The legal nature and protection of domain names

(published on BussinessNews.gr)

Have you recently noticed any relevance between your company’s domain name and another in national or international level? If so, it is likely that you have been the “victim” of unfair competition by another business, which may distract your clients or damage your reputation with practices that are not compatible with the ethics of commerce. It is also likely, in your attempt to register a domain name, to find the page either occupied or blank; and it is possible that you have been informed about this unpleasant event from an anonymous e-mail, which may ask for money in order to release the page. In this case you may have been a “cybersquatting” victim. Such unpleasant practices that have even happened to colossal worldwide companies, should not leave other businesses feel helpless (An interesting case was the one of Amazon Inc., which a decade ago discovered with surprise that a bookstore in Syros Island had registered the domain name “www.amazon.gr”).

In order to make understandable the importance of the domain name in the contemporary (e-commerce) trade, the distinctive function it performs, the conditions for its protection and the limits imposed by law, as well as the legal “weapons” for an enterprise to defend its rights, we must analyze some legal concepts. In the end, we will refer to an international domain name conflict that our law firm handled successfully, so as to give hope to the businesses that have experienced similar incidents as the one of our client. More specifically:

Α. THE DISTINCTIVE FEATURES

 The distinctive features are means of a business’ personalization and are categorized as follows: those that distinguish the persons (name, business name), those that distinguish the businesses (distinctive title, distinguishing marks), those that distinguish the goods (trade names, configurations), etc. Some common characteristics of distinctive features are the fact that they create exclusive rights on intangible and tangible goods and that the main factor for their protection is the principle of time priority. Some distinctive features such as the name, the business name and the distinctive title connect their birth to the actual fact of their use in transactions (de facto system), while others, such as the trademark, connect their birth with the formal act of registration or with a declaration (formal system).

B. DOMAIN NAMES – CATEGORIES

 A domain name in reality corresponds to a digitally-encoded IP address of a server, in which the files of a web page are stored. However, since a numerical IP address is impossible to memorize, the  domain names were invented, which consist of at least three and not more than twenty-four alphanumeric characters, with or without reasonable logic, with one or more words separated by several marks, so that they are accessible to users.

There are three categories of domain names:

  • The generic top-level domains (e.g. .com, .net, .edu, .gov),
  • the country code top-level domains (e.g. .gr, .uk), and
  • the infrastructure top-level domains (.arpa, which will not be of interest to us in this article because such are used exclusively for web nodes).

C. THE DOMAIN NAME REGISTRATION – DISPUTE SETTLEMENT AT NATIONAL AND INTERNATIONAL LEVEL

C.1. Country code top-level domains: Country code top-level domains are registered with the national registries of each jurisdiction. In Greece, the competent authority is the National Telecommunications and Post Commission (EETT), which has entrusted the management of Internet domain names to the Institute of Technology and Research – Institute of Information and Technology (ΙΠ/ ΙΤΕ).

In national level disputes between country code top-level domains, the challenged party may appeal with the procedure of interim measures against ΙΠ/ ΙΤΕand request the conflicted domain name’s deactivation. By a decision of a second-degree court, the complainant can succeed the domain name’s deletion from the domain names’ registry.

C.2. Generic top-level domains:

The registration of Generic top-level domains is conducted by the private nonprofit organization, under the name “Internet Corporation for Assigned Names and Numbers” (ICANN), established in California, USA. ICAAN, in cooperation with the World Intellectual Property Organization (WIPO), has established rules for the protection of intellectual property rights on the Internet, which are included in the texts entitled “Uniform Dispute Resolution Policy for Domain Names” (UDRP) and “Rules for the Uniform Dispute Resolution Policy for Fields” (The Rules).

In international level, the Competent Authority to resolve disputes between a generic top-level domain name owner and any third party claiming a legitimate right to the registered domain name is WIPO, pursuant to UDRP. The process of extrajudicial settlement of the dispute is mandatory.

D. THE DOMAIN NAME’S DISTINCTIVE FUNCTION

 Regarding the issue of the domain name’s distinctive function, the court practice supports that even though the domain name has no primary distinctive function, when it is used as a distinctive characteristic for a person or business on the Internet, then it should be indirectly considered as a distinctive title and trade name because, like the latter, it is primarily personalized and recognizable. Thus, if it is used for a long time as a distinctive characteristic for a person or business on the Internet, it acts as a quasi-distinctive title and trademark that enjoys the same protection as the distinctive features of the material world. The freedom for anyone to use any kind of name would cause enormous or irreparable damage to the business established in the trade with the name in question.

E. DOMAIN NAMES’ CONFLICT WITH THE (“CLASSIC”) DISTINCTIVE FEATURES

 In the event of a conflict between distinctive features and domain names, the principle of time priority, coming from the industrial property law, applies here as well. As a result, the proprietor of an older distinctive sign may claim the obstruction of the usage of the new identical or similar sign on the Internet. Thus, the confusing similarity of the domain name, as well as the similarity of the activity of the domain name’s holder with a corresponding earlier distinctive feature, etc., clearly supports the supremacy of the older feature. In view of the above, the domain name should enjoy protection equivalent to that of distinctive features, and vice versa.

To assess the risk of confusion in case of a domain name’s conflict with a distinctive feature, the proximity or affinity of the economic sectorsshould be a matter of investigation. There should be no likelihood of confusion between similar distinctive features as to the origin of the services offered and advertised, when they originate from different sectors of activityand the relevant public is not identical nor has any affinity.

 F. CONFLICT BETWEEN DOMAIN NAMES/ A SUCCESSFUL INTERNATIONAL CASE HANDLED BY OUR FIRM

Recently, our law firm has represented one of our principals, being a Greek company, in an international level conflict between domain names, with a positive outcome, since all our assertions have been substantiated and accepted. Our principal requested and finally succeeded the transfer of a generic top-level domain name registered by a foreign undertaking, which was identical to its own. The dispute was resolved through the WIPO’s mandatory out-of-court procedure, according to UDRP, as the case was based on a generic top-level domain (see above C.2.).

As regards the historical background of the case, the Greek company under the name “ORIGINAL SENSES P.C.”, having a strong domestic and international dynamic in the tourism sector, registered two domain names: www.originalsenses.grin 2008 and www.originalsenses.comin 2011; the domain names were identical to the company’s trade name and distinctive title, as well as to two trademarks it had registered for its services.

The opponent, a business established abroad, also trading in the tourism industry, adopted the same distinctive title as the Greek company in 2016, despite being known in the commerce for many years with a completely different distinctive title. In the same year, the opponent registered the exact same domain name with the Greek company but with another ending (generic top-level) and also registered two national trademarks abroad with identical wording. A few months later, in 2017, the Greek company discovered the domain name of the foreign undertaking and sent an out-of-court letter requesting the cessation of the offense. The foreign undertaking responded with the same way, merely claiming that it was legally empowered to use this name.

Subsequently, our principal filed a relevant application before WIPO requesting the cease of offense provoked by the foreign business as well as the transfer of the domain name of the latter. Our main allegations were the following:

a) The disputed domain name was identical with our older ones.

b) The opponent did not have any rights or legitimate interest in the disputed domain name.

c) The opponent used the disputed domain name in bad faith as it was being used to confuse consumers into believing the opponent’s business is that of the complainant or is authorized or approved by the complainant. The Complainant’s reputation is worldwide and the opponent was seeking to attract its customers.

The opponent denied our allegations, claiming that the Greek company did not actually use the generic top-level domain name “.com”, as this redirected to the Greek domain name “.gr”. It also refused that it was acting in bad faith, while silencing the question as to why and pursuant to what criteria it chose the specific name for its business and as its domain name.

Pursuant to paragraph 4(α) of UDRP, the complainant must prove each of the following elements:

(i) the Disputed Domain Name is identical to or confusingly similar to a trademark or service mark in which the Complainant has rights;

(ii) the Respondent has no rights or legitimate interests in the Disputed Domain Name;

(iii) the Disputed Domain Name has been registered and is being used in bad faith.

The sole panelist after reviewing the background of the case decided that all of the aforementioned criteria were fulfilled and substantiated by the following facts:

a) The opponent knew the Greek company as well as its type of commercial activity; one of the elements supporting this claim was that both companies advertised the same exotic travel destinations on their own websites;

b) the exact same domain names;

c) the fact that both domain names consisted of a combination of two English words that are not used for tourist companies and services, and no other travel agents were found anywhere in the world having even a similar name;

d) the opponent did not succeed in proving and documenting the reason it chose this domain name for, and

e) last and foremost, the applicant proved that the other party did not have a legitimate interest in the disputed domain name on the following grounds: The Greek company had an excellently organized site that clearly demonstrated its services and its global destinations, having around 20 employees and proving that it has been operating for more than a decade and registered its domain name in 2008. The other company, on the contrary, had a site advertising similar services, did not provide data to prove its size, the number of its employees and its establishment in the market, and registered its domain name in 2016.

Also, the fact that the foreign company had registered two trademarks under the same name did not give it a legitimate interest, since such trademarks were filed in order to reinforce a legitimate interest which was, in essence, plausible and unreliable. The panelist concluded that the trademark registration was likely obtained to bolster the registration of the disputed domain name and it does not, therefore, serve to confer a legitimate interest.

Moreover, as regards the opponent’s bad faith the panelist held the following: “For the same reasons as discussed above in relation to bona fides the Panel concludes that the Respondent must have known of the Complainant and must have realised confusion would result when he adopted an identical name for an identical or very similar business carried out over the Internet and directed at an international market. The overall impression created by the Respondent’s website suggests that the Disputed Domain Name was registered by the Respondent in order to establish an online business which was likely to confuse Internet users into believing that the Respondent’s website was operated by, or with the authority of, the Complainant. Strikingly it would have been straightforward for the Respondent to take steps to dispel any confusion (for example by the use of an appropriate disclaimer) had he wished to avoid confusion arising – no such steps were taken.

Finally, the Panel’s decision ordered the transfer of the opponent’s domain name to our principal.

Η.        CONCLUSIONS

  • The legal theory has not yet formed a self-sufficient legal form for the domain name; however, the court practice has determined that domain names should be given a quasi-function of both a distinctive title and a trademark when used as distinctive characteristics for a person or a business on the internet.
  • There are three categories of domain names, the main of which are the generic top-level (e.g. .com, .net, .edu, .gov) and the country code top-level domains (e.g. .gr, .uk).
  • Each category’s domains are registered in different authorities and the conflicts are resolved following a special procedure.
  • The principle of time priority is applicable in case of conflict between «classic» distinctive features and domain names.
  • In case of domain name conflicts, there are certain criteria for resolving the dispute, such as the risk of confusion, the existence of a legitimate interest, the bad faith, which are examined on a case-by-case basis.

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