How to get back your squatted .cn domain name in China

Domains names are pieces of important brand asset. There are thousands of General Top Level Domains ("gTLD") extensions such as .com, .net and Country Code Top Level Domains ("ccTLD").us or .cn. One company will find it not economically sound to register every possible gTLD or ccTLD domain names, which leaves opportunities for some brand squatters to register domains that may contain brand names. Further, domain name adopts a strict “first come first serve” principle when it comes to registration. Therefore, there are occasions where a third party registers a domain name before brand owners even realize.

Fortunately, domain name registers and regulators offer dispute resolution regulations and services to brand owners to get back squatted domain names. China is no exception.

In China, .cn is the China-specific ccTLD that most businesses harness to promote their business or conduct e-commerce. .cn domain names are quite popular among international businesses.

This article surveys the various routes that brand owners can get back their squatted .cn domain names in China.

1. How .cn domain names are managed and regulated

The main domain name regulator is China Network Internet Information Center (“CNNIC”). CNNIC regulates .cn domain names and grants licenses to lots of IT companies to serve as registrars that accept registration filing by entities.

Once it has been filed for registration, the registration process is not complete yet and.cn domain names cannot be used immediately. The domain name must be activated through a real-name verification process to use it on web hosting and email configuration. Depending on domain name registrar’s capabilities in real-name verification, not every individual or legal entities from around the world can successfully register a .cn domain. For example, GoDaddy only accepts applicants from China, Taiwan region, Hong Kong SAR, Macao SAR, US, Canada, and Singapore¹. It is recommended for the applicant to contact registrar before applying and pay the registration fees.

Once a .cn domain name is registered, there will be additional procedures to host websites or web apps in China. This is another major topic that will be addressed in another article.

2. Two major .cn domain name dispute resolution methods

Two major .cn domain name dispute resolution methods are available to resolve any squatted domain names. One is through CNNIC Domain Name Dispute Resolution Process, a process similar to arbitration, and the other is through civil litigation, which are both discussed in details below.

If the domain names have been registered for more than two years, the brand owner can only solve the dispute through civil litigation because the statute of limitation has run for Domain Name Dispute Resolution Process.

3. CNNIC Domain Dispute Resolution Process

Under the CNNIC Domain Dispute Resolution Process Measures (“CNDRP Measures,” effective Sept. 1, 2014), brand owners may bring a petition to cancel a domain name registration or transfer the ownership of such domain name to itself if this domain name is registered within two years.

3.1 Legal authority and administering agencies

CNNIC is the ultimate administering agency of CNDRP. CNNIC delegates the dispute resolution of .cn domain names to the following two organizations:

• Hong Kong International Arbitration Center ("HKIAC")
• Online Dispute Resolution Center ("ODRC") of China International Economic and Trade Arbitration Committee ("CIETAC")

Both organizations need to promulgate rules in accordance with CNDRP Measures and CNDRP Procedural Rules. The decisions by the above organizations have legal effects.

3.2 Procedures at ODRC of CIETAC

Brand owners need to follow the following general procedures to solve domain name disputes.

1. Brand owners ("Complainant") file a complaint with ODRC.
2. ODRC retrieves domain registration information from the registrar and serves a notice of dispute and a certified complaint copy to the .cn domain name holder ("Respondent").
3. Respondent responds to the complaint.
4. ODRC deploys an Expert Panel consisting of one or more arbitrators to review the complaint and response on paper. There is usually no physical hearing.
5. Expert Panel renders a final decision.
6. Registrars will be notified of the final decision which will be immediately enforced, with the domain either being canceled or transferred to Complainer.

The entire procedure takes around 60 days. The respondent may not appeal the decision to other government agencies. During the review period, either party may bring civil litigation at courts. The Expert Panel has the discretion to stay the review. Once a decision is made after substantive review and transmitted to the domain registrar, the registrar will enforce the decision after ten days, i.e. canceling the registration or transferring the ownership of .cn domain name in issue. However, if respondent plead non-infringement at a civil court after the decision is made and before the decision is enforced, the registrar will have to stay the enforcement upon notice by the respondent.

3.3 Substantive review

Most of the time, brand owners bring domain name disputes because they believe the domain name in issue contains their brands which causes conflict with their prior rights.

Brand owners must prove all of the following elements to prevail the dispute according to Article 8 of CNDRP Measures:

• The disputed domain name is identical with or confusingly similar to the name or mark in which the complainant has civil rights and interests;
• The holder of the disputed domain name has no lawful rights or interests in respect of the domain name or the major part thereof; and
• The holder of the disputed domain name has registered or has used the domain name with malicious intent.

Malicious intent can be proved through either of the following demonstrations according to Article 9 of CNDRP Measures.

• The holder of the disputed domain name has registered or acquired the domain name for selling, leasing or otherwise transferring the domain name to the complainant who is the owner of civil rights and interests relating to the domain name or to a competitor of the complainant to obtain unjustifiable benefits.
• The holder of the disputed domain name has, for multiple times, registered the domain names by using the names or marks in which other persons have lawful rights and interests in order to prevent other persons from using the names or marks in which they have lawful rights and interests in the form of domain names on the Internet.
• The holder of the disputed domain name has registered or acquired the domain name for the purpose of damaging the reputation of the complainant, disrupting the normal business of the complainant, creating confusion with the name or mark of the complainant or misleading the general public.
• Other malicious circumstances.

Brands, i.e., name or mark in which the complainant has civil rights and interests, could be in the form of registered trademark, registered trade name, and unregistered well-known trademark. The law does not require trademark or trade name be registered before the domain name is registered. However, if registration of trademark or trade name is before domain name registration, it will increase the possibilities of prevailing in domain name dispute.

4. Civil litigation

While a CNDRP is a quite efficient process to get back .cn domain, the statute of limitation is only two years after such domain is registered. If brand owners find the registration after two years, brand owners may only resort to civil litigation to solve the domain name dispute.

4.1 Legal authority and jurisdiction

Other than Civil Law, Trademark Law, and Anti-unfair Competition Law, the main legal authority to address domain name dispute is Interpretation of the Supreme People’s Court on Application of Laws in the Trial of Civil Disputes Over Domain Names of Computer Network ("the Interpretation", effective July 24, 2001).

According to the Interpretation, the case of a dispute over domain name infringement shall be ruled by the intermediate people’s court of the place where the infringement act is committed or the place of domicile of the defendant. If the place where the infringement act is committed or the place of domicile of the defendant is hard to determine, the place where the computer terminal or other equipment by which the plaintiff found that domain name, is located may be regarded as the place where the infringement act is committed.

Usually, place of domicile of the defendant is difficult to identify because domain registration information reveals very limited information on personal information of domain name holder.

If the domain name is used as URL for a website or web app, it will relatively easy to identify the host of website or web app to determine the location of computer terminal where it can be considered as the place where the infringement act is committed.

The tricky part with the above rule is when the domain name is not associated with any website or web app, meaning that the defendant simply registers the domain name but does not actively use it. In such case, it is not easy to determine the location where the infringement act is committed. Further, there is no such computer terminal for the plaintiff to find the domain name. It is not clear whether the registrar’s location can be used as the location of “equipment by which the plaintiff can find the domain name”.

Therefore, jurisdiction is a very tricky yet important part of litigation preparation. It is recommended to conduct some investigation before determining a court venue to initiate the litigation.

4.2 Civil litigation procedures

Once the court of competent jurisdiction accepts the complaint, the Civil Procedure Law governs the entire litigation process. In regular litigation, the procedures will go as follows:

• The brand owners ("Plaintiff") files at least two certified copies of the complaint, one for the court and the other to the domain name holder ("Defendant").
• The court forwards the certified copy to the Defendant within five days of receipt of the complaint from Plaintiff.
• Within 30 days after filing the complaint, Plaintiff must produce evidence to prove its claims in the complaint and prepare additional copies to serve on Defendant.
• Within 15 days after receipt of the compliant, Defendant may file a response. Within 30 days after receipt of the complaint or an agreed period subject to court’s approval, Defendant must produce evidence to refute Plaintiff’s claims. Defendant may request an extension before the evidence production period ends, the court has discretion as whether to approve such extension.
• Before the evidence production period ends, Defendant may challenge court’s jurisdiction with hopes to buy additional time for evidence collection and production.
• Once evidence from both parties is submitted and exchanged and before the trail hearing, the court may hold one or more hearing to narrow down the issues and review the evidence. This is optional since the court may directly organize a trail hearing the case is not complicated.
• On trial day, both parties will present, oral debate and cross-examine the evidence previously submitted. At this juncture, either party may provide additional evidence. But the submission timing is frowned upon because the other party or court does not have any opportunity to review and pose any questions on evidence.
• After the trial, both parties may need to provide an additional writing argument based on the trial.
• Court of the first instance reviews the complaint, response, evidence and renders a judgment.

The entire process of the first instance can take from six to nine months. If a foreign entity is involved, the process may take additional time at the discretion of the judge. Normally, it should not be longer than 12 months, but there is no penalty if the case is not closed within the time frame.

4.3 Substantive issues

Similar to the CNDRP, When trying cases of dispute over domain name of a computer network, the people’s court shall conclude that the acts of the defendant of registering or using the domain name, etc. constitute infringement or unfair competition if the following conditions are met:

• The civil rights and interests that the plaintiff asked for protection are legal and valid;
• The domain name or the main part of the domain name of the defendant has constituted duplication, imitation, translation or transliteration of the well-known trademark of the plaintiff; or is the same as or similar to the registered trademark of the plaintiff so that the public may take it for the registered trademark of the plaintiff by mistake;
• The defendant doesn’t enjoy rights or interests of the said domain name or its main part, neither does he have proper reasons to register or use that domain name; and
• The defendant is registering or using that domain name through malice.

Concerning malicious intent, the people’s court shall conclude that the defendant is malicious if the acts of the defendant are proved to be under any of the following circumstances:

• registering the well-known trademark of others as a domain name for commercial purposes;
• registering or using the domain name which is the same as or similar to the registered trademark or domain name of the plaintiff for commercial purposes, intentionally causing confusion with the products, services provided by the plaintiff or with the website of the plaintiff, and misleading the network users to visit his website or other online sites;
• having offered to sell or rent that domain name for a high price or to transfer it by other means to get improper profits;
• having not used or having not prepared to use the domain name after registration, and intentionally preventing the right owner from registering that domain name; and
• other circumstances of malice.

If the domain name is a direct copy of registered trademark in China and the domain name is registered after the trademark is registered, it is very likely that the court will decide that the domain name is an infringement of the registered trademark.

4.4 Judgement and appeal

The first instance judgment can be appealed to the Provincial Higher People’s Court within 30 days after Defendant receives the judgment. The second instance process runs very similarly to the first instance except that the decision is not appealable.

5. Conclusion

Overall, CNDRP is relative much faster than civil litigation. But CNDRP’s remedy is limited to cancellation or title transfer, while in civil litigation, the plaintiff may be awarded monetary damages or attorney fee. Clients are advised to plan ahead and do some investigation before instigating any proceeding. Further, it is imperative for brand owners to watch and monitor domain name registrations that contain their brands. Ideally, it is important to register a domain name at the same time of adopting new brands.