United States: Domain Name Registration in the New .eu Top Level Domain

Beginning December 7, 2005, certain holders of rights in trademarks registered in nations within the European Union will be able to file applications for domain names in the new .eu top level domain. Since 2000, the European Union ("EU" or "Community") has endeavored to create the .eu top level domain ("TLD") for public and private entities wishing to present a pan-European identity as an alternative to country-specific domain names.¹ The process of launching .eu is nearing completion, and qualified holders of trademarks in EU member nations are strongly advised to utilize the early registration procedures. The following is a brief overview of the general registration and early registration procedures and recommendations for protection of intellectual property rights.

Under the EU’s regulations,² registration of domain names for the .eu TLD is strictly limited to any:

1. company having its registered office,³ central administration or principal place of business within the Community, or
2. organization established within the Community without prejudice to the application of national law, or
3. natural person resident within the Community.

Requiring a nexus to the EU is not a novel concept when compared to the requirements of other country-specific domain names. However, the requirements for registration of a domain name in the .eu TLD are markedly less flexible than other country-specific domain requirements.⁴ Thus, foreign entities without a registered office, central administration, or principal place of business within the EU cannot register for a domain name under the .eu TLD. This holds true even for those foreign entities holding valid EU trademarks. The justification for preventing foreign holders of valid EU trademarks from registering is the Commission’s desire to provide the .eu domain as a means for European entities to demonstrate their European identity.⁵

Instead, for foreign entities holding valid EU trademarks, EURid⁶ has provided a licensing procedure under which such foreign entities can satisfy the residency requirement by entering into a license agreement with a licensee based within the Community.⁷ If the foreign entity and the licensee enter into a license agreement for the registered trademark, the licensee may apply to register the domain name during the first phase of the early registration procedure, known as the "sunrise period," provided that the licensor executes a declaration authorizing the licensee to seek the domain name registration.⁸ However, by executing the declaration and authorizing the licensee, the licensor may not revoke the authorization prior to the end of the validation process. In addition, if the domain name registration is granted, it will be in the name of the licensee, and the domain name registration may be assigned or transferred only to entities that satisfy the residency requirement. That is, the licensor, as a foreign entity, may not have the domain name registered in its name or assigned to it.

Although the general registration process is scheduled to begin on April 7, 2006, holders of intellectual property rights may take advantage of the "sunrise period," which is intended to prevent speculative or abusive registration of domain names. During the sunrise period, holders of member nation or Community intellectual property rights or licensees thereof (and who also meet one of the three applicant residency requirements of Regulation 733/02) may register domain names with EURid before the start of general registration. The sunrise period will be comprised of two phases, each lasting two months.

In the first phase, between December 7, 2005, and February 6, 2006, only those participants who meet one of the applicant residency requirements and who hold registered member nation or Community trademarks (or are the licensees thereof) may register domain names. A subsidiary of a foreign entity with a registered office in a member nation may register if the subsidiary, and not the parent, holds a registered trademark in the EU or if the parent has granted the subsidiary a license in the trademark, in which case the parent and subsidiary should follow the requirements of the licensing scheme discussed above. The sunrise period application fee for holders of registered trademarks (or licensees thereof) is € 45.⁹

In the second phase of the sunrise period, from February 7, 2006 through April 6, 2006, all those eligible to register domain names during the first phase as well as holders of all other prior rights¹⁰ recognized by a member nation or the Community may register. Qualified foreign entities registering domain names during this second phase must provide the legal basis for recognition of a prior right under a nation state’s law or EU law.¹¹ Documentary evidence of prior rights is also required for both phases of the sunrise period and is subject to verification by EURid’s validation agent. EURid will only permit registration of the complete name as reflected in the documentation proving the prior right.¹² The sunrise period application fee for holders of other prior rights is € 85.

If more than one valid claim is made for a single domain name, EURid will assign the domain name on a first-come, first-served basis. Specific procedures for filing may be found at http://www.eurid.eu/en/documents/registration_policy_v1_0.pdf.

To register a domain name, applicants must complete an application for registration through one of EURid’s accredited registrars.¹³ Pre-registration with accredited registrars is underway.¹⁴ Once the registration periods begin, the accredited registrars will enter their pre-registrations into EURid’s automated system. In the event certain domain names are the subject of multiple pre-registrations, EURid’s automated system will determine on a first-come, first-served basis which pre-registration will eventually lead to a definitive registration.¹⁵

Although foreign entities that do not meet the qualification requirements set forth in Regulation 733/02 cannot register a domain name, Regulation 874/04 provides a means for holders of trademarks to combat speculative and abusive registrations. In this way, a holder of an EU trademark not meeting the qualification requirements under Regulation 733/02 can, once a speculative or abusive domain name has been registered, seek revocation of that domain name through the process outlined below. Article 21 of Regulation 874/04 states:

A registered domain name shall be subject to revocation, using an appropriate extra-judicial or judicial procedure, where that name is identical or confusingly similar to a name in respect of which a right is recognized or established by national and/or Community law, such as the rights mentioned in Article 10(1), and where it:

1. has been registered by its holder without rights or legitimate interest in the name; or
2. has been registered or is being used in bad faith.

Thus, holders of prior rights must prove the registrant lacks a legitimate interest or the registrant’s use is in bad faith. Bad faith may be demonstrated where:

1. the domain name was registered primarily for the purpose of selling the domain name to a party holding a right validly recognized or established in the EU;
2. the domain name has been registered in order to prevent the holder of a validly recognized or established name in the EU from reflecting this name in a corresponding domain name;
3. the domain name was registered primarily for the purpose of disrupting the business of a competitor;
4. the domain name was intentionally used to attract Internet users, for commercial gain, to a web site by creating a likelihood of confusion with a name corresponding to a right validly recognized or established in the EU, such likelihood relating to the source, sponsorship, affiliation, or endorsement of the web site; or
5. the domain name registered is a personal name for which there is no demonstrable link between the holder and the domain name registered.¹⁶

Disputes regarding abusive registration of domain names may be resolved through claims under national law or the Alternative Dispute Resolution ("ADR") procedures established by the European Commission. ADR may be initiated by any party if a domain name has been registered in violation of Article 21 of Regulation 874/04, and the Czech Arbitration Court will oversee the procedures.¹⁷ When the ADR request is filed, the Arbitration Court will notify EURid to suspend the domain name from cancellation or transfer until the dispute is resolved.¹⁸ If the domain name is revoked, it will be transferred to the complaining party if the party applies and is eligible.¹⁹ Foreign entities ineligible for registration therefore can only prevent speculative or abusive registration, but have no right to the domain name even if they prevail.

For qualified holders of EU trademarks or other prior rights recognized by the laws of member nations or the Community, registration during the sunrise period is highly advisable. If the holder of the trademark is itself a qualified entity, then the holder should register during the first phase of the sunrise period to secure its rights to the domain name. If the holder is a foreign entity which cannot meet the residency requirements, it may wish to grant a license in the trademark to an eligible entity in the EU, which can then register the domain name in its name. Although there exists a low risk of speculative or abusive domain name registrations during the first phase, filing at the opening of the first sunrise period phase is recommended because, if two different entities hold identical valid trademarks in different member countries, the entity which files for registration first will be granted the domain name under the first-come, first-served policy.

Qualified entities not holding registered trademarks under national or Community law, but having other prior rights recognized under a member nation’s law, may wish to register as early as possible during the second phase of the sunrise period. Because EURid will consider valid applications in strict chronological order, entities with relatively weak prior rights recognized by the relevant member nation’s laws may wish to pre-register as soon as possible with an accredited registrar. Registrars forwarding applications for the same domain name to EURid must also present the applications in strict chronological order.²⁰

Foreign holders of registered trademarks or prior rights without a registered office, central administration, or principal place of business in the EU – and which do not use the licensing scheme – may not register for a domain name in the .eu TLD and may only contest a speculative or abusive use of a domain name after that name has been registered. Currently, there is no indication in any regulation that EURid will attempt to

screen any abusive registration of domain names, no matter how facially abusive. To prepare for possible ADR or court proceedings, holders of trademarks not meeting the registration requirements may wish to gather necessary documentation to support the existence of a trademark or prior right recognized or established by member nation or Community law.

The chart below provides information for companies not meeting the .eu residency requirements regarding the periods at which different entities may apply for .eu domain names. However, given the first-come, first-served procedures, it is advisable to choose an accredited registrar as soon as possible and pre-register for a domain name.

Holders of rights in trademarks registered in nations within the EU are encouraged to use the sunrise period as soon as possible to register the corresponding .eu domain names.

If you are interested in more information about these developments, please contact any of the attorneys in Sutherland’s Intellectual Property group, including: