As
more and more Chinese people log on to the internet, the value of
domain name rights increases. Guizeng (Wayne) Liu offers the latest
laws and judicial decisions affecting intellectual property in cyberspace.
Domain names identify and distinguish Internet
users and, as such, constitute intellectual
property. As e-commerce
develops and becomes more and more pervasive across the globe, we
see a growing number of intellectual property conflicts in cyberspace. In response, countries have been developing
laws to deal with Internet-related disputes and building up a body
of court cases relating to the Internet. China is no exception.
n Trademark infringement
In China, registering a trademark gives
the owner an exclusive right to use that mark in connection with approved
goods or services. In
most domain name disputes, the IP owner will use its trademark registration
as the legal basis by which to attack an unauthorized domain name
holder. However, if the other party uses the unauthorized domain name
to market goods or services that are sufficiently different from the
trademark registrant乫s own products, then the IP owner cannot
treat the domain name dispute as a trademark infringement. Instead,
they have to deal with it as a case of unfair competition. For example,
in the dispute over the use of the domain name www.ikea.com.cn,
the court held that the defendant's registration and use of the domain
name did not infringe the plaintiff乫s trademark right, but rather
constituted an act of unfair competition.
n
Well-known marks
Since joining the WTO, China has built up a more comprehensive
set of administrative and legal mechanisms than ever before to protect
well-known trademarks. Being awarded well-known mark status can bring
commercial benefits both in traditional business transactions and
in any Internet-related dealings. Anyone who uses a well-known trademark
as a domain name without authorization prevents the rightful owner
from using the mark to carry on normal business. If the parties request
it, the court will consider specific evidence and the circumstances
of the case to decide whether the mark is well known, regardless of
whether it is registered in China or not.
Once the plaintiff乫s mark has been recognized as a well-known
mark, the defendant's registration and use of the domain name may
be ruled to be an infringement, as well as an act of unfair competition.
In a case relating to www.dupont.com.cn, the court decided
that Dupont has been a well-known mark before the defendant registered
the domain name. In this case, the plaintiff乫s mark DuPont was
treated as a well-known mark and the scope of protection extended
to the Internet. Without any authorization to do so, the defendant
used DuPont within the third level domain name www.dupont.com.cn.
The use of the word DuPont in this domain name constituted copying
of the plaintiff's mark and would have caused confusion among the
relevant public. The court found that the defendant violated the plaintiff's
well-known trademark rights. Since it had no legitimate grounds to
register the domain name then its purpose was to prevent the plaintiff
from lawfully realizing the commercial benefits of the well-known
mark DuPont. The court held that the defendant had committed an act
of unfair competition according to China's
General Civil Code, Anti-Unfair Competition Law and the principles
laid down in the Paris Convention.
n
Getting recognition
When deciding whether a mark is well known, Chinese
courts generally follow the TRIPs agreement
and consider whether the mark is well known among the relevant public
in China.
In the case relating to the domain name www.viagra.com.cn,
the court found that the plaintiff primarily used "
"
(the Chinese characters for Viagra) rather than the word Viagra when
marketing their product in China. As a result, Viagra was not considered
a well-known mark in China.
Article 14 of the Chinese Trademark Law says that the court will consider
the following factors when it decides whether a trademark is well
known or not:
n
Reputation of the trade mark
in the relevant sector of the public;
n
Duration of use of the trade
mark;
n
Duration, degree, and geographical
scope of any publicity for the trade mark;
n
History of protection of the
trade mark as a well-known mark; and
n
Other factors contributing
to the reputation of the trade mark.
n Trade name
In cases of domain name disputes, if the use
of a trade name as part of a domain name is likely to cause confusion
among the relevant consumers, then use of the name may constitute
an act of unfair competition.
Under
the Anti-Unfair Competition Law, anyone conducting business is required
to adhere to the principles of equality, fairness, honesty and credibility
and to observe generally recognized business ethics. "Unfair
competition" in this law refers to acts that contravene the provisions
of the law, damage the lawful rights and interests of other business
people and disturb the socio-economic order. The General Civil Code
also prevents an enterprise name from being copied.
However,
there have been many conflicts between the owners of trademarks and
trade names as well as domain names and trade names. This is because
the Administration for Industry and Commerce (AIC) has jurisdiction
over the registration of enterprise names at the local, regional,
provincial and national levels, while the Trademark Office is responsible
for registering trademarks. In the case of the domain name www.franke.com.cn, the plaintiff, a company selling
kitchen products, had registered the enterprise name 
(Franke in Chinese characters) with the SAIC.
The defendant, who also deals in kitchen products and equipment,
registered the domain name www.franke.com.cn in July 2000 to
market and sell its products online.
The court ruled that since
was the plaintiff's official trade name and and Franke were corresponding brand names
that had gradually been recognized by Chinese consumers, then the
defendant's domain name was likely to cause confusion among the public,
constituting unfair competition.
n
Cybersquatting
If a party registers a domain name without intending
to use it itself, but with the intention of offering it for sale at
higher price, renting it out or transferring it to make an unjustified
profit, or if a party registers a domain name with the intention of
preventing a trade mark owner from registering the domain name, that
party has committed an act of unfair competition.
Generally
speaking, if a domain name dispute does not constitute a case of trademark
infringement, the courts will deal with the case under the Anti-Unfair
Competition Law. For example,
in the case of the domain name www.whisper.com.cn, the court
found that the domain name was likely to cause confusion among the
public as to who was the genuine owner.
More importantly, the defendant was an Internet information
consulting company that did not actually make use of the domain name
to conduct business. It appeared that the defendant had registered
the domain name with the purpose of preventing the plaintiff from
registering it, which constitutes an act of bad faith. The defendant
was held to have committed an act of unfair competition.
n The status of domain name rights
Domain names have become valuable corporate assets
used to identify companies and products both in traditional business
and on the Internet, and as such, have become another form of intellectual
property. If a domain
name has established a certain degree of reputation, it can be registered
and protected as a trademark or a trade name.
Even if the reputable domain name is not registered as a trademark
or a trade name, it can enjoy a right of goodwill and the holder can
seek protection under the Anti-Unfair Competition Law.
In practice, if a defendant's domain name (or the major part
of its domain name) is identical or similar to a plaintiff's domain
name and is likely to cause confusion, the defendant is guilty of
unfair competition.
Sometimes,
some less distinctive or inherently weak domain names may become more
distinctive by way of extensive use and advertising and come to enjoy
legal protection as trade marks.
In re: 
and 
, the court held that
these domain names were sufficiently distinctive and should be protected
by law.
n
Effective defenses
There are a number of situations in which a defendant
will be deemed to have a legitimate reason for registering a domain
name. First, if it can
present evidence to show that its domain name had acquired a certain
degree of reputation before the plaintiff lodged the lawsuit. Secondly if its domain
name is distinguishable from the plaintiff's trademark or domain name
and finally, in other circumstances in which the defendant did not
act in bad faith. In
a case relating to www.tide.com.cn, the plaintiff registered
its mark Tide in 1976. The
defendant showed that it began to use the mark Tide for its computer
products in 1993 and used Tide as part of its English corporate name
in the US market.
In 1998, the defendant registered the domain name www.tide.com.cn. The court found that the defendant's registration
and its use of the domain name in the dispute did not constitute an
act of trademark infringement, nor an act
of unfair competition. In
another case relating to the domain name www.pda.com.cn, the
court found that the acronym pda is an abbreviation
of personal data assistant, a generic term used in the computer industry.
The court decided that the defendant had a legitimate reason
to register and use the domain name and that doing so did not constitute
trademark infringement or unfair competition.
n Jurisdiction
Since July 2001, domain name disputes arising
from the registration and use of a domain name have been regarded
as civil lawsuits in China. Domain name disputes are tried by the Intermediate
People's Court in the city in which either the infringing act took
place or the defendant resides.
If it is difficult to determine either of these locations,
then any place where there is a computer terminal containing the disputed
domain name will be considered as the place where the infringing activity
occurred. This means the plaintiff has much more
room to select a court of jurisdiction.
In re: www.franke.com.cn, both the plaintiff and defendant
lived in Foshan,
Guangdong province, but the plaintiff
filed the lawsuit in the Number 2 Intermediate People's Court in Beijing, where China Internet Network Information
Center (CNNIC) is located. CNNIC
is the organization that manages Chinese domain names.
If
either of the parties to a domain name dispute is foreign national,
foreign business entity or a stateless person, an intermediate People's
Court of China can still claim jurisdiction.
The Court's decision will be delivered to the registrar, their
branches or representative offices in China
for execution regardless of whether the foreign party is based within
or outside of China.
n Legal remedies
Once the court decides that the domain holder's
registration and use of the domain name constitutes an act of infringement
or unfair-competition, the court may order the defendant to stop the
infringement by canceling the domain name. Alternatively it can order the plaintiff
to register the domain name properly.
Furthermore, if the plaintiff has suffered actual damages,
the court may award compensation.
In re: 
and 
,
the court ordered the defendant to transfer the domain name to the
plaintiff as well as pay damages.
As
the internet rapidly evolves into a widely used platform for e-commerce,
domain names have become just as valuable an intellectual property
in cyberspace as traditional intellectual property rights, such as
trade marks, patents and copyright, are in real life.
But enforcing domain name rights on the Internet is more challenging,
which means that resolving disputes through judicial proceedings usually
offers a more effective solution for IP owners.
