Peculiarities of National Cybersquatting

Nataliya V. Misnik

Intellectual property is a rapidly changing area of the law which deals with the formulation, usage and commercial exploitation of original creative works. The majority of issues that arise within this area revolve around the boundary lines of intangible property rights and which of those rights are afforded legal protection. The abstract quality of the property rights involved presents a contrast to other areas of property law. Furthermore, the rapid changes occurring in this field raise topical debates over such things as peer-to-peer networking (e.g. music piracy on the Internet) and cybersquatting — the use by another of a domain name that is substantially similar to the trademark.

What is cybersquatting?

Cybersquatting is registering, selling or using a domain name with the intent of profiting from the goodwill of someone else’s trademark. It generally refers to the practice of buying up domain names that use the names of existing businesses with the intention of selling the names for a profit to those businesses.

The history of cybersquatting

The practice that’s come to be known as cybersquatting originated at a time, when most businesses were not savvy about the commercial opportunities on the Internet. Some entrepreneurial souls registered the names of well-known companies as domain names, with the intent of selling the names back to the companies when they finally woke up. Panasonic, Fry’s Electronics, Hertz and Avon were among the “victims” of cybersquatters. Opportunities for cybersquatters are rapidly diminishing, because most businesses now know that nailing down domain names is a high priority.

In the United States of America and in European countries resolution of domain name disputes has become a rather popular area of intellectual property practice. In contrast to the USA, European countries, and even Russia, domain names disputes in the Ukraine arise very rarely. As far as we know, none of famous multinational companies doing business in the Ukraine has faced cyber squatting practice in the .UA domain zone. But, taking into account the rapid development of the Internet in the Ukraine in recent years, it appears that domain names disputes will become more widespread in the Ukraine in the near future.

How to fight cybersquatting

Until recently Ukrainian legislation lacked any specific acts and regulations governing trademark protection on the Internet in general and domain name protection in particular.

But since 2000 the Ukrainian Parliament has adopted several amendments to the existing statutes in order to set out some specific rules relating to the Internet and domain name protection.

Today the most significant regulations in this area are specified under the On the Protection of Rights to the Marks for Goods and Services Act of Ukraine and On the Protection against Unfair Competition Act of Ukraine. Besides, this Act introduced the term “domain name” for the first time in Ukrainian law. This term was defined in Article 1 as a name designated for the identification of resources on the Internet. According to the afore-mentioned law, the unauthorized use of signs identical or similar with the trademarks in domain names is recognized as violation of the rights of trademark holders. And those who commit such infringements have to recover all damages suffered by the original trademark owner. Furthermore, the violated rights may be enforced under Article 4 of the On Protection against Unfair Competition Act of Ukraine. It lays down the terms under which the use of names serving to identify individuals or legal entities in business activities, including trademarks and commercial names, is recognized as unfair competition and sanctioned on a commercial scale.

Preventive measures

If cybersquatters infringe trademarks, libel of a company then the company can, of course, sue.

But domain-related lawsuits can take years and be expensive. Arbitration can be successful, but also can be time-consuming and costly.

Prevention is easier and cheaper. The simplest, easiest and least expensive way for you to protect a company is to register common variations of your domain yourself before someone else can and before any damage is done.

The procedure for registration of domain names in the. UA domain zone is provided by the “Policy of the .UA domain” (hereinafter — the Policy), which were developed by the Administrator of the .UA domain to current ICANN rules, with due regard to recent recommendations of ICANN, CENTR, US DoC, WIPO and international experience.

The Policy contains specific provisions concerning delegation of domain names in the .UA domain zone and certain provisions relating to the procedure of resolving domain name disputes through mediation and arbitration.

In particular, one of the substantial provisions of the Policy applies to probable conflicts between domain names and trademarks. This provision establishes certain restrictions for cybersquatters to register domain names without a proven lawful interest in such registration. In order to protect the lawful interests of the members of the Ukraine’s Internet community regarding their intellectual property rights, private second level domain names within the .UA domain are delegated exclusively in case the spelling or pronunciation of the corresponding full domain name or its second-level component (before the “.” character not including it) coincides with the word mark for goods and services registered in Ukraine (hereinafter — trademark, TM), with regard to which the corresponding registrant has the rights of use on the territory of Ukraine. This delegation is performed regardless of the classes of the International Classifier on the basis of which the TM is registered.

The delegation is implemented exclusively on condition that duly certified copies of the following documents are submitted:

— The Certificate of Ukraine for the trademark or service mark issued by the central executive authority dealing with issues of legal protection of intellectual property;

— The contract for transfer of ownership for the mark or licensing agreement (in case the registrant is not the holder of the Certificate);

— The certificate issued by a translation agency confirming that the spelling or pronunciation of the requested domain name or of its part coincides with the corresponding TM.

Second-level public domains in the .UA domain are delegated on the own initiative of the .UA domain administrator for the purpose of creation of public domain system organized to satisfy the interests of different user communities. When choosing the second-level public domain names in the .UA domain, the .UA domain administrator in the first place considers the opinions and proposals of registrars and of the Ukrainian Internet community.

The period of time for verification of a request for domain name delegation in the .UA domain is 14 (fourteen) calendar days.

The simultaneity period for private domain name delegation requests in the .UA domain is 168 (one hundred sixty eight) hours.

The resolving of domain name disputes in Ukraine

The term “domain dispute” shall, within the framework of the present Policy, imply any dispute, which may arise in connection with the present Policy and its application, including in connection with delegation, re-delegation, cancellation of delegation, refusal of delegation and use of domain names in the .UA domain.

Domain disputes shall be resolved by competent courts pursuant to the procedure.

Domain disputes, in particular, may arise in the following cases:

— If a private domain name or its part delegated to the respondent is confusingly identical with or similar to the TM, in which the claimant has the rights.

— If the claimant considers that the respondent has no right to use the domain name or uses it in such a way that violates the rights and legitimate interests of the claimant.

— If the spelling or pronunciation of the domain name delegated to the respondent is a word or expression that dishonors or disrespects the claimant or is harmful to his business standing.

— If the spelling or pronunciation of the domain name or its part represents surnames, names or pseudonyms of the persons well known in Ukraine without their consent thereto.

— In case of violation by the respondent of this Policy.

— If a public domain name, which is used according to its purpose, or its part is identical or confusingly similar to a certain TM, it shall not be considered a violation of the rights of the holder of the Certificate of registration of such TM.

— If a domain name or its part is identical or confusingly similar to a certain TM, it shall not be considered a violation of the rights of the holder of such TM in case the domain name was delegated to the registrant before the holder of the TM Registration Certificate obtained such Certificate.

Pursuant to the Policy and the contracts, which are concluded in compliance with this Policy and which contain the corresponding arbitration agreements, the registrant, registrar and public domain administrator beforehand agree to the consideration and resolution of domain disputes by one of the courts of arbitration acting pursuant to this Policy and their rules of procedure.

The .UA domain administrator, public domain administrators and registrars are obliged, at the request of such court, to furnish this court with any and all information available at their disposal regarding the dispute, and are obliged to implement the duly drawn up decision of such court.

The court of arbitration determines the day, time and place of arbitration of the domain dispute and notifies the parties in writing about this.

The court of arbitration has the right:

— to demand from the parties, the .UA administrator, public domain administrators, registrars and other persons participating in the arbitral proceedings, to submit all documents and materials necessary for the arbitration of the dispute;

— to hear the witnesses invited by the parties;

— to provide for an investigation.

The award of the court of arbitration shall be made in writing and signed by all arbitrators.

Such award shall include: the date when the award was made; the composition of the court of arbitration; the place of arbitration; the names of the parties to the dispute and their representatives that participated in the arbitral proceedings; the disputed domain name; the merits of the dispute; the explanations of the parties on the merits of the dispute; the reasons upon which the award is based; the conclusion on whether the claimant’s demands are satisfied or rejected; the term and procedure of implementation of the award.

The award of the court of arbitration may be appealed against by interested persons pursuant to the procedure provided for by current Ukrainian legislation.

The award of the court of arbitration shall be binding on the administrator of the public domain, in which the disputed domain name is delegated, within the competence of such administrator determined by the present Policy, within the period of time specified in the award but not less than 10 (ten) business days.

However, domain name disputes may be resolved in Ukrainian courts (courts of general jurisdiction and commercial courts) as well as through mediation and arbitration. Besides, it appears that in certain cases the practice of cybersquatting may be subject to administrative procedures carried out by Ukrainian competition authorities (the Antimonopoly Committee of the Ukraine and its local branches).

Over the last few years cases of cybersquatting have become more popular with many trademark holders complaining that existing mechanisms available to resolve conflicts with cybersquatters are often expensive, cumbersome and ineffective. Domain name registration authorities have also found themselves unwillingly involved in domain name disputes simply because of their role in the technical management of the disputed domain name. As a result of these problems, a number of measures have been taken at international and domestic level to improve the situation.