The Challenges of Resolving Ukrainian Third-Level Domain Name Disputes

In recent years, Ukrainian courts have been busy with a growing number of domain name disputes involving third-level subdomains under com.ua, net.ua, and kiev.ua. There have been disputes regarding the domain names ukrspirt.kiev.ua, kaeser.com.ua, metro.com.ua, and vlast.net.ua, to name only a few.

The common issue in these disputes is that the domain names in question were assigned under the country code top-level domain (ccTLD), but the Uniform Domain-Name Dispute-Resolution Policy (UDRP) is not applicable to such domain names.

Additionally, domain-name dispute resolution in Ukraine has been generally shaped by case law rather than by legislation, since the legislation lacks detailed and specific provisions tailored to domain name disputes.

While dealing with a domain name dispute and before initiating a court trial against infringers, an intellectual property (IP) rights holder will face the following challenges:

• Identifying the registrant
• Choosing the right court
• Securing a lawsuit
• Defining the liability of registrars
• Deciding on remedies

While these are not the only challenging issues, they are rather important ones.

Identifying the Registrant

WHOIS databases do not always provide information about registrants. It is like Murphy’s law – if your rights were infringed, you can almost be certain the infringers opted not to disclose their personal information. It is no wonder, as local regulations do not require registrars to make this information publicly available.

To illustrate the laissez faire process of assigning a domain, consider the following registrar statement from the Judgment of the Kirovohrad Regional Commercial Court of July 1, 2011, Case No. 5013/89/11:

The process of domain name registration is carried out remotely via the internet and does not require the provision of identity documents. A registrant individually declares the accuracy of the data he provided and is responsible for it.

When a registrant submits an application for the assignment of a domain name, it means that he, voluntarily and at his own discretion, identifies himself as a member of the community for the benefit of which the public domain name is being administered.

The domain name in question was registered on the basis of a service agreement (a public contract) in accordance with Article 633 of the Ukrainian Civil Code. Article 642 of the Civil Code sets forth that the payment of relevant fees to the service provider is what proves the acceptance of provisions of public contracts. In this case, accordingly, the assignment of the domain name was carried out after the registrar’s invoices were settled. A written contract in the form of an entire written document was not concluded.

Essentially, a registrar does not always know who his client actually is. Consider the following case law excerpt explaining why registrars are so untroubled: Judgment of the Kyiv City Commercial Court of Appeal of September 25, 2013, Case No. 5011-39/8538-2012:

Since one does not know in what activities a domain name will be used, the registrar shall not be held liable for trademark infringements committed by the registrant.

Interestingly, however, registrars are usually among co-defendants in domain name disputes because certain remedies may only be sought by plaintiffs when claims are brought against registrars as well. There has also been at least one dispute in Ukraine in which, by the time it was considered by the court, the registrant ceased to exist as a legal entity and no successors were detected. In the Judgment of the Kyiv City Commercial Court of Appeals of June 7, 2007, case No. 21/71-12/224, the court ruled in favor of the plaintiff, explaining that in such situations the registrar is the proper defendant.

Choosing the Right Court

Depending on the status of defendants and the relations on the basis of which a dispute arose, the dispute can fall under the jurisdiction of either civil courts or commercial courts. Commercial courts deal primarily with cases in which all defendants are legal entities or individuals with the legal status of individual entrepreneurs.

Courts and plaintiffs find it difficult to decide which court to choose when the defendant has a legal status of both a natural person and an entrepreneur. While there are currently no clear guidelines, Ukrainian commercial courts typically apply the following approach, in line with the Kyiv City Commercial Court Judgment of September 10, 2014, Case No. 910/22947/13,when the court reasoned that:

The website owner is a natural person and the founder of the defendant company at the same time. Since this individual also has the legal status of an individual entrepreneur, he was named as a co-defendant. However, based on the case materials and evidence provided, the court found that the domain name is registered in the name of a natural person. Therefore, the part of the claim addressed to the individual entrepreneur shall be dismissed.

Securing a Lawsuit

Delays in securing a lawsuit may lead to the domain name being transferred to a potential defendant who does not fall within the jurisdiction of Ukrainian courts or may alter a plaintiff’s resolution strategy. In an excerpt taken from the ruling of the Dnipropetrovsk Regional Commercial Court of July 27, 2012, case No. 5/5005/6375/2012 the court explained that:

The registrant can request a transfer of the domain name, and the registrar has no legitimate grounds for refusal even when there is an ongoing court trial concerning the same domain name, unless a lawsuit is secured.

Unfortunately, securing a lawsuit does not always help, and the plaintiff might be required to go through the process again. For instance, in the ruling of the Solomyansky District Court of the City of Kyiv of May 15, 2015, case No. 2-239-15, the plaintiff noted that:

Even though in this case the registrar was obliged by a court order to refrain from transferring the domain name to third parties, including other registrars, and from making changes in the database, the said domain name was transferred and is currently maintained by another registrar.

Considering this, a plaintiff should file motions to secure a lawsuit before or at the same time as submitting the lawsuit. Additionally, the plaintiff should enforce court orders in a timely manner, regardless of whether the dispute is handled by a commercial or general civil court.

Defining the Liability of Registrars

IP rights holders often try to bring their claims only against domain name registrars. On August 16, 2016, in a dispute with a registrar regarding trademark infringement, the High Commercial Court of Ukraine ruled, in Case No. 910/1185/15-г, that the lower courts should have properly analyzed if it was indeed the registrar who illegally used the trademark with respect to specific goods, and whether such use could have misled the public as to who was the IP rights holder.

Before this approach was articulated by the High Commercial Court, one could assume that the problematic nature of holding registrars liable for unauthorized use of trademarks originated from the registrars’ lack of knowledge about the registrants’ infringing activities. But now it seems that courts tacitly agree with the registrars’ casual attitude despite the fact that, even though registrars themselves usually do not use trademarks, they facilitate such use to third parties.

Nevertheless, the court of first instance where this case was later retried, the Kyiv City Commercial Court, ordered the registrar to stop the infringement and to cancel the domain name registration in its ruling of December 8, 2016. The court argued that the defendants did not prove they had obtained a permission to use the trademark and that they had therefore infringed the rights of the trademark owner. Furthermore, the court stated that remedies such as prohibiting the registrar from maintaining illegal domain name registrations in the name of third parties and ordering the registrar to cancel the domain name registration were fair and effective remedies which must be pursued. This ruling has not yet been appealed.

Deciding on Remedies

Ukrainian Trademark Law mandates that an infringement must be stopped upon the request of a trademark owner.

In the resolution of May 21, 2012, case No. 6- 20 цс 11, the Supreme Court of Ukraine caused a minor revolution by its interpretation of legal provisions dealing with remedies. They did this namely by stating that the list of relevant remedies is not completely defined and is not limited, but that any potential remedy should be in congruence with the content of the infringed right, the nature of the infringement and its consequences.

Moreover, in reaction to the remedies mentioned in Article 6 of the WIPO Joint Recommendation Concerning Provisions on the Protection of Well-Known Marks, trademark owners in Ukraine began requesting that registrants and registrars of conflicting domain names cancel their registrations or transfer the domain names to trademark owners. This also gave rise to the following interpretation, which is widely applied by courts and exemplified in the Judgment of the Kyiv City Court of Appeals of March 16, 2016, case No. 753/10219/15-ц:

Since Ukrainian legislation does not specify what remedy should be employed in case of domain name infringement, the panel of judges finds it necessary to apply the principle of the most fair and effective method of protection, namely the transfer of the domain name to the plaintiff in order to eliminate the possibility of reassignment of the name to the former registrant by any authorized registrar.

Counting on the EU Association Agreement to Modernize Legislation

While Ukrainian case law lacks detailed provisions tailored to domain name disputes, by signing the Association Agreement with the European Union and its Member States, Ukraine agreed to implement the measures, procedures and remedies specified by the Agreement and necessary for ensuring the enforcement of intellectual property rights. This included ensuring that IP rights holders are in a position to apply for an injunction against intermediaries whose services are used by a third party to infringe an intellectual property right.

For instance, the Association Agreement contains a section entitled “Enforcement of Intellectual Property Rights”, which is harmonized with the provisions of Directive 2004/48/EC on the Enforcement of Intellectual Property Rights” and Directive 2000/31/EC on Electronic Commerce regarding civil measures, procedures and remedies and the liability of intermediary service providers.

Hopefully, in the next few years, due to the implementation of the Association Agreement, Ukrainian legislation on domain dispute resolution will become modernized and more balanced, making it easier for IP rights holders to protect their intellectual property.

Article by Yuriy Karlash, Associate at PETOŠEVIĆ Ukraine