China: Bridging DNDRC Decision and Judicial Judgment on Domain Name Dispute

Last Updated: 10 May 2011
Article by He Wei and Wang Yaxi

When a domain name is in conflict with the prior rights of others (e.g. the trademark rights, the rights of the company name, etc.), there are two approaches of settling the disputes: 1) the prior right holder may file a complaint to one of two domain name dispute resolution centers, or 2) the prior right holder may bring an action to the court or refer the dispute to arbitration. For the sake of efficiency and cost control, the prior right holder will typically seek a resolution from a domain name dispute resolution center (1) ("DNDRC"), on the condition that the disputed domain name has been registered for less than two years.

However, a problem arises when both proceedings are initiated. That is, during or even after a DNDRC panel has rendered a decision ("DNDRC decision"), the complainant or defendant in the proceeding at DNDRC may still bring the same dispute to the court at the place where the China Internet Network Information Center ("CNNIC") is located or refer it to arbitration. In light of this, some form of conciliation bridging DNDRC decisions and judicial judgments on domain name disputes is required. This article will discuss the interplay of these two proceedings in-depth so as to invite more voices on this subject.

I. The relationship betweenjudicial judgments and DNDRC decisions

At present, there are two domain name dispute resolution centers approved by the CNNIC, namely, the Domain Name Dispute Resolution Center of the China International Economic and Trade Arbitration Commission ("DNDRC of the CIETAC") and the Hong Kong International Arbitration Center ("HKIAC"). Domain name dispute resolution, as an alternative private dispute resolution mechanism, is subject to the CNNIC Domain Name Dispute Resolution Policy ("CNNIC Policy") and the Rules for CNNIC Domain Name Dispute Resolution Policy Regulations ("CNNIC Policy Rules"). Neither arbitration legislation nor the administrative regulations are applicable to these proceedings. Consequently, DNDRC decisions have no legal binding force as do arbitral awards; at the same time, DNDRC decisions cannot be reviewed via administrative litigation channels, as they are not the result of specific administrative acts. Therefore, when the court accepts cases filed by the complainant or defendant in the previous proceeding at DNDRC, it will not examine the legitimacy of the DNDRC decision, nor will it rely on the findings of the decision as a factual basis in deciding the case.

At this point, the issue here is whether the DNDRC decision loses any of its effect when the judicial judgment becomes effective. The basis and scope of the enforcement measure taken by the domain name registration institution at the enforcement stage must thus be discussed to come to any firm conclusion on this issue.

Article 16 of the CNNIC Policy stipulates that,

"If the Dispute Resolution Service Provider rules in its decision to deregister the domain name or to transfer it to the complainant, the domain name Registrar, before enforcing the decision, shall wait 10 calendar days calculating from the date on which the decision is published. If during such waiting period the defendant submits valid proof attesting that a competent judicial authority or arbitration institution has accepted the relevant dispute, the registrar shall not enforce the decision of the Dispute Resolution Service Provider.

A. If any proof attests that the parties have reached a settlement by themselves, the Registrar shall enforce such settlement;

B. If any proof attests that the party that instituted the judicial action or applied for arbitration has withdrawn the submissions of claims in the judicial actions or in the arbitration or the submissions of claims have been rejected, the Registrar shall enforce the Dispute Resolution Service Provider's decision;

C. If the judicial authority or arbitration institution has rendered a judgment or an award that has become legally effective, the Registrar shall enforce such judgment or award."

In light of this provision, only when the submission of claims in a judicial action is withdrawn or rejected, can the DNDRC decision be enforced, otherwise the settlement agreement between the two parties or the judicial judgment shall be enforced. In practice, a more complicated issue may present itself: A DNDRC decision requires the domain name holder to transfer or deregister the disputed domain name, but the domain name holder is not satisfied with this decision and files an action to the court within ten calendar days of the decision date. However, the prior rights holder, as the defendant in the judicial action, does not raise his claims of transferring or deregistering the disputed domain name in their answer or counterclaim. What if the court supports the DNDRC decision by simply dismissing the claims of the domain name holder without addressing deregistering or transferring the domain name? In this instance, how is the domain name registration institution supposed to enforce such a judgment?

Article 38 of the China Internet Domain Name Regulations ("Regulations") stipulates that, "in case the DNDRC decision is in conflict with the legally effective judgment of the people's court or the arbitration institution, the legally effective judgment of the people's court or the arbitration institution prevails." According to this provision, the judicial judgment prevails over the DNDRC decision. In other words, strictly speaking, if a judicial judgment does not order the domain name holder to transfer or deregister the disputed domain name, the domain name registration institution shall not voluntarily transfer or deregister it. In practice, however, the domain name registration institution does not follow this rule. When a judicial judgment does not reverse the DNDRC decision, the domain name registration institution still enforces the previous DNDRC decision.

Therefore, in order to efficiently protect the interests of the prior right holder and prevent the court from merely dismissing the claims of the preemptive domain name holder, the prior right holder is advised to raise their counterclaim in the judicial action, requesting the court to order the preemptive domain name holder to transfer the domain name to him. By these means, the proprietary rights of the domain name can be clearly determined in the judicial judgment.

Meanwhile, the authors also suggest that the paragraph 2 of Article 16 of the CNNIC Policy to be revised as "if any proof attests that the party that instituted the judicial action or applied for arbitration has withdrawn the submission of claims or the claims in the judicial actions or in the arbitration or the submission of claims or the claims have been rejected, the Registrar shall enforce the Dispute Resolution Service Provider's decision", so as to sufficiently include possible consequences of the judicial actions.

II. Different standards applied in DNDRC decisions and judicial judgments

Article 38 of the Regulations stipulates, "Decisions of the domain name dispute resolution institution shall only involve the change of domain name holder's information." This effectively states that the DNDRC decision only deals with disputes concerning the proprietary rights; it does not review or comment on the conduct of the preemptive domain name holder. Therefore, as long as a complaint to the DNDRC satisfies each of the three conditions as prescribed in Article 8 of the CNNIC Policy, the claims of the complaint can be supported and the panel will decide either the disputed domain name is to be deregistered or transferred to the complainant.

On the other hand, Article 4 of the Interpretation of the Supreme People's Court on Several Issues Concerning the Application of Laws to the Trial of Civil Dispute Cases over Domain Names of Computer Network ("Interpretation") provides that, when trying cases concerning disputes over the domain names of computer network, the people's court shall come to the conclusion that the acts of the domain name holder such as registering or using the domain name, constitute infringement or unfair competition if the four conditions as prescribed in this provision are met (2). Consequently, whether the behavior of registering or using the domain name constitutes infringement or unfair competition is the key issue when the court tries the domain name dispute. The complainant in the proceeding at DNDRC, as the plaintiff when filing an action to the court, shall not only demonstrate that the four conditions prescribed in the Interpretation are met, but also prove that the preemptive domain name holder's act of registration constituted infringement or unfair competition. This is the difference lies in the standards applied to the DNDRC decision and judicial judgment. It indicates that the prior right holder bears more proof of burden if he tries to get back or deregister the disputed domain name through judicial proceedings.

It shall also be noted that, however, if the domain name holder has merely preemptively registered the domain name but has not set up the website for such domain name or made use of the domain in a business capacity, such conduct can hardly be deemed an infringement of trademark rights. Moreover, the current intellectual property rights legal regime does not recognize the status of domain names as intellectual property. Therefore, domain name is not protected by intellectual property rights regulation. Yet, if the domain name holder makes the domain name iconic during the use of it and gains benefit from it, this domain name thus gains the attributes of property rights and can be protected as a civil right and interest.

III. Conclusion

In summary, domain name dispute resolution, as a new approach to settling domain name disputes in addition to the judicial proceedings, plays an important role in resolving domain name disputes. Nevertheless, due to the nature of the "soft law", this mechanism allows parties to bring an action to the court at any stage during its proceeding, which will result in the bridging of DNDRC decisions and judicial judgments as discussed above. Therefore, it is crucial to distinguish the differences between these two mechanisms, so that comprehensive and effective dispute resolution can be designed in practice and implemented.

(The article was originally written in Chinese, the English version is a translation)


Notes:
1、In China, there are two domain name dispute resolution centers recognized by the China Internet Network Information Center, namely, the Domain Name Dispute Resolution Center of the China International Economic and Trade Arbitration Commission ("DNDRC of the CIETAC") and the Hong Kong International Arbitration Center ("HKIAC"). These two institutions are referred to collectively as the "domain name dispute resolution centers".
2、The four conditions provided prescribed in Article 4 of the Regulations are: The civil rights and interests the prosecutor claimed are legal; The defendant's domain names or the main parts of the domain names are copies, imitations, translations, or transliterations of the prosecutor's; or are the same with or similar enough to the prosecutor's registered trademarks or domain names that concerned public would be mislead;The defendant has neither rights or interests on the domain names or their main parts, nor the reasonable ground for registration or use; The defendant's registration or use has malice".

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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