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Cybersquatting: How to Reclaim Your Domain Names?

2016-09-01

It is not uncommon that reputable companies find their trademarks registered by the others as domain names since domain names are allocated on a first-come-first-served basis. The act of registering another company’s trademark as domain names with a view to profiting from that company’s goodwill, often by offering to sell to that company or his competitor the registered domain names at an inflated price, is generally referred to as “cybersquatting”. A company’s trademark may also be registered by competitors as domain name for the purpose of disrupting the company’s business. Mechanisms of domain name dispute resolution are available in Hong Kong for trademark owners to protect their rights against such bad-faith registration by cyber squatters, no matter whether the trademarks have been registered in Hong Kong or elsewhere.


Domain Name Arbitration

The laws of intellectual property in Hong Kong offer protection to trademarks. Registering another person’s trademark as domain names may be an act of trademark infringement as well as passing-off. Trademark owners can apply to court for injunction against such registration and seek compensation for loss suffered as a result of the infringement of intellectual property rights.

However, the expense and time involved in court litigation can be substantial.

For domain name disputes, arbitration provides a more cost-effective resolution. Each registrant of country code top level domains of “.hk” or “.香港” (“HK Domain Name”) is bound by the Domain Name Dispute Resolution Policy (“DNDRP”), which is incorporated into every agreement for use and registration of a HK Domain Name and requires the registrant to submit to a mandatory arbitration proceeding. In other words, to register a HK Domain Name a person first has to agree to follow the DNDRP and submit to arbitration proceeding for potential disputes regarding that HK Domain Name. Hong Kong International Arbitration Centre (“HKIAC”) is so far the only approved provider of services for mandatory arbitration proceeding of HK Domain Name.

Ground for complaint

According to the DNDRP, a registrant is required to submit to the arbitration proceeding when a complaint against the registration of a HK Domain Name is made on the grounds that:

1.        the registrant’s HK Domain Name is identical or confusingly similar to a trademark or service mark in Hong Kong in which the complainant has rights; and

2.        the registrant has no rights or legitimate interests in respect of the HK Domain Name; and

3.        the registrant’s HK Domain Name has been registered and is being used in bad faith.

Evidence of bad faith can be shown by the following:

(a)     the registrant acquired the domain name primarily for selling, renting or otherwise transferring it to the trademark owner or its competitor at a price in excess of the direct cost of that acquisition; or

(b)    the registrant has registered the domain name in order to prevent the trademark owner from reflecting the mark in a corresponding domain name, and the registrant has engaged in a pattern of such conduct; or

(c)     the registrant has registered the domain name primarily for the purpose of disrupting the business of a competitor; or

(d)    by using the domain name, the registrant has intentionally attempted to attract for commercial gain Internet users to an on-line location, by creating a likelihood of confusion with the complainant’s mark.

Whilst it is not necessary for the trademark be registered in Hong Kong or elsewhere before its owner can initiate the arbitration proceeding, registration of one’s trademark is always preferred and will allow the owner to proceed on the ground of trademark infringement, in addition to passing-off against cyber squatters

Enforcement

A successful complaint can result in changes, cancellation or transfer of the HK Domain Name. According to the DNDRP, once the arbitration panel at HKIAC has made a decision upon a complaint, the registrar of the HK Domain Name or the Hong Kong Internet Registration Corporation Limited (“HKIRC”), the corporation designated by the Hong Kong Government to administer the registration of HK Domain Names, will give effect to the decision.

Fees and procedures

According to the DNDRP and the relevant rules of arbitration procedure, to initiate the arbitration proceeding a complainant should lodge the complaint at HKIAC. Depending on the number of arbitration panelists requested by the complainant to be one or three, the total fee payable to HKIAC by the complainant for commencing the arbitration proceeding is either HK$10,000 or HK$20,000.

If HKIAC is satisfied that the complaint application is without deficiency, within 3 business days of receiving the application it has to forward the complaint to the registrant of the subject HK Domain Name, at which time the arbitration proceeding commences. In most case the registrant will then have 15 business days to submit a response, failing which the dispute will be decided based on the evidence submitted by the complainant.

The arbitration panel should be appointed at earliest within 5 business days after the submission of response by the registrant of the subject HK Domain Name, or the lapse of the time period for that submission. Generally within 15 business days of the appointment of the arbitration panel, the panel should give its decision to HKIAC, who shall within 3 business days of its receipt forward the same to the complainant, the registrant and HKIRC.

All the decisions made by the arbitration panel are final and binding. If the arbitration panel decides that the subject HK Domain Name registration should be cancelled or transferred, the domain name registrar will, before implementation, wait for 10 business days after the registrar and HKIRC are informed of the decision.

The timeline of the arbitration proceeding can be summarised as follows:

Time (after the last event)

Events

First event

Complaint lodged and fees paid

Within 3 business days

Commencement of arbitration proceeding: HKIAC forwarding the complaint to the registrant of the subject HK Domain Name

Within 15 business days

Submission of response by registrant

Within 5 business days (at earliest)

Appointment of arbitration panel

Within 15 business days

Arbitration panel giving its decision to HKIAC

Within 3 business days

HKIAC forwarding the arbitration panel’s decision to the parties and HKIRC

After 10 business days

Registrar of the subject HK Domain Name implementing the arbitration panel’s decision if cancellation or transfer is ordered

Based on the timeline as set out in the DNDRP and the relevant rules of arbitration procedure, a dispute over a HK Domain Name can in general be resolved in around two months from the lodging of complaint. Compared with litigation at court, the arbitration proceeding provides a much swifter mechanism to resolve a domain name dispute.


Arbitration for other top level domain names

In addition to HK Domain Names, HKIAC is also approved to provide arbitration services for disputes concerning many other top level domain names, including “.com”, “.net”, “.org” and “.cn”. Different top level domain names may be subject to different dispute resolution policies and arbitration rules. For disputes concerning top level domain names like “.com”, “.net” and “.org”, the policies and rules of arbitration are substantively similar to those applying to a HK Domain Name dispute.


Concluding remarks

Arbitration proceeding mandatory to the domain name registrants provides a cost-effective dispute resolution mechanism for a company who finds its trademark infringed by a cyber squatter. Yet as domain name disputes may lead to contentious legal proceedings, to protect one’s interests it is always advisable to seek legal opinion at an early stage.




For enquiries, please contact our Intellectual Property & Technology Department:

E: ip@onc.hk                                                                    T: (852) 2810 1212
W:
www.onc.hk                                                                F: (852) 2804 6311

19th Floor, Three Exchange Square, 8 Connaught Place, Central, Hong Kong

Important: The law and procedure on this subject are very specialised and complicated. This article is just a very general outline for reference and cannot be relied upon as legal advice in any individual case. If any advice or assistance is needed, please contact our solicitors.

Published by ONC Lawyers © 2016


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