Supreme Commercial Court rules in favour of Swiss watchmaker in cybersquatting case

In Tissot AG v Holmrook Limited (Case No 15698/12, December 4 2012; full judgment published in March 2013), the Supreme Commercial Court has considered a dispute between Swiss watchmaker Tissot AG and BVI company Holmrook Limited over the domain name 'tissot.ru'.

Plaintiff Tissot is the owner of the trademark TISSOT, which was registered in 1988 via the Madrid System for the International Registration of Marks for luxury watches and other horological goods (Classes 8 and 14 of the Nice Classification).

In 2009 the plaintiff sought to register a domain name under the Russian top-level domain (TLD), '.ru'. However, the Russian domain name registry, RNIC, informed the plaintiff that the domain name 'tissot.ru' had already been registered by respondent Holmrook in 1999.

The plaintiff filed a claim against the respondent, requesting that the court:

• recognise that the administration of the domain 'tissot.ru' by the respondent constituted a breach of the plaintiff's exclusive rights in the TISSOT mark and an abuse of rights (Article 10bis of the Paris Convention for the Protection of Industrial Property and Article 10(2) of the Civil Code of the Russian Federation);
• prohibit the respondent from using the designation TISSOT in the domain name 'tissot.ru'; and
• order that the respondent pay damages for unlawful use of the TISSOT trademark in the amount of Rb50,000 ($1,700).

The court of first instance dismissed the claim for lack of sufficient and credible evidence that the plaintiff’s rights to the trademark were breached by the respondent through its use the domain name 'tissot.ru'. The court agreed with the respondent that:

• neither the respondent nor any third party “used” the TISSOT mark to designate goods and services in any way – which proved the lack of violation of the plaintiff’s rights in the trademark; and
• the plaintiff did not compete with the respondent, therefore the application of Article 10bis of the Paris Convention and Article 10(2) of the Civil Code of the Russian Federation would be inappropriate.

The plaintiff appealed to the appellate court, which overturned the decision of the court of first instance and granted the claim in full. The cassation court and then the Supreme Commercial Court upheld the decision of the appellate court on the following grounds:

• The court of first instance had erred in not applying Article 10bis of the Paris Convention, which prevents unfair competition.
• The courts referred to Decision No 5560/08 of the Presidium of the Supreme Commercial Court (November 11 2008), which established the criteria for holding a domain name administrator’s actions to be unfair (which could result in the cancellation of the domain name registration):
  • The domain name is identical, or confusingly similar, to the trademark of a third party;
  • The administrator has no legal rights or interests in the domain name; and
  • The domain name has been registered and is being used in bad faith.

In this present case, the domain name 'tissot.ru' was confusingly similar to the TISSOT mark.

The courts pointed out that the development of its activities under the Russian TLD was of obvious commercial interest for the plaintiff. The respondent was not related to the plaintiff's business and had not received the plaintiff’s permission to use the trademark.

The fact that the plaintiff’s trademark was contained in the domain name in its entirety was held to be an obvious and direct obstacle preventing the plaintiff from using its trademark in a '.ru' domain name. Therefore, the courts concluded that the respondent’s actions created barriers which prevented the plaintiff from posting information about itself and its products under its trademark in a '.ru' domain name. This clearly violated the exclusive rights of the plaintiff under Article 1484(2)(5) of the Civil Code, under which trademark holders can exercise their exclusive rights to a trademark - in particular, by placing the trademark on the Internet via the registration of a domain name.

The courts further emphasised that the respondent had knowingly registered a domain name which was similar to the trademark; this amounted to an abuse of rights under Article 10(2) of the Civil Code and Article 10bis of the Paris Convention.

This case shows that courts tend to rule in favour of trademark holders and against shell companies which register domain names containing popular trademarks in order to obtain compensation from the trademark holder for the assignment/sale of the right to the domain name. Despite the fact that Russian lawmakers have so far ignored the issue of cybersquatting, the Supreme Commercial Court continues to protect the interests of international trademark holders. 

Alexey Pashinskiy, Squire Sanders Moscow LLC, Moscow