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What Modern Businesses Need to Know Regarding Geo Names and Jurisdiction in Domain Name Disputes

As it stands, legal practitioners, registrants and brand owners are forced to navigate the online landscape in fairly low visibility. However, once you acknowledge the fact that you are driving in foggy conditions, you can adjust your approach to avoid any wrong turns.

The Internet has provided an unprecedented number of opportunities while raising far-reaching legal issues. It has created a complex matrix of national laws, global circumstances and new definitions—or, at least, definitions in progress. The turmoil over Brexit and the international implications of the EU General Data Protection Regulation are signs of the times; as are issues surrounding domain names. We all initially think that we have a pretty good understanding of domain names, but once you scratch the surface and look a little closer, they still lack an official international legal definition. The fact that question marks remain regarding how domain names should be legally categorized is concerning when you think about the substantial financial value that they can hold, as well as the fact that there are more than 330 million registered domain names and almost 4 billion internet users worldwide.

This article takes a closer look at the issues relating to the definition of ‘domain names,’ how this ties into trademark law and, subsequently, how jurisdiction and the outcome of disputes are potentially affected.

What is in a (domain) name?

First, the role of domain names has evolved significantly since their early years. As internet usage has increased, domain names have been compared to everything from phone numbers to online real estate, aliases, and addresses. Many people agree that they must logically constitute some kind of property since there is a market in which they are bought and sold. However, exactly what kind of property they are legally, remains unclear. Are they intangible property (but without being intellectual property for that matter), tangible property, intellectual property or a combination thereof? Or perhaps they are an entirely unique kind?

Domain names are used by brands to differentiate themselves from other brands online and for consumers to easier orient themselves among goods and services on the Internet. As such, it has become increasingly necessary to view domain names as something to which certain rights are associated. But can they be regarded as identifiers in the same way as trademarks and service marks? For domain names to be considered in this way, they would need to have the characteristics and functions of these other types of mark, such as serving as an identifier of goods and services from a particular source. Trademarks are commonly registered as domain names, but there are also examples of domain names gaining the status of an unregistered mark through use and awareness. ‘Amazon.com’ is one example.

Further, due to the substantial commercial and financial value that domain names can hold today, another question that has been raised in a number of court cases is whether domain names constitute property that can be subject to attachment or garnishment (i.e., property that a creditor can seize from a debtor, even when the debtor does not possess the property). This question also lacks a uniform answer across jurisdictions.

Clearly defining what domain names are legally (i.e., whether they should be considered property and, if so, what kind) also gives rise to many other questions. For instance, depending on what kind of property they are, can they be seized? Who owns the domain name (is it the registry, the registrar or the registrant) and where is it located? Where something is located matters, especially when it comes to jurisdiction. Jurisdiction plays an important role not only concerning the balance between international comity and national sovereignty, but also for individuals and businesses that need predictability regarding whether their online activities make them liable for suit. In the early days of the Internet, the courts often struggled to apply traditional personal jurisdiction principles (e.g., purposeful availment, minimum contacts and a reasonable connection between the forum and the activities) in cases involving domain names and attempted to draw analogies from older communication forms such as mail and telephone. These often far-reaching applications and analogies were especially unfit to properly manage the rising issue of international cybersquatters and typosqatters, many of which had provided false WHOIS information when registering the disputed domain name and were therefore difficult for the plaintiff to locate. One regulation that eventually addressed this issue was the US Anti-cybersquatting Consumer Protection Act.

A legislative perspective

Under this act, domain names have been considered as some kind of property in rem actions (i.e., when the registrant cannot be located, which is common when it comes to cybersquatting). If a domain name is to constitute property for the purposes of in rem actions, the property must logically be located in one definable geographical place. For these purposes, domain names have been assumed to be located where their registrar or registry is located. Why is this important? Because it determines which court or country has jurisdiction in the event of a domain name dispute, which in turn may differ from the geographical territory in which the party claiming infringement has registered trademark rights.

While the Anti-cybersquatting Consumer Protection Act is national in nature, the UDRP is international in its scope and addresses jurisdiction in a different way. The UDRP is an administrative dispute resolution system specifically created for domain name disputes between domain name registrants and trademark owners, regardless of their nationality. It is contractually mandated through the registration agreement for gTLDs (e.g., ‘.com’, ‘.org’, ‘.global’ and ‘.app’) and certain ccTLDs. Cases are decided by one or three panelists, who have been given the freedom to base their decision on:

  • statements and documents provided by the parties;
  • the provisions of the UDRP;
  • previous case law; and
  • any other principles that they consider applicable.

As such, the panelists can determine whether it is relevant to consider national laws in a certain case.

Once a complaint has been filed and a UDRP process has been initiated, it is important for the complainant to understand the consequences of the ‘mutual jurisdiction’ clause, which is agreed to when filing the complaint. This clause (Paragraph 3b(xiii) of the UDRP) stipulates that if a decision to cancel or transfer the disputed domain name is made by the UDRP panellists and thereafter is challenged by the domain name owner, the complainant will submit to the jurisdiction of the courts either where the principal office of the registrar is located or where the registrant is located according to the WHOIS database. A challenged UDRP decision that gets brought before a national court by the respondent in the UDRP case will include potential trademark territorial issues for the trademark owner that are similar to those regarding jurisdiction under the Anti-cybersquatting Consumer Protection Act.

Similar cases, different outcomes

One case that illustrates the abovementioned situations and how the global nature of domain names collides with national trademark laws and principles—partially due to definition and jurisdiction—is WIPO Case D2000-0505 regarding the domain name ‘barcelona.com’

The case was initially brought before a UDRP panel. The complainant, Barcelona City Council, provided several Spanish trademark registrations that included the term “Barcelona” and claimed that the respondent’s ‘barcelona.com’ domain name infringed those rights. Respondent Barcelona.com Inc was a company located in the United States and owned by two Spanish citizens, which used the domain name as a travel portal with information for people intending to visit Barcelona. The panellist found the domain name to be confusingly similar to the complainant’s trademarks; determined that the respondent lacked legitimate interest and had registered and used the domain name in bad faith; and ordered the domain name to be transferred to the complainant.

Barcelona.com Inc obtained an automatic stay of the UDRP panel’s order to transfer the domain by filing a reverse domain name hijacking claim under the Anti-cybersquatting Consumer Protection Act with the US District Court for the Eastern District of Virginia. However, the court determined that there were no grounds for such a claim and that the disputed domain name should still be transferred to Barcelona City Council.

Barcelona.com Inc went on to file an appeal with the US District Court for the Fourth Circuit, in which the court stated that the use of the disputed domain name was not unlawful since Barcelona City Council did not have a protected trademark under US law. The court argued that the Anti-cybersquatting Consumer Protection Act specifically requires the Lanham Act—rather than foreign law—to be applied, through the wording “file a civil action to establish that the registration or use of the domain name by such registrant is not unlawful under this chapter” (15 USC §1114(2)(D)(v) (emphasis added)). The court further enunciated the territorial nature of trademark law in general and subsequently applied the Lanham Act, establishing that a geographical term cannot be considered a trademark in the United States unless it has acquired secondary meaning. Because there was no evidence of the term “Barcelona” having acquired secondary meaning, the court ruled that use of the domain name ‘barcelona.com’ was not unlawful under US trademark law; therefore, the domain name should remain with the registrant, Barcelona.com Inc.

This decision has far-reaching consequences in that, unless the owner of a foreign mark can prove trademark rights under US law, domain name registrants will be free to register identical or confusingly similar domain names and be protected by the Lanham Act—even if such registrations would have constituted cybersquatting had the brand owners held US trademarks. In other words, the court of appeals’ decision essentially states that national law supersedes international regulations.

Analyzing a similar case in light of the Barcelona.com decision provides further understanding as to what effect the perceived location of a domain name can have on the outcome of a dispute. WIPO Case 2015-2295 regarding ‘britishschoolofbarcelona.com’ had the following circumstances, similar to Barcelona.com:

  • Both parties were Spanish citizens.
  • The domain name consisted of descriptive terms.
  • The complainant had several Spanish trademark registrations that included the disputed term(s).

The panel began by explaining that the UDRP rules give panelists the freedom to decide what, if any, specific national laws should be applied. In this case, the panelist held that Spanish trademark law must be considered since both parties were Spanish—as was the case in Barcelona.com. In both cases, the respondents argued that the complainant’s trademarks were purely descriptive and therefore questioned their validity. However, since the trademarks in both cases were already registered with the Spanish Patent and Trademark Office, any questions regarding their validity would need to be challenged in the Spanish national court, not under the UDRP. For the purposes of the UDRP, the fact that an active trademark registration exists is enough. After establishing that the respondent lacked legitimate interest and had registered and used the domain name in bad faith, the panelist ordered that the disputed domain name ‘britishschoolofbarcelona.com’ be transferred to the complainant.

So far, the case has mostly followed the path of Barcelona.com. However, the main difference is that the registrant in britishschoolofbarcelona.com would have had a very different outlook when it comes to overturning the UDRP panel’s decision. This is because—unlike in Barcelona.com, where US courts had jurisdiction—the respondent in britishschoolofbarcelona.com would have had to rely on Spanish courts and Spanish trademark law if the case was to be tried anew in national court (i.e., in the same jurisdiction in which the trademarks were already approved and registered). As such, the court would likely have come to the same decision as to the UDRP panel.

In other words, two court cases from two very similar UDRP disputes could have had significantly different results due to the ways in which the international nature of domain names and their location intersected with territorial trademark law.

In summary

  • Domain names lack a uniform legal definition and despite having certain similarities with trademarks, there are key differences.
  • Several identical trademarks can co-exist in different classes or territories, while a domain name is unique and global at the same time.
  • The difficulties with defining what a domain name is legally and where it is located for the purposes of jurisdiction can lead to further complexity in cases where the domain name is considered to be located where the registrar is located, despite none of the parties residing in that country. This can further highlight the sometimes odd interplay between different national laws and the international nature of the Internet, as demonstrated in Barcelona.com, where two Spanish parties (although one of them owned a business incorporated in the United States) ended up in a US court to have a case regarding a Spanish mark and a domain name consisting of a Spanish city name tried under US trademark law.
  • Geographical and purely descriptive terms registered as domain names can give rise to a special set of challenges. This is due to the following:
    • The protection of geographical names varies largely between nations; however, when challenging a domain name registration, the complainant moves into international territory.
    • UDRP cases that involve geographical names have resulted in varying outcomes. Therefore, complainants should ensure that they have sufficient evidence to prove either registered or unregistered trademark rights, in order to meet the first requirement of the UDRP—namely, that the disputed domain name is identical or confusingly similar to a trademark or service mark in which the complainant has rights.

Mapping a route ahead

As previously mentioned, legal practitioners, registrants and brand owners must navigate the online landscape in fairly low visibility and can come across situations or circumstances that require either new tools or abrupt adjustments. However, once you acknowledge the fact that you are driving in foggy conditions (figuratively speaking), you can adjust your actions to better avoid wrong turns. Taking all of this into consideration, readers are encouraged to consider the following advice:

Understand your intellectual property – All business owners and IP practitioners should acknowledge that domain names have become a crucial asset for online branding and should understand how they are closely connected to trademarks. Knowing how to manage domain names proactively and safely, as well as how to enforce IP rights online, is a necessity for any modern business. Being aware of the similarities and differences between a domain name and a trademark—as outlined in this article—makes it easier to create a successful strategy.

Know your business – Along the same lines, business owners and practitioners should be mindful of the brand or company name that their new business decides to operate under. As discussed, geographical and descriptive names can be especially difficult to enforce online under many circumstances. Further, it is important to consider:

  • how a new name would work in the event of future international expansion;
  • whether the name can be registered as a trademark and where; and
  • whether the corresponding domain names are available under the relevant TLDs.

These factors are often addressed much too late or in the wrong order, leading to costly consequences and the risk of brand damage.

Manage existing rights closely – For established businesses, closely examining how the company’s IP rights are managed online should be a top priority. This includes reviewing the chosen registrar, assessing enforcement routines and aligning the domain name strategy with marketing and trademark strategies.

Build a strong case – In the event of a domain name dispute, complainants must provide sufficient evidence to prove their trademark rights, especially when secondary meaning is required for unregistered marks. Lastly, complainants must be aware of the mutual jurisdiction clause in the UDRP rules, as well as the general principles of jurisdiction in domain name cases.

(To learn more: “Domain Names - Strategies and Legal Aspects, 2nd edition” ThomsonReuters/SweetandMaxwell.

This article can also be read in the 78th Issue of WTR Magazine, as well as online on WorldTrademarkReview.com)

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