@eLaw.com.hk 葉謝鄧律師行

Conflict between an Internet domain name and a registered trademark

"Cybersquatter" refers to a person who registers a trademark as a domain name hoping to later profit by reselling the domain name to the trademark owner. An aggressive cybersquatter may even send messages to the trade mark owner soliciting a sale. Passive cybersquatter may just leave the domain name unused or direct it to a one-page homepage indicating that the domain name is "for sale".

In the USA, a trade mark owner believing that someone has taken a domain in bad faith, he can either sue under the provisions of the Anticybersquatting Consumer Protection Act (ACPA), or he can follow the arbitration procedures set out by the Internet Corporation of Assigned Names and Numbers (ICANN). The ACPA in the USA defines cybersquatting as registering, trafficking in, or using a domain name with the intent to profit in bad faith from the goodwill of a trademark belonging to someone else. Hong Kong does not have an equivalent legislation. Trade mark owners may however resort to the general laws of trade mark infringement and sue the cybersquatter in Court.

The ICANN arbitration procedure is often regarded by intellectual property lawyers to be faster and less expensive, and the procedure does not necessarily require a solicitor to be engaged.

Past statistics show that Courts and arbitrators generally side with trademark owners in these disputes and order the cybersquatter to "transfer" the trademarked domain names to tthe trademark owners. Respondents defending in good faith may rely on the Applicant's "bad faith" or "reverse hijacking" to resist the Applicant's attempt to "bully" the Respondent.

Practical Advice on Registering and Using a Domain Name

The registration of a domain name does not give the registered owner proprietary rights in the name. The name must be capable of passing through the tests that it does not infringe a prior trade name. Nor the name may commit passing off against reputable trade names and products. A third party possessing rights based on trade marks and common law's passing off can enforce its right against the registered owner of the name.

A domain name user must be cautious when registering domain names. He must refrain from registering a domain name similar or same as a famous trade mark or trade name can be liable for passing off and trade mark infringement.

Like registering a trade mark, the user should investigate the current usage of the name before doing the registration. This can be done by for example conducting trade mark search at Trade Mark Registry

How to Demonstrate the Registrant's Rights to and Legitimate Interests in the Domain Name?

When a registrant receives a Complaint as defined in the relevant rule of the Rules of Procedure, he should refer to Paragraph 5 of the Rules of Procedure in determining how the Registrant's Response should be prepared.

Any of the following circumstances, in particular but without limitation, if found by an Arbitration Panel to be proven based on its evaluation of all evidence presented to it, shall demonstrate the Registrant's rights or legitimate interests to the domain name for purposes of the DRP:

(i) before any notice to the registrant of the dispute, the Registrant's use of, or demonstrable preparations to use, the domain name or a name corresponding to the domain name in connection with a bona fide offering of goods or services in Hong Kong ; or

(ii) the registrant (as an individual, business, or other organisation) has been commonly known by the domain name, even if the Registrant has acquired no trade mark or service mark rights in Hong Kong; or

(iii) the registrant is making a legitimate non-commercial or fair use of the domain name, without intent for commercial gain to misleadingly divert consumers or to tarnish the trade mark or service mark at issue.

What Does a Complainant have to Prove?

The Complainant has to adduce evidence of Registration and Use in Bad Faith.

For the purposes of rules in the DRP, the following circumstances, in particular but without limitation, if found by an Arbitration Panel to be present, shall be evidence of the registration and use of a domain name in bad faith:

(i) circumstances indicating that the Registrant has registered or the Registrant has acquired the domain name primarily for the purpose of selling, renting, or otherwise transferring the domain name registration to the Complainant who is the owner of the trademark or service mark or to a competitor of that Complainant, for valuable consideration in excess of the Registrant's documented out-of-pocket costs directly related to the domain name; or

(ii) the Registrant has registered the domain name in order to prevent the owner of the trademark or service mark from reflecting the mark in a corresponding domain name, provided that the Registrant has engaged in a pattern of such conduct; or

(iii) the Registrant has registered the domain name primarily for the purpose of disrupting the business of a competitor; or

(iv) by using the domain name, the Registrant has intentionally attempted to attract, for commercial gain, Internet users to the Registrant's web site or other on-line location, by creating a likelihood of confusion with the Complainant's mark as to the source, sponsorship, affiliation, or endorsement of the Registrant's web site or location or of a product or service on the Registrant's web site or location.

What are the Applicable Disputes?

Regarding .hk registration, the registrant is required to submit to a mandatory arbitration proceeding in the event that a third party (a "Complainant") asserts to the applicable Provider that:-

(i) the domain name is identical or confusingly similar to a trademark or service mark in Hong Kong in which the Complainant has rights; and

(ii) the registrant has no rights or legitimate interests in respect of the domain name; and

(iii) the registrant's domain name has been registered and is being used in bad faith.

To succeed in the arbitration proceeding, the Complainant must prove that all of these three elements are present.

What are the Applicable Registrations?

Regarding .hk domain names, the DRP applies to all new registrations done after 1st June 2001 and re-registration done with the adoption of the new Registration Agreement effective on 1st June, 2001. Therefore, domain names registered before 1st June 2001 and do not adopt the Registration Agreement are not governed by the DRP.

In case the DRP applies, to each registrant, the arbitration proceeding set out in the DRP is mandatory. These proceedings will be conducted before one of the Dispute Resolution Service Providers approved by HKDNR (the Provider). Presently, the Hong Kong International Arbitration Centre is the only Provider accredited to provide such arbitration services.

Domain Name Dispute Resolution Policy of HKDNR (.hk domain names)

The Hong Kong Domain Name Registration Company Limited ("HKDNR") has adopted the Domain Name Dispute Resolution Policy (the "Dispute Resolution Policy") as being incorporated by reference into the Domain Name Registration Agreement between HKDNR and a registrant ("the Registration Agreement").

The Dispute Resolution Policy (DRP) sets forth the terms and conditions in connection with a dispute between the registrant and any party other than the HKDNR in regard to the registration and use of a .hk (most commonly .com.hk, .net.hk and .org.hk suffix). That means every registrant, when registering his domain name is automatically subject himself to the governance of the DRP. Therefore, knowing and understanding the Dispute Resolution Policy is very important when facing a complaint from others or the Registrant intents to make a complaint against the registrant.

Anti-Cybersquatting Consumer Protection Act in USA

UDRP is remarkable on its relative simple procedure, little costs and speed. The shorthcoming is that the complainant will not be awarded with any compensation or damages. That is different from the proceedings commenced under the Anti-Cybersquatting Consumer Protection Act of the US.

On November 29, 1999, former President Clinton signed into law the Anti-cybersquatting Consumer Protection Act. The Act makes it a civil liability if a person register for the bad faith using the trademark or service mark of another as a domain name. The Act is Internet-specific legislation, aiming at policing the problems of cybersquatting." The Act gives a judge the power to order damages against the cyberpirate damages up to the maximum amount of US$50,000 per domain name.

Hong Kong does not have a legislation similar to the Anti-Cybersquatting Consumer Protection Act.

UDRP, One in a Million and Cybersquatting

ICANN has set up a procedure for resolving disputes between the owners of trade marks and the registrants of domain names. This is the Uniform Domain Name Dispute Resolution Policy (UDRP), approved in August 1999. The UDRP applies in the three open gTLDs, as well as in some ccTLDs (currently 18 out of 243). It also applies to all of the new gTLDs such as .info, .biz.

The decision of the Court of Appeal on One in a Million in England has made the position regarding cybersquatting quite certain. Even if a trade mark owner has not registered its trade mark, he can assert his rights in the domain name by proving that he has some rights in the domain name. Such rights can be based on the fact that the trade mark has been used for his business or trade. The trade mark owner can also rely on the common law's 'passing-off' remedy to assert his rights on the domain name.

The UDRP has given a even more flexible approach towards the resolution of a domain name dispute. A complainant must first have rights in a trade mark which is confusingly similar to the domain name complained of, and he has to prove that the owner of the name has no rights or legitimate interest in it and that it was registered in bad faith.

Up to early 2001, there have been over 2500 decisions resolved according to the UDRP. It costs a complainant $1500 to file a single complaint and a decision will be issued about 7 weeks after that. There are four organisations who are authorised to adjudicate the disputes under UDRP:

· World Intellectual Property Organisation in Switzerland,
· National Arbitration Forum in US
· CPR Institute for Dispute Resolution in US, and
Disputes.org/eResolution Consortium in Canada.

Commercial Use of Domain Names and First-come-first served Policy

Because of the use of the DNS to translate the English spelling into digits, domain names have become the identifiers to persons and businesses.

The use of the Internet as a commercial platform (through the concept of E-Commerce) has increased the demand of corporations on domain name. Companies invariably prefer to adopt their company names, product or servie trademark to be their domain names. Some people foresee that could happen and proceed to 'pirate' the domain names spelt in the names of the corporations or trade marks. This is known as 'cybersquatting'.

Domain name registration companies like Network Solutions (US) and Nominet (UK) do not take into account the nexus between the registrant and the domain names, namely whether the registrant has a lawful right over the domain name. The allocation of domain names is done on a "first-come-first-served" basis.