Trademark Owners Beware: Anti-Cybersquatting in China

Let’s push aside the academic debate about the nature of domain rights, namely, whether the right to register a domain name is an independent form of intellectual property right or just an extension of exclusive rights inherent in the ownership of a trademark. Rather, let’s focus on the practical question of what a trademark owner or domain name holder can do to protect his legitimate rights accordingly in China.

First off, what is cybersquatting? It arises in the unique context of a conflict between a domain name holder and trademark owner. If a domain name, containing a recognized trademark, is registered in bad faith for the purpose of infringing on the rights of a mark owner, the holder of the domain name is considered to be a cybersquatter. Four types of squatters exist out there, and a detailed discussion of them is the topic of a law review article. Here, let’s make it almost black and white for ease of discussion—a squatter that purposefully registered the name associated with a trademark with the intention to cause confusion or blackmailing the mark owner; and a suspected squatter whose registration of the a domain name, which having the same name as a recognized brand, was in good faith and does not in essence infringe IP right of the mark’ owner (i.e. the domain name was registered way before the trademark was registered or in use).

In the international arena, pursuant to the Uniform Dispute Resolution Policy (“UDR” Policy) put forth by the Internet Corporation for Assigned Names and Numbers (“ICANN”), a trademark owner can file a complaint against suspected cybersquatters who registered top level domain names in violation of the owner’s trademark rights. Top level domain names (“TLD”) can be exemplified as: .com, .org, .net, etc. Since TLD registrants are bound by the UDR Policy, a plaintiff can file an arbitration complaint thereunder. A favorite venue for such arbitration is National Arbitration Forum. The World Intellectual Property Organization (“WIPO”) also offers arbitration proceedings through which a trademark owner could seek the cancellation or transfer of infringing domain names. Therefore, a trademark owner has two venues to seek redress for a TLD infringer—UDR arbitration or WIPO arbitration, of course in addition litigation in proper jurisdictions.

As to litigation, a trademark owner can sue under the Anti-Cybersquatting Consumer Protection Act or the Federal Anti-Dilution Act, assuming that proper jurisdiction over defendants can be had.

What if a trademark owner finds out that a sub-TLD domain name has already been registered in China, and the domain name used the mark owner’s trademark? Obviously, UDR arbitration is not available since the domain name is not a TLD. Neither is the WIPO arbitration for the same reason. And if the trademark owner happens to be in a country without a judicial treaty with China to enforce judgments against a Chinese defendant, the plaintiff’s right of action in its own jurisdiction is practically meaningless (both the China Law Blog and Korea Law Blog addresed this general topic). With that, a trademark owner’s option is limited to seeking redress in China. And seeking rightful redress and protection in China is fraught with pitfalls due to the fragmented nature of the Chinese law on anti-cybersquatting as China currently does not have a comprehensive law/regulation on point.