Amendments to Russia’s Civil Code: Risk or Benefit for Trademark and Domain Name Holders?

As we have previously reported, a number of amendments to the Russian Civil Code paragraphs dealing with intellectual property entered into force in October 2010.

Before the amendments entered into force, Article 1483 gave domain names the status of intellectual property objects; the domain name holders therefore had the opportunity to object to a later registration of an identical trademark.

Under the current Article 1483 domain names are not placed on the same level as intellectual property objects. This regulation change has raised concerns about the potential problem of so-called reverse domain name hijacking or recapture of domain names, i.e. the registration of a trademark with a purpose of obtaining an existing domain name from its current owner, who registered and used it in good faith, before the trademark was registered.

A recent decision adopted by the Ninth Arbitration Appeals Court involving the Russian electronics company Inter Elektrik, is an example of this problem. A physical person Bureshkin Sergey registered the domain name www.interelektrik.ru. Inter Elektrik claimed damages based on trademark infringement of its exclusive rights to the trademark Inter Electrik as part of the domain name. The court reasoned that since the domain name is not mentioned among the IP objects in the Civil Code, the trademark owner is entitled to protect his rights against any unauthorized use of the trademark, including in the domain name. The court disregarded the fact that the domain name had been registered before the similar trademark.

The Court of Cassation overruled this decision, recognizing that in this case, the administrator of the domain name does not infringe the trademark owner’s rights. The judge concluded that the fair use of a domain registered before the trademark cannot be regarded as an infringement.

This decision is consistent with the position adopted by the Supreme Commercial Court on December 2009, when a similar case was dismissed since the domain name was registered before the trademark’s priority date.

However, it should be noted that Russia does not have a common law system and precedents are therefore not taken into consideration. For this reason, we cannot exclude the possibility of decisions similar to Ninth Arbitration Appeals Court’s decision in the Inter Elektrik case. The domain name owners can however avoid such issues by securing trademark rights in advance.

On the other hand, to prevent domain name squatting, i.e. registering or using a domain name with intent to profit from the goodwill of a trademark belonging to someone else, the Federal Antimonopoly Service (FAS Russia) will prevent anticompetitive actions relating to the registration of domain names. Any attempt to register a domain consisting of an existing trademark will automatically run afoul of Article 14(1)(4) of the Russian Federation’s Law On the Protection of Competition and be considered as an act of unfair competition.

Additional control will be exercised with respect to the applications for domain names containing unregistered marks where:

• unregistered marks have been used long before the domain name applications; and
• domain name registration is contrary to the principles of justice and made with intent to obtain an undue advantage

Namely, an investigation may be triggered if:

• the domain name is offered for sale/lease to the person or company (or to its competitors) who owns a trademark contained within the name
• registration of the domain name is made with intent to prevent business competitors from using an unregistered trademark
• registration of the domain name creating a likelihood of confusion with the business of the owner of an unregistered trademark is made with intent to profit from the goodwill of an unregistered trademark belonging to someone else

Infringers will be subject to penalty, which will be determined on a case-by-case basis, depending on the circumstances. According to the deputy head of the unfair competition department, the FAS will be allowed to request from the infringer to modify the domain name or to cease using it.

Despite the fact that in Russia only courts may revoke a registration of a domain name, the FAS position might help courts to resolve the domain names disputes more quickly.

For more information, please contact Alissia Shchichka at our Belgium office.

Source: Article 1483, Part IV of the Civil Code; the Federal Antimonopoly Service (FAS Russia) website; decisions of Ninth Arbitration Appeals Court and The Court of Cassation in Inter Elektrik case