© Springer-Verlag Berlin Heidelberg 2015Yimeei Guo (ed.)Research on Selected China’s Legal Issues of E-Business10.1007/978-3-662-44542-6_14
14. How Would the Domain Name Dispute—Ikea “Cybersquatting” Case Be Decided Under American Law?
S.J.D., Tulane University, New Orleans, USA
Net and Law Institute, Peking Law School, Beijing, China
(Published by “(Taiwan) Proceedings of 2000 National Science and Technology Law Conference”, November 23, 2000, pp. 779–790)
Domain name can be considered the addresses of the Internet, e-mail is sent, and Web pages are found through the use of domain names. As an example, the Web address for the Perkinscoie Web sites is www.perkinscoie.com while e-mail to Sui-Yu Wu (Attorney at Law in Taipei Branch) is sent to firstname.lastname@example.org (both using the “perkinscoie.com” domain name). Domain names are more than just address, however, since they can be selected by the “addressee” and are usually closely associated with a particular service or product.
Because of the increasing popularity of the internet, companies have realized that having a domain name that is the same as the company or product name can be important part of establishing an Internet presence. To obtain a domain name, an application must be filed with an appropriate register. However, when companies attempt to obtain their desired domain name, they may discover that their desired domain name is already taken. When this happens, the company can either choose a different name (e.g., china_airline instead of china airline) or fight to get the domain name it really wanted (e.g., McDonald, MTV). These fights are called domain name disputes.1
When a dispute over a domain name occurs, the parties can always turn to the courts. For example, in the states, companies that do bring a court action must present legal arguments on why a domain name registered to someone else should be canceled or transferred to an organization who was not fast enough to register the name first. Historically, those arguments were based on trademark law or dilution law (the latter will be discussed in II of this article). It was sometimes difficult to present a strong case under the traditional principals of trademark law, especially when the party seeking to obtain a domain name either could not prove a likelihood of confusing (which is required under trademark law)2 or was a famous individual who never technically established trademark rights in their name.
In response to intense lobbying from trademark owners and famous individuals, Congress passed the Anticyberquatting Consumer Protection Act3 in November, 1999. This act made it easier for individuals and companies to take over domain names that are confusingly similar to their names or valid trademark. To do so, however, they must establish that the domain name holder acted in bad faith (Detail discussion on ACPA and the relevant cases will also be in Part II of this article).
“Cybersquatting”—the practice of registered a domain name that matches another company’s trademark—may have begun in the USA as mentioned afore, but it is now a world wide issue. In China, it is not so difficult to register a domain name (the presiding organization is CNNIC. It also open the experimental system of Chinese domain name on January 18, 2000), but it is more difficult to pursue cybersquatters because of the lack of laws that address this problem than to do so in the states.
For example, in the PDA domain name preemptive registration case,4 one of the grounds of the court to reject the plaintiff’s accusation is as follows. Registration of domain name is not the right enjoyed by the right holder of the mark, and meanwhile, registration as a domain name of other’s trademark is not one of the trademark infringing acts under Art.38 of the Trademark Law and Rule 41 of its Implementing Regulations.5 This article will explain the legal status of cybersquatting in China by analyzing the recent decision of Inter-Ikea Systems B.V. v. Beijing CINET Inf. Co. Ltd.6
Finally, this article tends to make some suggestions for Chinese better solution to the “cybersquatting” problems as the conclusion.
14.2 How to Fight Against “Cybersquatting” Under American Law
14.2.1 The Federal Trademark Dilution Act
In addition to claims of trademark infringement, domain name disputes often include an allegation that use of the domain name dilutes a famous mark owned by the plaintiff. The legal authority can be found in the Federal Trademark Dilution Act of 1995 (15 U.S.C. §1125(c))(hereinafter the anti-dilution statute), added dilution as a cause of action available to trademark owners. The Act provides:
“The owner of a famous mark shall be entitled….to an injunction against another person’s commercial use in commerce of a mark or trade name, if such use begins after the mark has become famous and causes dilution of the distinctive quality of the mark……”
Senator Leahy, who supported the anti-dilution statute, said: “that this anti-dilution statute can help stem the use of deceptive Internet address taken by those who are choosing marks that are associated with the products and reputations of others.”7 Therefore, the courts had already applied such statute to the domain name disputes, according to the above-mentioned words.
Under the anti-dilution clause, the plaintiff would have to show the mark was “famous” and that the use of the domain name actually dilutes this famous mark. Since the anti-dilution clause does not require showing a likelihood of confusion, plaintiffs may find this prescription a helpful aid in obtaining domain names “stolen by others.” On the other hand, the requirement that the mark be famous should limit these types of domain name disputes to those circumstances involving marks which are immediately associated to a single source.8
The notable application of the anti-dilution statute in practice was in the case of Panavision Int’l LP. v. Toeppen.9 Panavision involved the best known cybersquatting defendant, Dennis Toeppen who reserved hundreds of domain names corresponding to well-known trademarks, such as Delta Airline, Neiman Marcus, Eddie Bauer, Lufthansa, Intermatic, and Panavision. Both the district court and the Ninth Circuit held that because Toeppen had attempted to extort $13,000.00 from Panavision, this was sufficient use “in commerce” to bring the Federal Dilution Act into play. This was consistent with the ruling in Intermatic, Inc. v. Toeppen, 947 F. Supp. 1227 (N.D. Ill. 1996), which found that Toeppen’s intention to arbitrage the “intermatic.com” domain name constituted a commercial use.10
14.2.2 Anti-Cybersquatting Consumer Protection Act
On November 29, President Clinton signed into law the Anti-cybersquatting Consumer Protection Act which amends the Lanham Act to provide a cause of action against cybersquaters. The act provides a cause of action where, without regard to the goods or services, a person: (i) Has a bad faith intent to profit from a protected mark, and (ii) registers, traffics in, or uses a domain name that (I) is identical or confusingly similar to a distinctive mark; (II) is identical or confusingly similar or dilutive of a famous mark; or (III) is a trademark protected by reason of section 706 of Title 18, U.S.C., or Section 220506 of Title 36, U.S.C..
In determining whether a person has a bad faith intent, the legislation lists nine factors which a court may consider (but is not limited to). These factors include (I) the trademark rights of the person in the domain name, (II) the extent to which the domain name consists of a legal name of the person, (III) the person’s prior use of the domain name in connection with goods or services, (IV) the person’s noncommercial or fair use of the mark in a site accessible under the domain name, (V) the person’s offer to sell the domain name for financial gain without having used the domain name or (VI) the person’s prior conduct indicating a pattern of such conduct, (VII) the person’s providing false contact information when applying for the domain name, (VIII) the person’s acquisition of multiple domain names which are identical or confusingly similar to the marks of others, and (IX) the extent to which the domain name is distinctive or famous.
Courts are given the remedy of being able to order forfeiture or cancellation of a domain name to the owner of the mark, as well as statutory damages of between $1,000 and $100,000 for each domain name, as the court considers just. The owner of a mark is given the option of filing an in ram civil action against the domain name itself, such as Porsche tried in Porsche v. Porsche.com, 51 USPQ2d 1461 (E.D. Va. 1999). This can prove very helpful to famous mark owners, especially where the cybersquatters are located overseas.
The act also provides for a cause of action when a person registers a domain name that consists of a name of another living person with intent to profit by selling the domain name to that person or a third party.
So far, there has been numerous domain name disputes involving “cybersquatting” brought to the courts. In United Greek, Inc. v. Klein d/b/a Greek 101, 00-cv-0002 (N.D. N.Y., May 2, 2000), the court entered a default judgment awarding statutory damages and attorneys fees against a defendant who failed to respond to a complaint under the ACPA. The plaintiff sough the transfer of the domain names somethinggreek.com, united greeks.com, and united greek.com in addition to statutory damages of $10,000. The court awarded plaintiffs $15,950, including attorney’s fees. In Morrison and Foerster LLP v. Wick, 94 F. Supp. 2d 457 (D. Colo. 2000), the law firm of Morrison and Foerster alleged that the defendant’s registration of www.morrisonfoerster.com