It is clear that the best way to really mark your existence on the World Wide Web is by creating your own domain.
In order to register a domain name, you must file an application to the Internet Network Information Center (InterNIC). The InterNIC is a registration service that currently acts solely as an administrative body and no much more. About two to six weeks after filing, you receive notice that your application has been accepted, except if your name is prima facie illegitimate or malicious.
Registration for domain names obeys to the rule “first-come, first serve”. It implies that the first person registering a domain name is the one entitled to that domain name, even if another person has a legitimate interest in the said domain name. If you come in second place and ask for this same domain name, the InterNIC will refuse without looking at the legitimacy of your claim on it.
This rule is difficult to accept especially when a website is for the owner of a Trademark a wonderful tool, due to the world-wide access to the Internet, to promote its trademark, and all of his commercial activities, products or services.
Moreover, very often, the ones registering the domain name, do so because a particular trademark already exists and hope they will take advantage of this situation by asking the legitimate owner a lot of money to obtain the assignment of the domain name.
Those conflicts have led trademark owners and domain name registrants to enter into real financial negotiations and therefore created a very lucrative business. But some have decided to fight back those cybersquatters and have filed suits against them.
These new types of conflicts (I), between domain names and trademarks, led to the development of a new set of rules in order to solve those conflicts (II).
I. Types of Conflicts Between Domain Names and Trademarks
A. Two types of conflicts may arise:
1° In most cases, trademarks are registered previously to domain names.
Consequently, provisions of the Intellectual property code must be applied.
Article L.713-2 of the Intellectual Property Code provides that:
The following shall be prohibited, unless authorised by the owner:
- the reproduction, use or affixing of a mark, even with the addition of words such as “formula, manner, system, imitation, type, method” or the use of a reproduced mark for goods or services that are identical to those designated in the registration;
Article L.713-3 of the Intellectual Property Code adds that:
The following shall be prohibited, unless authorised by the owner, if there is a likelihood of confusion in the mind of the public:
- the reproduction, use or affixing of a mark or use of a reproduction mark for goods or services that are similar to those designate in the registration;
- the imitation of a mark and the use of an imitated mark for goods or services that are identical to those designated in the registration.
Accordingly, French judges apply traditional Trademarks conflict solutions. For example:
- In the Galeries Lafayette case: Judges held that good faith was inefficient in Trademarks infringements cases, even if the purpose of the infringement was to protect prestigious French Trademarks.
- In the JeboycotteDanone case: Judges held that the use of the trademark Danone did not infringe its owner’s rights because the use of the trademark Danone was necessary in order to indicate the political nature of the website. Allowing such use was necessary to guarantee Freedom of speech.
Trademarks owners consequently thought that their actions against domain names would always succeed.
2° Unfortunately for trademark owners, those solutions do not apply when the registration of domain name occurs previously to the registration of the corresponding Trademark.
This situation is rare and the few cases illustrating this hypothesis, are actions that have been brought by Trademark owners.
- In the Agaphone case: Judges held that a generic domain name registered prior to the Trademark registration does not counterfeit such Trademark.
- In the Oceanet case: Judges held that registering a Trademark after that a domain name has been registered is contrary to French trademark law.
- The Virgin Interactive case (Bienvenue dans la vie.com): is the sole case where the complainant was the owner of the domain name.
Even if the judges held that the claim could not be heard in this case, they nevertheless stated that the name domain can be protected because of its commercial value. But its protection is subject to three conditions:
- complainant’s rights in the domain name,
- precedence of the use of the domain name; and
- identical or confusingly similar signs.
B. Definition of cybersquatting
Cybersquatting can be defined as the act of registering a popular trademark or a company name with the intent of selling it to its rightful owner.
French judges have clarified this new concept of cybersquatting:
- In the L'Oréal case: Judges have decided that cybersquatting should be punished because it causes a wrong to the image of the Trademark or the company, and it prevents the owner from registering this domain name, which is necessary to promote its products abroad and enable international communication.
- In the Célio case: Judges have qualified such a registration of the domain name, as an abuse of the freedom of reservation on the Internet.
- In the Trois Suisses case: Judges decided that registration of all possible domain names using “Trois Suisses”, especially because it is a famous trademark, constitutes a wrong to the image of this trademark.
- In the Camif case: Cybersquatting has been defined as an unjustified exploitation of a trademark. Judges held that registration of all possible combinations of famous trademarks and to put them up for auction to negotiate a sale price with the legitimate owner of the trademark proves the illegal intention to create an economic wrong.
We can nevertheless find a contrary decision:
- In the Altavista case: Judges held that there cannot be any cybersquatting when the owner of the Trademark has been negligent in reserving his domain name in France. He should have taken reasonable steps as soon as he decided to do business in France.
C. The rules set forth in French law:
1° We will first look at the applicable law.
The French law must be applied even if the domain name has been registered in a foreign country.
French judges apply the reception theory: in the Saint Tropez case judges held that if information can be received in the French territory, French law will be applicable.
- In the Total-Fina case: The registrant’s nationality has no effect on the applicable law. In this particular case the company was an American one.
- In the Le Figaro case: Judges refused to transfer the domain name to the Trademark owner because this domain name was an international one and had been registered by a foreign organism, which was a third party to the proceedings.
2° Which judge entertains jurisdiction ?
The French judge is the competent judge.
- In the Payline case: Judges applied Article 5-3° of the Convention of Brussels (1968), which holds that the respondent may be sued, in matter relating to tort, delict or quasi-delict, in the courts for the place where the harmful event occurred. Therefore, since the Internet is accessible all around the world, if the wrongful act can be seen in France, this act will be considered as taking place on the French territory.
- In the SFR case: Judges held that the SFR Company suffered a wrong because the domain name infringed on its rights. Therefore the wrong is suffered at its location, that is, at its registered address.
Since usually there is special urgency, the aggrieved party is forced to bring an action against the infringer in front of the interim judge.
In this situation, Article L.716-6 of the Intellectual Property Code, which provides a special proceeding, must be applied:
- The President of the Court before which proceedings have been instituted sitting in chambers, may provisionally prohibit a continuation of the allegedly infringing acts, subject to a daily fine, or may subject such continuation to the furnishing of securities for the purpose of ensuring compensation to the owner of the mark or to the beneficiary of an exclusive right of exploitation.
- Action for prohibition or furnishing of securities shall be admissible only if the case appears well-founded and proceedings were instituted within a short time after the day on which the owner of the mark or the beneficiary of an exclusive right of exploitation obtained knowledge of the facts on which they are based […]
This type of conflict can be heard in a summary procedure only if the complainant has already filed an action to obtain a decision on the merits.
- In the Française des jeux case: Judges held that the case could not be heard on its merits because the validity of the Trademark LOTO was subject to controversy.
- In the Ebay case: judges insisted on the fact that this special proceeding has to be brought within a short period (i.e. six months)
But we must keep in mind that this special summary proceeding is not available for famous Trademarks.
3° We will now study the question of the extent of the protection.
Is the Trademark only protected for the goods and services that the Trademark owner has designated or more? The solutions are not uniform.
The problem is that the consequence of the registration of a domain name prevents the use of this name to all goods and services.
- In the Alice case: Alice SNC was created in 1957 and registered in 1975 "Alice" as a Trademark in class 35 for advertising services. Alice SA was incorporated much later, in 1996, and registered the Trademark "Alice d'ISOFT". Alice SA managed to register the domain name "alice.fr" in 1996 under which it operated its website. Alice SNC filed suit against Alice SA, on the ground of Trademark infringement.
- The interim judge held that since the registration of a Trademark as domain name blocks all other owners of the mark from using it in the same top-level domain, the difference in the activity is irrelevant. Thus, the respondent was obliged to give up his domain name.
- This decision was not upheld by the Appeal Judges: Judges took into account the fact that the complainant and the respondent had completely different activities, there was therefore no risk of confusion for the public.
- This decision has been upheld by the Tribunal de Grande Instance de Paris
- In the Mutuelles du Mans case: Judges held that there was no likelihood of confusion because the two companies had different activities and operated in different industries.
- In the Celio case: Judges held that the protection of the Trademark was limited by the speciality rule.
- In the No Problemo case: Judges held that there was a likelihood of confusion because the services designated in the registration (i.e. audio-visual communication) were identical to the activity conducted by the company No Problemo.
Express reference to Class 38: In some cases judges refers expressly to Class 38 in order to address the issue and apply strictly the Speciality Rule.
Class 38, is the one concerning the Internet in general and computer technology.
- In the Pacanet case: Judges pointed out the fact that the Trademark was registered in Class 38
- In the Lancôme case: Judges held that the domain name "lankom.com" must be reassigned because the Trademark Lancôme designated services in relation to Internet (Class 38).
- In the Market Call case: Judges held that the domain name was not counterfeiting because the Trademark was not registered in Class 38.
- In the Ebay case: Judges stated that the eBay company did not register its Trademark in Class 38, even though its principal activity was the telecommunications. Consequently, the judges decided against ebay and rejected its claims.
- In the Le Figaro case: Judges held that there was a likelihood of confusion because the Trademark designated services of communication in Class 38.
Analysis of goods and services : In other cases, the Tribunal de Grande Instance de Nanterre refered to Class 38, but analysed which goods and services were designated
- In the Zebank case: Even though the Trademark had been registered in Class 38, judges examined the contents of the two websites. In this particular case, there was no likelihood of confusion because one website was designed to exhibit work of arts and the other was an on-line banking website.
- In the Leonardo case : Judges held that the activities and services (included in Class 38) proposed by the complainants (advising activities for start-ups) and the respondent (magazine on art and sciences) were totally distinct even if both parties use the Internet media.
Famous and renowned trademarks: But with regards to famous and renowned Trademarks, the speciality rule will not apply.
- In the L'Oréal case: Judges held that L'Oréal was an internationally renowned trademark and consequently, its protection must be extended to goods and services not designated in the registration.
From all these court decisions we will try to determine the nature of the domain names.
D. Nature of the domain name?
- In the SFR case : Judges held that the registration of a domain name does not give property rights and can be a counterfeiting of a previously registered Trademark.
- In the Sony / Allifax case :
- The Tribunal de Grande Instance de Nanterre held that the right to use trademark only allows the reseller to use this Trademark as a trade-sign and cannot entitle this reseller to register the Trademark as domain name.
- The Appeal Judges, on the contrary, held that a licensing contract allows the licensee to use the sign in all its business activities and therefore to use it as a domain name.
- In the Market Call case: Judges considered that the domain name is similar to a trade-sign or a company name, which protection depends of its use.
- In the Virgin Interactive case: Judges held that in order to protect a domain name because of its commercial value, three conditions must be met:
- The complainant has rights on the domain name,
- Precedence of the use of the domain name; and
- Identical or confusingly similar signs.
E. Who can be sued for infringement?
- In the Trois Suisses case: Judges held, for the first and sole time, that the technical intermediate breached his duty of prudence and vigilance. They also held that the editor was responsible because he took part in the registration formalities of a website, on which domain names composed of famous Trademarks were put up for auction.
- In the Entrevue case: Judges held that, even though the domain name was counterfeiting, the technical intermediate could not be automatically held liable.
F. What kind of decisions may the judges take?
- In the Trois Suisses case: Judges enjoined the domain name registrant to transfer the litigious domain name or pay a fine
- In the Double Click case: Judges held that deletion of the domain name would have excessive consequences, disproportionate to the wrong suffered.
- In the No problemo case: Judges enjoined the deletion of the domain name, because there is no provisions in the code allowing the judge to enjoin restitution of the domain name.
Furthermore, we have to point out that, the solutions differ according to the type of the domain name.
- Concerning, “.fr” domain names assignment of the domain name is prohibited. The aim of this prohibition is to prevent illegitimate financial pressures against the legitimate owner. Therefore those domain names are deleted, which is not necessarily the best solution.
- Concerning the generic top-level domains “gTLD”, the assignment is possible.
2. Conflict Resolution
The WIPO Arbitration and Mediation Center's domain name dispute resolution department gives effect to the Uniform Dispute Resolution Policy (U.D.P.R.), adopted by the Internet Corporation for Assigned Names and Numbers (ICANN) on August 26, 1999. The Policy, which is modeled on recommendations made by WIPO provides holders of Trademark rights with an administrative mechanism for the efficient resolution of disputes arising out of the bad-faith registration and use by third parties of Internet domain names corresponding to those Trademark right. The Policy applies to disputes in the generic top-level domains (gTLDs) .com, .net and .org. The remedies available are limited to the transfer or cancellation of the domain name.
Requests are examined by four institutions, including WIPO (the panel is composed of one or three experts)
The Policy has several advantages:
- As soon as the proceeding begins, the domain name can not be used anymore
- The registration unit applies the decision immediately if the respondent does not contest after 10 days
Note that when both the complainant and the respondent are French as well as registering unit (as in the Merinos case), the Administrative Panel takes in consideration the rules and principles applicable in France. Arbitrators composing the Panel may choose the official language of the proceedings.
To obtain the assignment, three conditions must be fulfilled:
1° Firstly, respondent's domain name is identical or confusingly similar to a Trademark or service mark in which the complainant has rights.
The right in the Trademark can be a right of use (that is to say that it can be an application)
To appreciate if trademarks are identical or confusingly similarity traditional principles are applied (visual and phonetic similarity, general feeling), but adapted to the Internet media :
- The type of prints used is irrelevant : for example, k2r.com counterfeited K2R
- Addition or deletion of a hyphen or space between the two words of the Trademarks makes an insubstantial difference to the appearance, pronunciation and meaning of the terms
- The phonetic identity create a likelihood of confusion: phonenphone.com and Phone-N-Phone.
- In the bbcdelondres.com case, the Panel held that the addition of a geographical denomination, in this case, the word Londres (London), serves to confirm an association with the BBC in the mind of public.
- Addition of the generic top level domain is irrelevant because it is likewise without legal significance since use of a gTLD is required of domain names registrants and does not serve to identify a specific enterprise as a source of goods or services.
- It is not necessary that the Trademark be registered in the respondent's country nor in the country where the domain name has been registered, because access to the Internet is worldwide.
- In a Wal-Mart case, the Panel held that the addition of the term "sucks" did not avoid the likelihood of confusion, because the first element the public saw was the Trademark.
But the Panel seems to be changing its position slightly. In an other Wal-Mart case, the Panel held that the Trademark and the domain name were different and that the adjunction of the term "sucks" showed that the two were not affiliated.
2° Secondly, respondent has no rights or legitimate interest in respect of the domain name
Whilst the burden of proof is on the complainant, the Policy advises the respondent in how to demonstrate its rights and legitimate interests in the domain name.
Consequently, the respondent can prove :
1. Before any notice to the respondent of the dispute, his use of, or a demonstrable preparation to use, the domain name or a domain corresponding to the domain name in connection with a bone fida offering of goods or services.
This advice has been interpreted by the Panel :
- In the Dior case, the Panel held that the respondent did not have legitimate rights if he only began using the domain name after having received a cease and desist letter
But what is a bone fida offering?
- In the Allocation Network case, the Panel held that registration of descriptive or generic terms as a domain name, may constitute a legitimate interest in this domain name. Respondent showed that he had selected many of the domain names offered for sale at random from a dictionary.
A reseller may have a legitimate interest for purposes of avoiding a finding of abusive cybersquatting. But the Panel has specified in the Quaife case, that, whatever rights the reseller may have had do not extend to use of a deceptive domain, in order to divert customers.
What are the criteria used to determine if the use of a domain name is bone fida?
- Evidence of "demonstrable preparations" may show that the respondent has rights or legitimate interests in the domain name.
- Formal preparations can be sufficient
- But the Panel has also held that there were no demonstrable preparations when the respondent provided no annexes, exhibits or other evidence of preparation to use the domain name as an active website or of expenses in such preparation
- The respondent is commonly known by the domain name, even though the respondent has acquired no Trademark or service mark rights.
- The respondent has made non-commercial or fair use of the disputed domain name : but the Panel avoids this criteria if the complainant and the respondent's legitimate interests are different.
2. In some instances the Panel may accept that the use of a trademark in a domain name is necessary to respect Freedom of speech. Nevertheless dissenting opinions exist.
- In the Firestone case, the Panel found that the respondent's use of the domain name to designate a website for criticism and commentary about the complainant constitutes a legitimate non-commercial use and therefore fair use within the meaning of the Policy.
- But in the Mission KwaSizabantu case, the Panel held that the activities of the respondent amounts to tarnishing the activities associated with the Trademark of the complainant, and that it was sufficient for the test to fail.
- Concerning chats, we have already pointed out the evolution in the “walmartsucks” cases
3° Thirdly, the respondent has registered and used the domain name in bad faith
What is a registration made in bad faith?
- The panel held that there is no bad faith when the domain name was registered before the Trademark.
- On the contrary, acquisition of a domain name from its owner in full knowledge of the dispute between the owner of the trademark and the owner of the domain name is considered to be a registration made in bad faith
The understanding of “use” of a domain name differs
- An offer for sale of a domain sale is said to be a commercial use of the domain name
- The mere possession of the domain name without using it, cannot be considered as a “use of the domain name in bad faith”, when the respondent has not tried to sell or otherwise tried to pressurise the owner of the trademark .
Criteria for bad faith developed by the UDPR
- Profit : for example, the respondent registered the domain name primarily for the purpose of selling the domain name registration for valuable consideration.
- Habit : the respondent systematically registers different combinations of the two companies' marks in an attempt to exploit the expected use of these famous marks in a combined form. Therefore, the companies were unable to register their domain name.
But one decision can be criticised. The Panel held that the owner of a single domain name can be considered has the habit of doing it.
- Disturbing the business of the competitor : for example by posting a link to the website of its principal competitors
Criteria for bad faith used by the Panel
- For famous or renowned trademarks, the mere use of such trademark constitutes bad faith. See for example the case TF1
- The Panel held that the respondent’ use of the website to distribute explicit sex videos and to link to hardcore pornographic content, thus giving Internet visitors the false and damaging impression that the Trademark owner was affiliated with the respondent’s wide ring of pornography activity constitutes bad faith .
- Bad faith also exists when the respondent has taken active steps to conceal its true identity by operating under a name that is not a registered business name.
- We should also remember the cases involving the word “sucks”."
To conclude on conflict resolution, we can say that:
- It is an efficient manner in terms of rapidity, low costs which has found its way through the different dispute resolution techniques existing.
- Also, we must point out that very few decisions have been challenged even though it is possible to use the ordinary appeal procedures (notably, an Illinois Judge decided in Weber-Stephen Products on may 3rd, 2000, that the Panel’s decision did not bind him.
Even if cybersquatting still exists, actions were taken very rapidly at its beginning to establish a framework to reduce this practice
In addition to the special procedures that have been created, 6 new generic domains have been established: “.info”, for websites giving general information; “.biz” for businesses; “.pro”, for liberal practices; “.aero”, for the aeronautic industry; “.museum”, for museums; “.coop”, for cooperatives .
Registration for “.biz” has already started : this new domain is for entities desiring in good faith to engage into commercial activities (using or with the intent to use the domain for services and products commercialisation in the respect of traditional business practices).
The timetable for the implementation of “.biz” is as follows:
1. Until August 6th 2001 : reservation of the “.biz” domain name was optional.
2. From June 25th trough September 17th:
- Trademark owners and others submit domain name applications to registrars.
- Applicants are notified of any outstanding IP claims
3. September 26th through September 30th: “.biz” domain names are assigned by the lottery
4. October 1st: “.biz” domain names go “live” subject to IP claims and open application process begins with the first come first serve rule.
5. Until October 30th, successfuly registered domain names placed on hold for 30days if subject to IP claims. IP claimants can amicably resolve disputes or file a STOP (that is a dispute resolution) action within 20 days from notification of award to others.
We nevertheless have to point out that :
- This new registration system solely concerns the cases of frauds but not conflicts between two good faith trademark owners;
- And also this registration costs 99 dollars.