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How to protect IP rights in cyberspace
As more and more Chinese people log on to the internet, the value of domain name rights increases. Guizeng (Wayne) Liu of King & Wood offers a guide to 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.
Trade mark infringment
In China, registering a trade mark 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 trade mark 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 trade mark registrant's own products, then the IP owner cannot treat the domain name dispute as a trade mark 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's trade mark right, but rather constituted an act of unfair competition.
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 trade marks. 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 trade mark 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'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 had been a well-known mark before the defendant registered the domain name. In this case, the plaintiff'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 trade mark 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.
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 [Multiple line equation(s) cannot be represented in ASCII text] (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 trade mark is well known or not:
•reputation of the trade mark in the relevant sector of the public;
•duration of use of the trade mark;
•duration, degree, and geographical scope of any publicity for the trade mark;
•history of protection of the trade mark as a well-known mark; and
•other factors contributing to the reputation of the trade mark.
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 trade marks 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 trade marks. In the case of the domain name www.franke.com.cn, the plaintiff, a company selling kitchen products, had registered the enterprise name [Multiple line equation(s) cannot be represented in ASCII text] (Franke in Chinese characters) with the SAIC. The defendant, who also deals in kitchen products and equipment, registered the domain name www.frankc.com.cn in July 2000 to market and sell its products online. The court ruled that since [Multiple line equation(s) cannot be represented in ASCII text] was the plaintiff's official trade name and [Multiple line equation(s) cannot be represented in ASCII text] 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.
Cybersquattinq
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 trade mark 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.
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 trade mark or a trade name. Even if the reputable domain name is not registered as a trade mark 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: [Multiple line equation(s) cannot be represented in ASCII text] and [Multiple line equation(s) cannot be represented in ASCII text] the court held that these domain names were sufficiently distinctive and should be protected by law.
Effective defences
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 trade mark 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 trade mark 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 trade mark infringement or unfair competition.#p#分页标题#e#
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 a 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.
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 cancelling 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: www.[Multiple line equation(s) cannot be represented in ASCII text].com and www.[Multiple line equation(s) cannot be represented in ASCII text].net, 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.
If a domain name has established a certain degree of reputation, it can be registered and protected as a trade mark or a trade name
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