The 4 classic conflicts of domain names dispute

With the advent of the Third Industrial Revolution, in the second half of the 20th century, the contemporary society started to develop various new technologies. Among them, we highlight the Internet – the creation which undoubtedly has brought the largest impact to the individual life, be it in the way of communication, be it in consumption relations. In the commercial arena, great opportunities have emerged both for companies and for individuals, which started using digital platforms to produce and sell goods, besides their use as a marketing and advertising outlet.

In this scenery, we should highlight that, in the globalized world we live in, the use of the Internet has expanded globally, currently performing a fundamental role in consumption relations, since market disputes have been enhanced in the digital world via e-commerce. As a consequence of e-commerce expansion, it has become clear that the occurrence of conflicts and trouble, especially related to controversies between domain names and other intellectual property rights, has expanded. In this sense, the present article will cover the main controversies concerning domain names, discussing four kinds of conflicts, and will also indicate, at the end, possible means for solution.

By means of a letter combination, a name to be used on the internet is formed, known as domain or electronic address, and the owner may have his/her personal data protected by paying an extra fee, and its publication is only possible by judicial order or a processed lawsuit over the domain. When the company owning the data receives a judicial summon, it delivers all the information which is not involved in the dispute and this procedure is included in the domain registration service contracts.

The main functions of a domain name are: to consolidate the virtual localization on the net and to facilitate the memorization of those addresses. Concerning domain registration, we highlight that a strong growth in the companies’ and natural persons’ intentions to register domain names, just like their trademarks and corporate names, has been verified since end-1990s, so to facilitate the association between those addresses and their clients and consumers.

In this context, the Internet Corporation for Assigned Names and Numbers (ICANN), so to promote the protection of the interests of the owners of domain names and intellectual property rights, has developed, with the support of the World Intellectual Property Organization (WIPO), the Uniform Domain-Name Dispute Resolution Policy (UDRP) and the Regulation for the Uniform Domain-Name Dispute Resolution Policy. We highlight that both documents are considered as the legal milestone regulating the procedure to solve conflicts generated by the registration of domain names performed in bad faith, violating trademark/corporate name rights.

The Uniform Domain-Name Dispute Resolution Policy (UDRP) has established the cases when domain name owners will be subject to mandatory administrative proceedings, in case of claims from third parties to the certified conflict solution centers, as follows:

a) the domain name is identical or confusingly similar to a trademark over which the plaintiff holds rights;
b) the Defendant does not own any legitimate interests or rights over the domain name; and
c) the domain name was registered and is being used in bad faith.

Furthermore, for the complaint to be accepted, it was established that there should be basis for the three requirements detailed above. Concerning bad faith, we should highlight that, due to the difficulty for its proof, the Policy defined, as an example, the circumstances of its exhibition by domain name owners as follows:

a) those indicating that the domain has been registered with the purpose of sale or other transference of the registration to the trademark owner or one of its competitors, for an amount considered as too high in comparison to its costs;
b) the owner has registered the domain name so to avoid the trademark owner to use it;
c) the owner has registered the domain name with the object to prejudice the business of a competitor; and
d) when using the domain name, the owner intentionally attempts to attract, for commercial gain purposes, Internet users, thus creating the possibility of confusion with the Plaintiff’s trademark.

After the appropriate hypotheses for the conflict resolution proceedings established by the legal benchmark, we should discuss, with the purpose of going deeper in the theme at issue, the main controversies related to domain names and other intellectual property rights. We will then discuss four kinds of conflicts, as follows: Cybersquatting, Typosquatting, Multiple Legitimate Rights and Profit Grabbing.

Concerning Cybersquatting, also known as “virtual occupation”, this practice corresponds to the registration of a domain name which is similar or identical to a trademark, with the intention to later re-sell the registration to the trademark owner to make a profit. This started with the “first come, first filed” system, which granted the right to exploit a domain name to the first party to make the registration, thus not considering trademarks and their relative rights, since they are different legal institutions.

We highlight that this kind of practice was mainly verified in the initial Internet period, when the importance to register a domain name and the economic value of the Internet had not yet been envisioned. From this scenery, many people anticipated the opportunity to have a profit with the registration of domain names which are similar or identical to trademarks, giving margin for various legal and extrajudicial disputes, which remain until nowadays.

Typosquatting is a very similar practice to cybersquatting, with the difference that, instead of registering a similar or identical domain name to the trademark, a similar domain name is registered, but with deliberate typo errors, intending to induce to error a person attempting to access the intended electronic address. With this perspective, the purpose is to take advantage of the typo errors committed by Internet users, mistakenly typing the electronic address of the company commercializing or offering services under a trademark which is similar or identical to the domain name, ending up by accessing the wrong electronic address.

In these cases, there is a notorious fraud, which may and should be challenged by the Judiciary Branch, and may happen in natural (not always fraudulent) ways, e. g. a company is the owner of a trademark and another company, in good faith, registers a domain which is identical or very similar to that trademark, wherein both may be used simultaneously in the market to identify services or products with no similarity between them, so to avoid confusion or association between the trademarks, as per Art. 124, item XIX, of the Brazilian Industrial Property Law.
This practice also shows that, besides intending to have a profit with the transference of the domain name to the trademark owner, the parties practicing this kind of conflict usually aim to promote their own services or products, by taking advantage of the fame of the original domain name owner, and even to perform another practice – Phishing – consisting of a kind of theft of personal information, such as identity and credit card numbers.

Concerning Multiple Legitimate Rights, it is important to highlight that this kind of conflict is different from the others as presented above, since both the involved parties have legitimate rights to the ownership of a domain name. It generally consists of a conflict between the owners of identical trademark registrations, in different classes, for a domain name, being thus the convergence of multiple legitimate interests.

We should highlight that this conflict is the consequence of a clear divergence between trademark and domain name registrations, since, while domain names are unique, there may be, according to the specialty principle, the registration of identical trademarks in different classes, besides the possibility of trademark registrations in different territories.
Furthermore, we envision that, since there is no legal regulation on this issue, or on a solution for domain name controversies, the “first come, first filed” principle is applied to the cases concerning this controversy, by maintaining the domain name with the owner who registered it first.

Last but not the least, profit grabbing consists of a very similar practice, if not identical, to cybersquatting. The difference between them is the fact that, while the main intention of the latter is to make a profit with the transference of the domain name to the trademark owner, the purpose, in profit grabbing, is to make a profit from the economic exploitation of the website, with no future transference.

In this perspective, we can verify that, nowadays, the practices of acts generating conflicts between domain names and other intellectual property rights have adapted themselves, and thus started to develop other strategies to make profit with domain names, as in the case of profit grabbing. In this sense, we have noticed that the practice of cybersquatting, very common in the early days of the Internet, has been substituted with this new practice, which search for profit is not only based on the later transference of the domain name, but rather in its maintenance.

In general, despite the use of the virtual theme for crimes committed via internet, its consequences are very real and reach the daily life of any citizen. In the early days of internet expansion, everything on this issue was very intangible and surreal, or at least considered that way by the majority of people, while nowadays, reality knocks at our doors and we know that there may be various kinds of transgressions within just one click of distance, often by a distraction of the user.

The routes of these crimes are hard to receive the desired safety, going through domains, passwords, registrations and IPs, by malicious people having some deeper knowledge of the nets of the virtual world.
Losses are great and have various sizes in case of an attack to a system, and we know that there are “companies” working in the search of how to invade domains, passwords and registrations, while the legislation lacks its definition as a typical fact, but it is an illicit act.

For its independent and innovative personality, the internet does not have commands to limit and censor or at least control it, thus becoming an endless search for uniform decisions, concepts or precedents.

The traditional legal concepts are basic for those which now emerge and for the future, but the adaptation between justice and internet will have reached the searched ideals in a very near future.