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Cybersquatting in China and Taiwan
Will Authorities Insure Trademark Protections?

Oct. 27, 2000 (Wang & Wang) As Network Solutions Inc., the U.S. domain name registrant, prepares to begin registration of non-English domain names for the top-level domains, the number of domain names is again increasing exponentially.



The issue of whether trademarks registered by others as a domain name should be canceled on behalf of the trademark owner, or should be treated merely as addresses, remains contentious. Called "cybersquatting" by those who believe that the registrants have no legitimate claims, but are simply committing a hold-up on trademark owners, the practice is increasingly on the defensive with Domain Name authorities.
 
Recent disputes in China and Taiwan, have tested local authorities' will to protect trademarks as domain name registrants.  In the first case tried in China on behalf of a foreign trademark owner, a Chinese courts.  Some domain name registrants, afraid that bad faith will be an issue, have tried to demonstrate their own innovation. For example, Beijing Cinet, a registrant of an estimated 2,500 domain names, including at least hundreds of foreign trademarks, argued to a Beijing court that its registration of Ikea.com.cn was the spontaneous result of its own creativity.  Cinet claimed that it intended to establish a voice mail service on the web, and Ikea stood for Internet Kea Bird, the Kea bird being similar to a parrot.  (The bird's name in Chinese is not at all similar to "kea".) 
 
In at least two cases filed against Cinet thus far, the Chinese courts have ordered Cinet to relinquish the disputed domain names.  The High Court decision, along with a Guidance Opinion issued by China's Supreme Court, shows one doesn't need to be listed on China's register of verified famous trademarks to receive protection as a famous mark.  However, on the reasoning of the Beijing High Court decision, a trademark must be registered in China to be protected as a famous mark.
 
The International Trademark Association (INTA), many of whose members have seen the usurpation of their world famous trademarks by Cinet, prepared a letter to the Beijing Court hearing Cinet's appeal.  The INTA submitted information on international trends in protecting trademarks from "cybersquatters". INTA's brief, prepared and submitted by the law firm of Wang and Wang, listed various legal bases under China's existing legal regime to prohibit cybersquatting.
 
China does not yet have any law similar to the U.S. Anti-Cybersquatting Act, nor is it likely to do so in the near future.  China's current laws which can protect against cybersquatting are its Anti-Unfair Competition Law, and its civil code, as well as the Trademark Law and application of the Paris Convention on Industrial Property.  Application of the Anti-Unfair Competition Law is strengthened by a Supreme Court Guidance Opinion issued this summer. The Guidance Opinion, sent down to all the lower courts in China's five-tier court system, directs courts to apply the Anti-Unfair Competition Law and carefully scrutinize the actions of the registrant for evidence of bad faith, such as having no business purpose in registering the domain name except to sell the domain name to the trademark owner or those trading off the trademark. 
 
Similar reasoning was applied by Taiwan's Fair Trade Committee, the authority competent to deal with such disputes in Taiwan.  In that case, Carrefour proved its fame in Taiwan, and established that the domain name registrant had no prior use of the name for any businesses or tradenames.  The Committee found that the Taiwan domain name registrant had no legitimate business purpose in registering the domain name. 

The Chinese courts and Taiwan Committee have reasoned along lines very similar to British courts in the One in a Million cases, and the Indian court in the Yahooindia.com case, as well as US cases such as Toeppen.  Such decisions recognize that there is a close connection between trademarks and domain names because typing in a trademark is the easiest way to locate a source of the goods or services branded by such mark.  Decisions like Ikea in China and Carrefour in Taiwan are good news for trademark owners seeking to protect their marks in an increasingly global market, and good news for those who believe that strong intellectual property protection encourages creativity and innovation.

Please send comments, questions and article proposals to information@smartpros.com.

2000, Wang & Wang. All Rights Reserved.

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