Domain name owner’s administrative contact person may be liable for infringement
In Basler Haarkosmetik v Basler Hair Cosmetics (Case I ZR 150/09, November 9 2011), the German Federal Supreme Court has held that, in general, a person designated by a foreign domain name proprietor as the administrative contact person at the German domain name registry will not be liable, based only on his/her appointment, for the infringement of third-party rights occurring through domain name registrations. However, the administrative contact person may be liable if he/she has an obligation to verify the domain name registrations due to special circumstances. This can be the case where the administrative contact person uses his/her administrative position for an undefined number of future domain name registrations and knows that the registration of these domain names is made by the applicant on the basis of an automatic selection and registration procedure.
The Federal Supreme Court first recognised that an administrative contact person is not generally liable for infringement. In particular, the court held that the domain name applicant has its own responsibility to verify that the registration and use of the domain name does not infringe third-party rights. The administrative contact person is merely a registered person authorised to accept service for a domain name proprietor established abroad. While the registry’s guidelines confer to the administrative contact person the authority to make decisions in the name of the domain name proprietor, the court concluded that it would be unreasonable to expect the administrative contact person to verify all domain name registrations made by the proprietor.
Nevertheless, the court found that the administrative contact person was liable in the present case, as there were exceptional circumstances leading to a duty to verify the domain name applications, which the contact person had not fulfilled. The domain name proprietor was established in the United Kingdom and traded in registered domain names. Free domain names were identified and registered via an automatic system. Thus, the proprietor did not verify whether third-party rights were being infringed. The administrative contact person, who was aware of the situation, agreed with the proprietor to be registered as administrative contact person for a large and undefined number of future domain name registrations.
While the court confirmed that the business model of ‘domain grabbing’ is not in itself illegal, it found that the administrative contact person had created a risk of registering infringing domain names by consenting to act as administrative contact person for all future domain name applications. Because the administrative contact person was aware of the automatic registration system, he should have verified the applications. As he had failed to do so, the court found that he was liable for damages due to the registration of an obviously infringing domain name.
The decision in the present case confirms previous decisions by lower instance courts, in that administrative contact persons are generally not liable for the registration of infringing domain names. However, the decision recognises a far-reaching liability for administrative contact persons in exceptional circumstances. In practice, circumstances which could lead to such liability can be assessed by the courts based on the following factors:
- The courts must take into consideration whether the administrative contact person intended to, and had a personal interest in, realising profits by being appointed as administrative contact person. The contact person might take on the position only because the domain name proprietor is established abroad and the German domain name registry requires an administrative contact person in the country to facilitate enforcement. In this case, the role of the administrative contact person is in the public interest, and there is no private interest in gaining profit. Consequently, it is less likely that a liability will be found.
- The courts must assess the degree of independence of the administrative contact person vis-à-vis the domain name proprietor. If the proprietor has given the contact person a contractual authority to make independent decisions regarding domain name registrations, it is more likely that the administrative contact person will be found liable.
- The courts must also assess whether the infringement of third-party rights by the registration of a specific domain name was obvious and easily detectable. If the infringement was identifiable only on the basis of an extensive research and an in-depth analysis of the factual and legal parameters, it is unlikely that the administrative contact person will be found liable. However, if the infringement is so obvious that a simple internet research would clarify the situation, the administrative contact person is more likely to be found liable. In the present case, the court based its decision on the assumption that the infringement would have been obvious if the administrative contact person had conducted a basic internet search.
Tiffany Zilliox, Bardehle Pagenberg, Munich
Copyright © Law Business ResearchCompany Number: 03281866 VAT: GB 160 7529 10