The Domain: Invader or Victim

Anna Shmalyuk, Intellectual Property Specialist

In the Middle Ages, domains were a privilege of the crown and its vassals. Domains served as a means of entrenchment of royal power and as the main source of income of feudal lords. Although the domain moved from the tangible world to the virtual reality and almost anyone can become the owner of a domain, the value of some domains is quite equivalent to the value of a fief. For instance, a $22 million bid was made at an Internet auction for the poker.com domain name.

The number of domains in the world wide web, which celebrated its 20th anniversary this year, is growing rapidly: This July the number of domain names in the .ru zone stepped beyond the symbolic milestone of 2,222,222 names. Domains are becoming ever scarcer with each passing year, as currently there are no four-letter .com domains or three-letter .ru domains left.

The number of disputes is growing at a commensurate rate, both between the owners of domains and with holders of exclusive rights to means of individualization, and the number of cases of Internet fraud is likewise growing, as they take the form of cybersquatting (registration of a domain name which includes another party’s trademark or a company name, for the purpose of its sale or advertising the squatter’s own goods or services), typosquatting (registration of well-known domains with insignificant ‘typos’ to attract clients from other sites, for instance wwwlenta.ru or jandex.ru), or phishing (creating domains for the purpose of harvesting personal information from a user).

One instance of cybersquatting was the registration of the rospatent.ru domain name, which coincides with the name of the Federal Service for Intellectual Property, but owned by a private patent agency.

Unfortunately, Russian companies are reluctant to take legal action to protect their rights, as they prefer buying domains, thus facilitating the growth of this illegal business. However, court practice shows that in some cases it is possible to succeed.

Domain disputes of an economic nature are examined by commercial arbitration courts, and companies that provide services on registration of domains may be engaged in such proceedings as third parties.

In some cases courts refer to priority of rights when resolving such disputes. Thus, AvtoVAZ acquired the rights to www.avtovaz.ru and www.lada.ru domain names, while LAD-M failed to cancel the registration of the www.lad-m.ru and www.ladm.ru domains, since their registration occurred before its trademarks’ priority dates.

There is one more approach that stipulates that a domain name may not be classified as a result of intellectual activity and means of individualization, and, therefore, it is illegal to use the concept of priority in respect of domains. In this regard it is recommended to use the legislation on protection of competition.

This approach seems to be more adequate since it is based on actual provisions of the legislation. Besides, single use of ‘first come, first served’ principle without regard for all the aspects of a case does not bring an equitable resolution.

The legislation on protection of competition, however, is not always appropriate to use, since competitive relations should exist, and that is difficult to confirm in the case of classic cybersquatting, which consists of registration of a domain name solely for purposes of its resale and provided no commercial activities are conducted under such domain name. The provisions of IP law cannot be applied either, as far as potential mixing with a trademark pertaining to similar services/goods should occur following use of a domain.

Lack of proper legal regulation also creates grounds for so-called reverse domain hijacking by registering a trademark. Although the Russian Civil Code prohibits registration of a trademark identical to a domain name registered earlier, the notion of identity provides vast opportunities for speculation.

The procedure elaborated by the World Intellectual Property Organization, called the Uniform Domain Name Dispute Resolution Policy, which is applied to resolving domain disputes in approximately 60 domain zones, including .com, .net and .org. is more efficient. The WIPO has over 10 years examined over 15 thousand cases within the framework of the UDRP. The main requirement of this method, with respect to registration and use of a domain name, is that a bona fide intent is present. Within this context the Resolution of the Presidium of the Supreme Arbitration Court on a case pertaining to the denso.com domain name is rather significant, since the court took into consideration the resolution of the WIPO Arbitration and Mediation Center and indicated that the UDRP may be used for resolving court cases with respect to the domains in the .com zone.

In recent years, particularly in connection with the new forthcoming system of generic top-level domains (New gTLDs) introduced by ICANN and delegation of the Cyrillic domain .rf (.рф), problems associated with domain names are being extensively discussed and new regulations are being developed. Nevertheless, the current situation requires prudence from the owners of domain names and trademarks: prior to registration of a domain or filing a trademark application, one is advised to make sure that there are no possible obstacles and to assume complex measures against their occurrence in future.