AFNIC incurs liability for failure to 'freeze' domain name

France
In Francelot v AFNIC (October 6 2009), the Versailles Tribunal of First Instance has ruled against AFNIC, the registry for '.fr' domain names, in a case involving the illegitimate registration of the domain name 'francelot.fr'.
 
In 1989 a company called Francelot, which specializes in the management and building of residential housing, registered the trademark FRANCE LOTS. In 1999 Francelot registered the domain name 'francelot.com' (the court wrongly noted that the domain name was registered with AFNIC, which would have been impossible at the time).
 
In January 2007 Francelot discovered that a private individual - whose details were hidden in the publicly available WHOIS in accordance with French data protection law requirements - had registered the domain name 'francelot.fr'. The registrant pointed this domain name to a parking website which offered links to competitors of Francelot.
 
In May 2007 Francelot requested that AFNIC disclose the registrant's details and 'freeze' the domain name to prevent any use and/or transfer. These requests were denied by AFNIC. Francelot obtained a summary judgement against AFNIC in June 2007 to force it to disclose this information (AFNIC has since relaxed its rules and will now generally disclose the registration details of private individuals when presented with evidence of a valid prior right).
 
Having obtained the details of the registrant, Francelot decided to bring court action not only against the registrant of the domain name, but also against AFNIC for trademark infringement and unfair competition. Francelot argued that, by failing to freeze the domain name 'francelot.fr' further to its legitimate request in June 2007, AFNIC had forced it to bring court proceedings which had resulted in the registrant cancelling the registration of the domain name in October 2007. The domain name was then recovered, but only after Francelot had incurred significant legal costs.
 
In addition, it was alleged that AFNIC had acted negligently by allowing the registrant of the domain name to pursue its illegal actions. Finally, Francelot insisted that AFNIC and EuroDNS, acting respectively as registry and registrar of the domain name, had the means, both from a technical and legal standpoint (ie, the AFNIC Charter setting out the principles for the registration of '.fr' domain names and the February 2007 government decree on domain names), to freeze the domain name, and should not be entitled to avoid liability based on their status as technical intermediaries.
 
In light of these elements, Francelot requested an award of:
  • €1,000 from the registrant of the domain name for trademark infringement; and
  • €9,000 from AFNIC for unfair competition and loss of goodwill.
After dismissing Francelot's request against the registrant of the domain name for procedural reasons, the court proceeded to analyze AFNIC's actions to decide whether liability should be found.
 
First, the court held that AFNIC could not incur liability for the failure to disclose the registrant's details upon request. The then-applicable AFNIC Charter was clearly in alignment with French data protection legislation and specified the conditions according to which the details of private individuals could be disclosed - either further to a court injunction or after initiation of dispute resolution proceedings.
 
Turning to the question of AFNIC's refusal to freeze the domain name 'francelot.fr', the court found differently. While the arguments relating to the 2007 decree were dismissed as the domain name had been registered prior to its implementation and did not fall under its scope of application, the court decided that AFNIC was liable based on the terms of its charter. The court noted that, according to the provisions of the charter, AFNIC was under an obligation to freeze a domain name if its registration constituted a violation of the terms of the charter.
 
According to the court, the terms of the cease and desist letter sent by Francelot to AFNIC in May 2007 contained sufficient information for AFNIC to proceed with the freezing of the domain name. Therefore, by refusing to act upon receipt of the cease and desist letter, AFNIC had contributed to the unfair competition and loss of goodwill suffered by Francelot. AFNIC was thus ordered to pay compensation of €4,500 to Francelot.
 
AFNIC has announced that it is going to appeal the court's decision - it will be interesting to see whether it is successful. One of AFNIC's main arguments against liability was the fact that the freezing of a domain name in such circumstances should be ordered only by a court of law. This would seem logical, given that cases relating to legal issues such as trademark infringement and unfair competition are often complex. It may thus be inappropriate for AFNIC to deal with the liability of a domain name registrant (and consequent freezing of the domain name). Should AFNIC be obliged to freeze a domain name upon the simple demand of a complainant, this could open up the system to abuse and be to the detriment of innocent domain name registrants. In addition, this is not an obligation that is usually placed on other registries across the globe.
 
David Taylor, Jane Seager and Lionel de Souza, Lovells LLP, Paris

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