC's guidelines is not final and is subject to a judicial decision if either party submits the dispute to the People's Court during or within 30 days after the CNNIC resolution.

GROUNDS FOR COMPLAINT

Article 4 of the Interpretation defines the grounds for complaint 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 distinctive aspects. 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 rights. 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 considered as infringement. Such provision actually expands the scope of cases that can be accepted by the court, and, in comparison with the rules of the CNNIC solution, it also increases the intellectual property (IP) owner's chances of winning the case.

The other difference is that, under the CNNIC solution, in determining an infringement case the IP owner must prove that their business 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 that the IP owner will win the case.

Article 5 of the Interpretation lists four types of "bad faith" usage. Among these, the fourth type stands out. Under this circumstance, if a defendant registers a domain name with the intention of preventing the IP owner from registering the name, and that defendant has neither used the name nor intended 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 trademark". However, it will do so only upon the disputing parties' request.

COMPENSATION

The last two articles of the Interpretation, Article 7 and Article 8, 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 the illegal domain name;

(2) granting the IP owner the right to register and use the domain name if the IP owner so requests;

(3) awarding of damages if the IP owner has sustained any actual damages.

The judge of the Supreme People's Court comments that monetary damages will not be imposed unless the IP owner proves the existence of harm.

Taking the Interpretation as a whole, the intention of the Supreme People's Court is to provide more protection to IP owners than prior laws offered and to impose more good faith and due diligence obligations upon domain name registrants.

Endnote:

1."Correctly Hearing Computer Network Domain Name Dispute Cases According to the Law (依法正确审理计算机网络域名纠纷案件)," People's Court Post (人民法院报), July 24 2001.