Cybersquatting in China: joint and several liability of the cybersquatter and the registrar

Can a registrar be held responsible for the illegal or illicit use of a domain name registered and controlled by a co-contractor whose Whois data is volatile/misleading? That was the question put to the Beijing courts who have appropriately given an affirmative answer.

LRC is the owner of several “Durex” registered trademarks, including in China. LRC discovered that Mr. W. i) had registered the durex.cn domain name by subscribing to a personal data protection service, ii) had transferred and then acquired it several times, free of charge, with the complicity of third-party natural persons (assuming they exist), via the same registrar (Company A) and iii) had attempted to sell it to LRC at an exorbitant price. This game of hide-and-seek was conducted with the aim, for Mr W., of escaping justice. As for the content of the website, it referred to competing brands. LRC won its case before the Beijing courts, which condemned the cybersquatter and the registrar.

In the first instance, the court ordered the transfer of durex.cn to LRC and ordered Mr W. and Company A to pay the sum of 260,000 yuan in damages, which seems relatively lenient given the circumstances and the bad faith of the principal defendant. Company A appealed to the Beijing Intellectual Property Court and then to the Beijing Superior Court. It argued that it was not the owner of the domain name (in the sense that it had no control over this property) and called upon its status as a simple technical intermediary.

On privacy protection services, the judges indicated that the publicity function of Whois databases is similar to that of the cadastre or the patent public database; Whois records must guarantee the identification of the domain name holders. The judges also recalled that registrars are not allowed to represent domain name holders, even fictitiously. In any case, the use of such a service cannot be diverted from its purpose to commit infringements of third parties rights. In fact, the registrar could have avoided these problems simply by replacing the name of the registrant not with its company name (Company A), but with the words “Redacted”. However, it is not certain that this alone would have enabled the registrar to escape the joint liability.

Indeed, the judges considered that the registrar had failed in its mission of verifying the legality and validity of the documents provided on the occasion of each transfer of the domain name. They went further by considering that Company A knew or should have been aware of the infringement of LRC’s rights since, on the one hand, it provided technical support to Mr W., and on the other hand, Company A appeared to be the owner of the domain name and, finally, the domain name concerned, which is identical to a well-known trademark, pointed to a site containing a large amount of information on products competing with the said trademark. In other words, the Beijing court inflicts a duty of vigilance on registrars and imposes joint liability in the presence of particular circumstances.

Although it may seem harsh, the solution is fair. The joint and several liability of registrars who do not respect their obligation of diligence concerning the exactness of the information displayed in the Whois databases is the most appropriate legal path.

Finally, the judges also considered that Company A was not deprived since the service contract for the protection of privacy included a clause by which Company A reserved the right to sue its co-contracting party.

source : chinacourt.gov.cn, 2021-03-21



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