New Rules on Domain Name Registration and Dispute Resolution

Article 16 of the Domain Name Procedures 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 Procedures set forth the following exceptions 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 registers 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, licence or otherwise assign the domain name to gain improper benefits;

(ii) registering another person51s name or logo as its own domain name to prevent such other person from using their own name or logo on the internet;

(iii) registering or owning a domain name for the purpose of damaging another person51s reputation, or to disrupt such other person51s 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 People51s 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 (中华人民共和国商标法), 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 Procedures (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 Procedures 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 honour or the national interest; inflaming 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 over the media and promoting an official ideology.

Dispute Resolution

Currently a domain name dispute can be resolved through one of the 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.

The other avenue open is arbitration through another arbitration organization. Although the Dispute Resolution Procedures state that domain name disputes shall be 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 (i.e., Haidian District People's Court of Beijing Municipality as the trial court, or, if the case is foreign-related, the First Intermediate People's Court of Beijing Municipality as the trial court).

As we wrote last year,¹ CIETAC or HKIAC arbitration is neither mandatory nor final, and 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 using 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 wrongdoers own website belongs to "bad faith" registration or use.² However, neither the Anti-unfair Competition Law (反不正当竞争法) )nor the SPC Interpretation of 2001 specifically and clearly invalidates such infringement acts through search engine registration. It would be more ideal to cover an offence in an internet related law.

Endnotes

1 See Wang and Cai, "Domain Name Disputes: Alternative Resolution vs Litigation,"China Law & Practice, September 2001, 15(7), pp. 50-51.

2 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 Interpretation.