European Union: a study on evaluation of practices for combating speculative and abusive domain name registrations
In May 2020, a study entitled “evaluation of practices for combating speculative and abusive domain name registrations,” conducted by Fasano Paulovics, was published by the European Commission (European Commission, “Study on evaluation of practices for combating speculative and abusive domain name registrations”, May 2020: ISBN 978-92-76-20634-7). This is a richly documented and ambitious study that will be of interest to trademark and domain name portfolio managers and domain name litigation specialists. For this article’s purposes, we will focus on two points: cooperation between Eurid and the European Union Intellectual Property Office (EUIPO) and out-of-court settlement of disputes.
Trademarks and domain names are twins. The tendency is to seek some automation in the harmonization of trademark and domain name portfolios. Harmonizing implies that the filing of a trademark is simultaneously accompanied by the registration of the equivalent domain name or vice versa. Trademark and domain name form an inseparable duo (e.g., a European trademark and a .EU domain name). Strictly harmonizing portfolios makes it possible to value not only the portfolios themselves but also each pair, which is all the more appreciated by investors. Concurrency is essential for at least two reasons. First, the simultaneity would reduce the possibilities of speculative trademark squatting or speculative domain name registration (cybersquatting). Secondly, such a mechanism would stimulate businesses’ awareness (especially small and medium-sized businesses) with regard to the management of their intellectual property portfolios, which most often constitute their main asset.
To this end, since 2016, Eurid (the registry of ccTLDs for the European Union) and the EUIPO started to collaborate to integrate .EU domain name registrations into the European trademark registration system (see Study, pp. 22-33). For example, after filing a trademark with the EUIPO, the latter informs the applicants as to the availability or unavailability of the corresponding domain name under with the .EU ccTLD (see. Study, p. 31). The authors of the Study suggest implementing such a mechanism by Eurid, which would then inform the registrant of a domain name about the availability or unavailability of the European trademark. Moreover, such a mechanism has another considerable advantage: alerting the applicant in the event of prior rights. However, we must be careful not to give these tools the virtues they do not have. Indeed, they certainly cannot replace a search for prior rights carried out with rigor by a qualified IP lawyer.
It is permissible to doubt the effectiveness of such an alert system in the face of a cybersquatter’s determination since the latter will always have the freedom to register a similar domain name (typosquatting). Indeed, even if the registrant receives an alert about the possible illegality of the domain name he is considering registering, if his will is to abuse, he will make an abusive registration. Of course, we could consider technical measures prohibiting the registration of domain names identical or similar to trademarks. However, such measures would likely be found to violate freedom of expression, freedom of enterprise, or freedom of creation under the Convention for the Protection of Human Rights and Fundamental Freedoms. Consequently, the methods of prevention being limited, it is necessary to consider the means to resolve the disputes.
Regarding .EU cases, in the context of the out-of-court dispute settlement procedure in force (the so-called “ADR”), the applicant must pay at least 1300 euros. This sum will never be returned to the complainant, which is contrary to the idea of European justice. Lines of reflection are being considered. The first concerns mediation (see Study, not. pp. 100-101). However, to ensure its long-term effectiveness, mediation can only take place between parties in good faith. Indeed, it would be incoherent to imagine that the cybersquatters would participate in the mediation with all the goodwill required. In any case, in the long run, mediation would systematically benefit cybersquatters, since it would only have the effect of lowering the cost of acquiring the domain name by the complainant. On the other hand, the implementation of a fast-track arbitration (see Study, p. 74) would transform the panelist into an arbitrator, which would give him, in particular, the power to order the reimbursement of costs incurred in the context of the procedure or even to order damages. Such a legal mechanism would be based on the New York Convention on the recognition and enforcement of arbitral awards, to which all European Union states are members. The success of such an arbitration mechanism would be conditioned by an affordable cost and by the assurance of accurate identification of the holders of domain names by the registrars. In the event that the registrar is unable to identify the holder of the domain name, the registrar will be liable.