The rules for the out-of-court resolution of top-level domain names in the People’s Republic of China (.cn and. 中国) are unique. This mode of dispute resolution, created by the China Internet Network Information Center (CNNIC), is mainly governed by two legal instruments: the national method of resolving disputes relating to top-level domain names (China ccTLD Dispute Resolution Policy, here- hereafter, “cnDRP”) and the related rules of procedure (China ccTLD Dispute Resolution Policy Rules, hereafter, “cnDRP Rules”). The cnDRP draws its particularity from its Article 2. Indeed, unlike other regulations for the out-of-court resolution of disputes relating to domain names[1], Article 2 of the cnDRP sets a time bar limit to initiate a cnDRP complaint: three years from the date of registration of the domain name (since June 18, 2019; previously, it was two years). Article 2, in its new wording, applies retroactively to all domain names, including those registered before June 18, 2019. What impact does the extension from two to three years have on trademark owners, complainants in cnDRP proceedings?
Article 2 seeks to induce parties to exercise their rights within a reasonable time[2]. This objective calls for two comments. Firstly, the three-year period is consistent with the general rule applicable under Chinese law. Secondly, all out-of-court proceedings relating to domain names share a common goal: to combat abusive registrations by providing an adjudicative forum where third-decision makers can settle cases expeditiously. In this regard, Article 1 of the Rules of Procedure of the cnDRP refers to the objective of promptness.
Reactivity time can be decisive when a company is confronted with unauthorized and illegal, even illicit, use of its brand. Indeed, the use of a domain name can constitute, beyond the only reprehensible act of cybersquatting in itself, a civil tort (such as counterfeiting and unfair competition), and even a criminal offense (such as counterfeiting, fraud (phishing), attacks on computer systems or identity theft). In extrajudicial domain name case law, there are countless cases where brand owners had to act right away.
From a strategic standpoint, it is recognized that the level of threat, potential or actual, varies according to two primary constituents: the degree of confusion (in particular if the domain name is identical to the brand) and the nature of the use of the domain name, taking into account that the latter can be harmless one day and, suddenly, turn out to be harmful. The reaction time of trademark holders depends on the defense strategy deployed, which may vary depending on multiple factors: the degree of the threat, the brand itself (especially in terms of its distinctive ability), possible territorial priorities (rarely, China is not one) and, for the vast majority of companies, the budget allocated to the protection of the brand. A defense strategy requiring a short reactivity time requires the use of monitoring software developed to detect the existence of domain names similar or identical to the trademark concerned. Such tools also make it possible to monitor the use and the evolution in the use of the domain name. To better understand surveillance reports and their results, it is recommended to resort to a legal analysis carried out by lawyers specialized in the protection of trademarks in the digital environment.
In order to determine the degree of responsiveness of brand owners, the author took two samples of decisions from those rendered under the auspices of the Hong Kong International Arbitration Center (hereafter, HKIAC). Sample A contains 200 decisions for which complaints were filed between March 7, 2016, and June 10, 2019. Sample B includes 49 decisions whose complaints were filed between June 18, 2019, and September 22, 2020 (see Table 1).
The cnDRP jurisprudence developed under the Hong Kong International Arbitration Center (HKIAC) auspices includes several cases in which trademark owners have shown remarkable, combative responsiveness. Table 2 provides some examples, the reaction time being defined as the time elapsed between the registration of the domain name and the filing of the complaint.
* According to the complainant, but this argument was rejected for lack of evidence
A careful analysis of the complaints’ response times shows that, under the two-year limitation period, 31 complaints were filed less than a week before the expiration of the deadline (Table No. 3), which represents 15.5% of the decisions of Sample A. Sample B does not contain any complaint lodged “at the last minute”.
** Complaint declared inadmissible by HKIAC.
The author’s data analysis indicates that complaints filed “at the last minute” are much less numerous in Sample 2 (4%) than in Sample 1 (15.5%). While it is too early to draw definitive conclusions about the effects of extending the limitation period[3], it is clear that extending the time bar reduces pressure for brand owners. Interestingly, the average reaction time is roughly the same, despite the time bar extension (see Table 3).
The determination of the average reaction time is based on the number of days between the date of registration of the domain name and the filing of the complaint.This calculation requires some adjustments in two specific situations. First, when the complaint involves more than one domain name, the date we have used is the date of registration of the oldest domain name. Second, in the presence of a domain name whose lifespan has exceeded the time limit to act, but which has been the subject of a transfer, it is the date of the latter that we have selected[4]. As shown in Table 4, the results for Sample A and Sample B are substantially similar.
The late filing of a complaint should attract the attention of the domain name panelist. In a few cases, the panelist raises, ex officio, the question of the admissibility of the complaint. Although the cnDRP does not require the panelist to verify the admissibility of the complaint, it would be reasonable to be concerned[5], especially when the deadline is approaching[6]. In any event, it seems desirable to consider this verification as a duty when the complaint is filed on the same day as the deadline expires. This situation is not uncommon in Sample A[7], and brand owners can expect objections from the defendant on the grounds of time bar[8]. When the complainant was filed on the same day as the deadline expires, a few panelists usefully referred to Article 49 of the Rules of Procedure.[9] The latter specifies that “the initial date is excluded in the time limit”.
It is imperative to keep in mind that once the limitation period has passed, in the absence of any other available and expeditious remedy, the cost of the domain name increases suddenly and sharply. Therefore, it is preferable for the trademark owner to file a complaint as soon as possible.
Footnotes
[1] “197. The WIPO Interim Report recommended that a time bar to the bringing of claims in respect of domain names (for example, a bar on claims where the domain name registration has been unchallenged for a designated period of years) should not be introduced. It was considered that such a measure would not take into account that the underlying use of a domain name may evolve over time (with the consequence that the use of a domain name may become infringing through, for example, the offering for sale of goods of a different sort to those previously offered on the website); that any related intellectual property rights held by the domain name holder may lapse; and that a time bar would in any event be undesirable in cases of bad faith (…) 199. It is not recommended that claims under the administrative procedure be subject to a time limitation” (WIPO, Internet Domain Name Process. The Management of Internet Names and Addresses: Intellectual Property Issues, Final Report of the WIPO Internet Domain Name Process, April 30, 1999, paras. 197 to 199).
[2] As recalled, e.g., in DCN-1900883, REALME 重庆 移动 通信 有限公司 v. 浙江 孟子生 物 科技 有限公司, 12 June 2019, <realme.cn>, transfer.
[3] The number of decisions in sample A being four times greater than that in sample B.
[4] Decision DCN-1800824 was not taken into consideration because the date of transfer of the domain name was uncertain and marked a difference of 604 days.
[5] Some panelists do not hesitate to arrogate to themselves the power to verify that the complaint was filed on time (see, for example, DCN-1700727; DCN-1700772; DCN-1700784; DCN- 1800800; DCN-1800821; DCN-1800873; DCN-1900877; DCN-1900886; DCN-1900890).
[6] See DCN-1800825; DCN-1900887; DCN-1900919; DCN-1900890.
[7] Table 3 shows 14 examples.
[8] See, for instance, DCN-1800823; DCN-1700768; DCN-1700761.In this regard, brand owners should be aware that a growing number of cybersquatters have a good grasp of legal tools and their loopholes
[9] DCN-1800825; DCN-1800823; DCN-1800800; DCN-1700772; DCN-1800823; DCN-1800825.
