CyberSquattingwithChineseCharacters

29 July 2002

Edward Alder



‘Cybersquatting’ means registering a name or expression as a domain name that is identical or confusingly similar to a third party’s real name or trade mark in bad faith and without any legitimate interest. Usually this is done with a view to selling the registration to the third party.

Various arbitration bodies and courts have powers to resolve cybersquatting disputes. Arbitration bodies derive their power from domain registrars’ trading terms. Courts get involved where the ‘victim’ brings a civil claim against the registrant, such as for infringement of the trade mark.

As in many fields of law, it takes time for different situations to come up for consideration and the rules to be applied get worked out on a piecemeal basis. Recent months have seen a few new interesting cybersquatting issues in the headlines.

In what initially seems a surprising result Viacom, which operates most of the television channels called “MTV” and owns the trade mark “MTV” in various countries, lost its claim to recover ‘mtv.com.sg’ in arbitration in Singapore. Elitist registered ‘mtv.com.sg’ as a domain name and uses it for a web portal and online store for Chinese entertainment products.

The panel found that although Viacom owns the “MTV” trade marks, the acronym “MTV” is, in Singapore at least, not exclusively associated with the Viacom channels. Elitist provided evidence showing that the acronym “MTV” is widely used amongst Chinese youth in Singapore as a generic term for music videos. The panel found therefore that Viacom had failed to show that Elitist has no right or legitimate interest in the domain and that there was no bad faith since Elitist had put a notice in its website to disclaim any association with Viacom.

Closer to home, the Beijing Centre of the new Asian Domain Name Dispute Resolution Centre has handed down its first decision. The complainant, Sichuan Yibin Wuliangye Group Co Ltd, was a Chinese company in the business of selling a famous spirit called “Wuliangye” for many years. The respondent, Canada Yibin Goldenet Science & Technology Development Co Ltd, had obtained the domain name ‘wuliangye.com’ from a company called China Sichuan Yibin Goldennet Science & Technology Development Co Ltd.

The complainant had registered the trade mark "Wuliangye" both in English and Chinese. The domain name did not seem to be used for any genuine business purposes and according to the complainant the respondent had attempted to sell the domain to it for an inflated price and to auction it.

The respondent took no part in the arbitration. In the absence of evidence from the respondent the panel concluded that (a) the domain name was identical or confusingly similar to the complainant's trade mark; (b) the respondent had no legitimate interest in the domain name; and (c) the respondent had acted in bad faith. It ordered the domain to be transferred to the complainant. A fairly straightforward start for the new Asian body.

The advent of completely new top level domains (TLDs) such as ‘.biz’ raises additional problems. With each new TLD, fast-moving cybersquatters can register trade marks as domain names all over again. A June 2002 study from Harvard Law School suggests that around 75% of web sites under the .biz TLD hold no substantive content and the authors easily tracked around 5000 domain names openly offered for sale by the registrants in contravention of the .biz registrar’s anti-warehousing policies.

Attack, it seems, is the best form of defence against cybersquatters. About 1/3 of .biz domain names were found to be held by the same entity holding the corresponding .com domain – often the legitimate owner of a corresponding trade mark. ‘Defensive registration’ will certainly be the cheapest defence – a US$20 duplicate registration could save a legitimate trade mark owner many thousands in legal fees conducting an arbitration to recover what is rightfully theirs.

In an unusual role reversal a disgruntled individual has appealed an arbitration decision against him concerning his registration of ‘canadian.biz’ to the Ontario Superior Court. Molson Canada, which registered ‘Canadian’ as a trade mark in 1998, brought a claim against Douglas Black citing similarity with its mark. In a surprising decision this month the arbitrator ordered Black to turn the name over to Molson. Black said he had registered the domain for a Canadian business directory. Understandably Black claimed to be astonished by the ruling and said the word ‘Canadian’ was clearly generic and did not only refer to beer.

Finally, an interesting case from Scotland this month focuses on the email related aspects of cybersquatting. The Law Society of Scotland is attempting to recover the domain ‘lawscot.co.uk’ from its current owner Tommy Butler. The Society claims Mr Butler is ‘passing off’ his site as that of the Society and, importantly, that he is wrongly receiving private and confidential emails addressed to ‘xyz@lawscot.co.uk’ intended for Mr XYZ at the Society.

The Society may not be on strong ground. They displayed the domain on their own site for some time before complaining about it, they only registered ‘lawscot’ as a trade mark two years after Mr Butler established his site and it was they who offered to buy the registration from him rather he who offered it to them. Remarkably, the Society has obtained an injunction against Mr Butler and Nominet, the UK arbitration body, suspending the registration until the case is determined.