Gorodissky & Partners: Domain Name Management in the ‘.RU’ and ‘.PФ’ Zones

by Vladimir Biriulin,
Partner, Gorodissky & Partners

 

With the ‘.рф’ domain extension approved, it is important that trademark owners plan registrations now, or they risk costly enforcement actions later

Although not strictly IP subject matter, domain names are acquiring increasing importance worldwide. The Internet plays an increasingly prominent role in all business activity, whether carried out by corporations or individuals, and every move in the virtual world begins with a domain name. The scope of domain names is wider than that of trademarks; without diminishing the role of trademarks, it is domain names that open a door to a new world in which trademarks occupy only a small niche.

Tackling cybersquatters

Domain names not only label the products sold on the Internet and elsewhere, but also advertise activities and provide information on subject matter, businesses, corporations and people. They have made communication easier and have speeded up contact between people. However, it is not all good news. Law is always considered after the fact and the area of domain names is no exception; the lack of adequate regulation resulted in loopholes through which cybersquatters marched in large numbers (worldwide, not just in Russia). Such cybersquatters registered all the words they could imagine.

The first victims were popular trademarks. One cybersquatter registered thousands of Russian names, beginning with the names of the president, the prime minister and other well-known media figures. In the early years registration was practically free of charge and cybersquatters could afford registration en masse. For some, the registration of other people’s trademarks and other designations became a lucrative business. Many trademark owners found that their trademarks had been registered as domain names by other people. Often these trademark owners preferred to buy the relevant domain name from the cybersquatter, rather than to engage in costly court proceedings, although litigation did take place occasionally. As Russia does not adhere to the Uniform Dispute Resolution Policy, conflicts involving ‘.ru’ domain names may be resolved only in court.

It is difficult to obtain exact numbers for court cases versus paid transfers of domain names, but from practice it can be roughly estimated that they are evenly split.

Although Russia joined the online race later than some countries, it quickly caught up. At first, domain name disputes were difficult to solve. Ten years ago there was the landmark KODAK case, which lasted for many months.

At that time domain names were a novelty and the courts deliberated for a long time over how to deal with such an unknown quantity. Soon afterwards, the examination of conflicts involving domain names became routine and domain name management became an industry in itself.

The judiciary worked out standard approaches to the handling of domain name conflicts. As a rule, it is relatively easy for the courts to order a cybersquatter to hand over a domain name if that domain name reproduces a trademark and the relevant website advertises the same goods that are covered by the trademark.

It is more difficult for the courts to deal with an empty website that uses the domain name at issue, or one which advertises different goods from those covered by the trademark. Nevertheless, even this situation is not hopeless and there have been court judgments in such cases issued in favour of trademark owners and against cybersquatters. This is also true in seemingly hopeless cases. Thus, Avtovaz, the biggest car manufacturer in Russia (manufacturing 600,000 cars annually), was able to win rights to the domain name ‘avtovas.ru’ even though the cybersquatter registered the domain name before Avtovaz registered its AVTOVAZ trademark. Despite the fact that Russian law provides for the seniority of rights, the appeal court awarded the domain name to Avtovaz on the grounds that the cybersquatter advertised the same goods under that name as were sold by the car manufacturer.

Before initiating court proceedings, injunctive measures are usually issued against the cybersquatter so that during the court proceedings it cannot dispose of the domain name, which would render enforcement of the court judgment impossible.

New ‘.рф’ domain name

In a major development, this year Russia is introducing a national Cyrillic domain name: ‘.рф’. In January 2010 the Internet Corporation for Assigned Names and Numbers (ICANN) approved the symbols ‘рф’ as an official designation of the Cyrillic domain. There are obvious advantages in having a Cyrillic zone. There are already more than 2 million domain names with the ‘.ru’ extension and it is becoming increasingly difficult to register new names. Cyrillic domain names will solve that problem for years to come.

For most Russians it is not common to speak or write English, so using their native language to name sites and search for information is more familiar. This is particularly true because as the Internet penetrates deeper into society, the internet community is joined not only by computer educated people, but also by people whose field of activity lies far from information technology, including older people.

The ‘.рф’ zone will not compete with the ‘.ru’ zone; rather, both will coexist, although ‘.ru’ may become less popular. In order to avoid abuse as far as possible, the Russian domain name registrar introduced rules for the multistage registration of Cyrillic names. The first stage is the priority reservation of domain names, which began in November 2009 and is due to finish in April 2010, although at the time of writing there are unconfirmed reports that this term may be extended.

Priority reservation means that only state organizations and trademark owners can reserve domain names using the ‘.рф’ extension. This rule was designed to handicap potential cybersquatters and to allow trademark owners sufficient time to protect their rights to corresponding domain names. By January 2010 around 7,000 domain names had been reserved. Of these, 93% are trademarks and 7% are names reserved for government bodies. In addition, at the request of the presidential administration and the Ministry of Communications, it will be forbidden to register a domain name that uses the names of any leading Russian politician. This rule is intended not only to prevent registration of such domain names by cybersquatters, but also to preclude the posting of provocative information on the Internet.

For example, recently a website was created under the domain name ‘kadyrov2012.com’. Ramzan Kadyrov is the president of the Russian Caucasian Chechnya Republic who stabilized the situation in the south of Russia. The site carried information to the effect that Kadyrov wanted to run for president of Russia in the next elections; Kadyrov later disavowed that information.

The disadvantage of the ‘.рф’ extension is that it will be used mainly by the Russian people. Most people in other countries are unfamiliar with the Russian language, so their capability to search may be limited unless a technological innovation is introduced to solve this problem.

As for trademark owners, a registration in Cyrillic will give them additional marketing opportunities and protect them against cybersquatting.

From April 20, 2010 (or a later date if the priority reservation period is extended) there will be open registration of Cyrillic domain names, with a gradual downscaling of the registration cost. Registration in the first week will start at approximately $300,000; in the second week it will be reduced by 50% to cost $150,000; and so on, with the bid being reduced by 50% each week until July 2010, when registration of a Cyrillic domain name will cost the standard price of approximately $25. Where two parties own the same trademark for different classes of goods, the corresponding domain name will be registered on a first come, first served basis

Final thoughts

Serious preparation for the ‘.рф’ domain extension is underway and the registrar has put in place a major defence system against cybersquatters. Nevertheless, considering previous experience, it may reasonably be expected that many trademark owners or company name owners will miss the opportunity to obtain the Cyrillic registration of the relevant domain name in the ‘.рф’ zone; instead, cybersquatters will seize this chance and a new niche will open up for lawyers to earn money protecting the rights of oblivious trademark owners.