In the internet era, domain names are increasingly becoming an important conveyance of brand messages and brand image. Domain names are granted on a “first come, first served” basis, and the registration is cheap and convenient. Persistent domain name squatting and website counterfeits have given rise to domain name disputes every now and then.

The right owner may seek to combat website counterfeiting through negotiation, an attorney’s letter, lodging a complaint, or bringing a lawsuit. However, if the right defence is not successful, and the domain name cannot be recovered, confusion and misidentification remain. In light of this, arbitration is an indispensable way to combat IP infringements arising from domain name disputes.

Years of rights defending and infringement combatting from rights owners have also made the infringers more cunning and alert. The most commonly seen type of squatting is to register a single trademark, but infringers will also register one trademark in combination with another, or add some descriptive or ambiguous words, or company name, to the trademark.

For example, knowing that company A and B intend to merge, the infringer registers as the domain name, or adds some descriptive, insignificant or geographical messages before or after the trademark that are already owned by others. The infringement does not end there. The infringer often posts or commercializes products competing with the main business of the rights owner on the website under the domain name, or even imitates the official website in terms of layout.

Visitors to the website under the controversial domain name are highly likely to mistakenly believe that association or authorization exists between the infringer and the rights owner, and between the domain name and the official website. In this way, the infringer illegally makes profit from the brand reputation, or prior rights of the rights owner.

Therefore, the recovery of the domain name is the fundamental solution, and uniform domain name dispute resolution is an efficient means to accomplish this. The advantages over intricate lawsuits and negotiations, where the infringers might raise exorbitant demands, are obvious.

First, the process is convenient, the complaints and documents can be filed through emails. Second, the case is generally concluded in about two months, since there are strict processes and time limits. Third, it is cheap, and the fees comprise only payment of experts and management fees of the agency. Fourth, if there are several domain names involved in the dispute, the complainant may ask for a combined hearing to save time and improve efficiency. Finally, the favourable decision is highly enforceable, and the registry will assist the complainant in the transfer of the domain name based on the decision.

Uniform domain name dispute resolution mechanism is carried out according to the Uniform Domain Name Dispute Resolution Policy and its supporting implementation rules. Article 4(a) of the policy allows the complainant to demand the transfer or cancellation of the controversial domain name if the complainant can prove that the following three conditions are all met: (1) the controversial domain name is the same as, or misleadingly resemblant to, the trademark or logo first enjoyed by the complainant; (2) the respondent does not enjoy the rights and interests related to the controversial domain name; and (3) the domain name is registered or used maliciously.

The respondent in the dispute is entitled to a plea. Article 4(c) of the policy sets out several conditions under which the respondent enjoys rights or legitimate interests in the controversial domain name, including, but not limited to: (1) the respondent has been using the controversial domain name, or corresponding name, for honest goods or services; (2) although without trademark or service logo, the respondent is widely known for the controversial domain name; and (3) the domain name is being used legally or reasonably, not for profit, and without the intent of misleading.

In practice, the respondent might also be a trademark squatter, countering the complainant on the plea that the trademark is a legitimate right. In this case, to secure a victory in domain name arbitration, the attorney needs to deal with the trademark squatting first.

There are exceptions though. In some of the cases that the authors have dealt with, the respondents are held not to enjoy the legitimate rights and interests at question in the arbitration, even though they plea to enjoy trademark registration. Take an example. If the registrant of the trademark is not the same as the registrant of the domain name, although the respondent claims to have trademark authorization or license for use, without the record filing and public announcement of the Trademark Office of National Intellectual Property Administration, the trademark authorization or licensing are not effective against a bona fide third party, i.e., the complainant of the controversial domain name.

Another case is that the respondent in the dispute is deemed not to enjoy the legitimate rights and interests, since the respondent has conducted other unfair competition behaviours intending to mislead the consumers.

Infringements are increasingly tricky, with infringers seeking illegitimate interests with more than one infringing behaviour including trademark filing, domain name squatting, registering the same or a similar company name, etc. Average consumers, who are less vigilant, are finding it more difficult to recognise misperceptions and ward off confusion.

As for trademark squatting, in general, the process of raising an objection or annulling a trademark will take 12 months or longer. The result of, and time needed for, a complaint to the competent authority against the company name is also uncontrollable. Against this backdrop, the uniform domain name dispute resolution mechanism is like a sharp sword piercing through domain name squatting. It enables the complainant to acquire a favourable decision in a short period of time, not only a boost for the confidence of the rights owner, but a pragmatic and efficient way to combat the infringers.

This article was originally published in China Business Law Journal.


Head of Shanghai Pacific Legal, Partner, Intellectual property, Antitrust and competition
Associate, Intellectual property