Case shows difficulties for international companies seeking to recover ‘.fr’ domain names
On November 25 2013 AFNIC (the registry for ‘.fr’ domain names) issued a decision in a case brought by the French subsidiary of Chinese company Joyetech Changzhou Electronics Co Ltd, which specialises in the production and marketing of electronic cigarettes.
The decision, issued under the Syreli procedure, illustrates the potential difficulties international companies may face in attempting recovery of ‘.fr’ domain names further to the modifications to the French domain name legislation in 2011.
Current registration rules for ‘.fr’ domain names, as set out in the AFNIC naming charter adopted in accordance with the provisions of Articles L45 to L45-8 of the French Posts and Electronic Communications Code, provide that only individuals and entities established in a member state of the European Economic Area (EEA), namely the European Union plus Iceland, Liechtenstein, Norway and Switzerland, are eligible to hold a ‘.fr’ domain name. Accordingly, entities established outside of these jurisdictions are no longer entitled to rely on the registration of trademarks protected in France to be eligible for the registration of ‘.fr’ domain names, as was the case until July 1 2011.
In addition, French legislation (Article L45-2 of the code) also provides that ‘.fr’ domain names may be refused registration or renewal, or may be cancelled, if they are "likely to infringe intellectual property or personality rights, unless the registrant demonstrates a legitimate interest and acts in good faith". Article L45-6 further states that anyone with standing may request the cancellation or transfer of a domain name from the registry in such circumstances, with a decision being due within two months of such request.
These provisions led AFNIC to establish the Syreli procedure, pursuant to which AFNIC may order the cancellation or transfer of a domain name which is likely to infringe trademark rights (except if the registrant has a legitimate interest and is acting in good faith). Accordingly, when faced with a request for cancellation or transfer of a ‘.fr’ domain name under the Syreli procedure, AFNIC must consider whether:
- the claimant has legitimate grounds to initiate the claim;
- the domain name is likely to infringe the IP rights of the claimant;
- the registrant of the domain name has a legitimate interest in the domain name; and
- the registrant of the domain name is acting in good faith.
In the case concerning the domain name ‘joyetech.fr’, the claim was brought by Joyetech France SAS, the French subsidiary of Joyetech China.
To support its claim, Joyetech France put forward the existence of four Community trademarks (CTMs) in the term ‘Joyetech’ enjoying protection throughout the European Union, including France. In addition, it underlined the development of the Joyetech group's activities worldwide - the company was apparently founded in China in 2007, had created its French subsidiary in 2013 and its website at ‘joyetech.com’ received an average of 7,000 visitors per day. Furthermore, the domain name ‘joyetech.fr’ was not being used by its registrant (a Mr Hassanne N whose name was not disclosed by AFNIC for privacy and data protection reasons).
The claim was contested by the registrant, who essentially claimed that he was acting in good faith. The registrant claimed never to have heard of Joyetech, either in China or in France, and stated that the results of a search conducted on the French Industrial Property Office's database revealed that a third party had registered a JOYETECH mark in France. The registrant also argued that he had registered the domain name concomitantly and in connection with the creation of an IT company, Techno Bench SARL, as supported by modules and templates for the eventual development of his website, supposedly acquired before the receipt of the complaint (although evidence of this was not supplied).
AFNIC decided to reject the request for transfer of the domain name, although not for the reasons put forward by the registrant. AFNIC did consider that Joyetech France had legitimate grounds to initiate the claim on the basis that the domain name was similar to its company name. However, turning to the question of whether the domain name was likely to infringe Joyetech France's IP rights, AFNIC found that this was not the case.
Firstly, it noted that the CTMs on which the claim was based were registered after the domain name ‘joyetech.fr’ - while the domain name had been registered in August 2010, the trademarks were all registered between December 2011 and March 2012. In addition, AFNIC noted that the CTMs on which Joyetech France was relying were not held by it but by Joyetech China, and that the French company had not provided any concrete evidence of the existence of a legal link between itself and the holder of the marks. Thus, the claim was denied on the basis that Joyetech France had failed to demonstrate that the domain name was likely to infringe its IP rights, given that it had not evidenced any in its own name. In view of this, it was not necessary for AFNIC to consider the second two questions.
It is interesting to consider that Joyetech's claim need not necessarily have failed at the first hurdle for lack of rights. One solution would have been for Joyetech France to provide a copy of its articles of incorporation showing the list of its shareholders, including Joyetech China. Another option may also have been to provide AFNIC with a copy of a licensing agreement between Joyetech France and Joyetech China for the use of the JOYETECH marks in France.
The complaint could also have been filed in the name of Joyetech China, the owner of the trademarks, although, had the claim been successful, AFNIC would not have ordered transfer of the domain name to a Chinese company, given that registrants of ‘.fr’ domain names must now be from the EEA. In such circumstances, it is not clear whether AFNIC would have agreed to transfer the domain name into the name of an eligible European subsidiary company or trustee, and whether it may instead have ordered cancellation. This would of course have led to the risk of the domain name being snapped up by a third party. Thus the change in the eligibility requirements for ‘.fr’ domain names has clearly resulted in a potential problem for brand owners based outside of the EEA wishing to recuperate domain names under ‘.fr’, but who do not have the option of filing a complaint in the name of a European subsidiary.
It is also interesting to note that, in its decision, AFNIC highlighted the fact that the CTMs on which the claim was based were registered after the domain name, even though this fact, of itself, is not determinative of the likelihood of infringement. Under French law, registration of a domain name prior to the registration of a trademark only constitutes a prior right over the mark in question if the domain name has effectively been exploited before the registration of the mark, as ruled by the Paris Tribunal of First Instance in a decision of September 12 2003.
This issue neatly illustrates the difficulties faced by AFNIC when trying to apply the provisions of the French legislation, namely Article L45-2 of the code. On the one hand, the wording is in some ways quite similar to the provisions of the Uniform Domain Name Dispute Resolution Policy (UDRP) which applies to generic top-level domains (eg, ‘.com’) and has also been adopted by the registries of many country-code top-level domains. However, on the other hand, the French wording is subtly different on a number of levels, making it difficult to assess how closely AFNIC's decisions should follow those decided under the UDRP.
In addition, it is unusual for a registry the size of AFNIC to deal with dispute resolution itself, having neither the time nor the resources to deal with the volume of complaints received. Instead, registries often use a third-party provider such as the World Intellectual Property Organisation (WIPO) or the National Arbitration Forum (NAF), or run their own procedure but outsource decisions to a panel of specialist lawyers. Before the modifications to the French domain name legislation in 2011, two procedures were available to trademark owners to potentially recuperate ‘.fr’ domain names: the PARL (run by WIPO) for complex cases and the PREDEC (run by AFNIC) for more obvious cases. As a result of the changes, AFNIC is now in the position of having to decide all cases, which perhaps helps to explain why Joyetech's case fell at the first hurdle, essentially for lack of evidence.
Brand owners would therefore be well advised to formulate their arguments thoroughly and provide watertight evidence if filing cases under the Syreli procedure, and potentially consider using the French court system for anything but the most obvious cybersquatting cases.
David Taylor and Lionel de Souza, Hogan Lovells LLP, Paris
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