Court decision sends strong warning to cybersquatters
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On October 29 2010 the Paris Court of First Instance ruled in favour of France's national railway operator, the Société nationale des chemins de fer français (SNCF), in a case involving the registration of a domain name infringing its trademark SNCF. Given the factual background, there is little doubt that the SNCF could have obtained the transfer of the domain name through the Uniform Domain Name Dispute Resolution Policy (UDRP) but, if so, it would not have obtained any monetary compensation.
The SNCF operates France's national rail services, including the TGV, France's high-speed rail network. It owns a substantial portfolio of trademarks in the term 'SNCF' and 'TGV', as well as many domain name registrations reflecting its SNCF marks, including the domain name 'sncf-usa.com' (registered on October 5 2004).
On December 10 2009 the defendant, a former trainee of RailEurope (a US subsidiary of SNCF), registered two domain names, 'sncfusa.com' and 'eurotgv.org', after the termination of his training contract. According to evidence produced by the SNCF, the domain name 'sncfusa.com' was first used to point to a website relating to high-speed trains in the United States, and then to a website containing links advertising various discounted travel offers.
On January 8 2010 the SNCF sent an email to the defendant asserting its rights with a view to resolving the matter amicably. In response, the defendant stated that he would not transfer the domain names unless the SNCF offered to buy them. On January 18 the defendant terminated its registration of the domain name 'eurotgv.org'.
Given the defendant's refusal to cooperate, the SNCF filed a lawsuit on June 10 2010 asking for the transfer of the domain name 'sncfusa.com', as well as compensation for infringement of its well-known trademark. The SNCF also alleged that the defendant had:
- copied its domain name 'sncf-usa.com';
- breached the confidentiality clause contained in his training contract; and
- engaged in misleading commercial practice.
In support of its claim that the SNCF mark was well known, the SNCF produced the results of an opinion poll which revealed that 100% of 1006 people polled knew of the SNCF mark. The SNCF also submitted that the mark was very old, with first filings in 1937, and that it was recognised nationally and internationally.
In his defence, the defendant alleged that he was not making any commercial use of the SNCF mark and that he had merely registered the domain name 'sncfusa.com' because he was a train enthusiast. In addition, the defendant contended that, in any event, the mere registration of the domain name was insufficient to constitute trademark infringement.
The Paris Court of First Instance accepted the SNCF's contention that the SNCF mark was well known. According to Article L713-5 of the French Intellectual Property Code, the mere registration of a domain name reproducing a well-known trademark could be sufficient to trigger the registrant's liability. Thus, in the present instance, it was immaterial whether the domain name had been used or not. Evidently, the fact that the domain name had been used at some point in time in relation to goods and services similar to those covered by the SNCF trademark registrations did nothing to help the defendant's case.
In addition, the court considered that the defendant was liable in tort for having registered and used the domain name 'sncfusa.com', as it copied the domain name 'sncf-usa.com', in which the SNCF had rights. As a result of this similarity, as well as the content of the associated website, user confusion was likely.
The court did not consider that the defendant was in breach of the confidentiality clause of his training contract, as there was no evidence that the domain name had been registered as a result of the disclosure of confidential information to the defendant by the SNCF.
Finally, the court considered that the defendant's registration and use of the domain name to offer discounted travel deals constituted misleading commercial practice for the purpose of French law, despite the fact that such use was occasional. The domain name and the associated website were such that they could have led a reasonable user to believe that they were owned, endorsed by, or otherwise linked to, the SNCF.
The court thus ruled in favour of the SNCF, ordering the transfer of the domain name and fining the defendant:
- €10,000 for trademark infringement;
- €5,000 for violation of the SNCF's rights in the domain name 'sncf-usa.com'; and
- €5,000 for misleading commercial practice.
Costs of €5,000 were also awarded.
Domain name court disputes are still relatively rare in France, given the availability of other courses of action which tend to be faster and cheaper, such as the UDRP or national equivalents for '.fr' domain names (the PARL and the PREDEC). However, the only two remedies available under the UDRP are either a transfer or a cancellation of the disputed domain name, which, for some brand owners, is insufficient compensation for the damage arising as a result of an act of cybersquatting, as was the case here.
In terms of brand protection strategy, there is little doubt that the prospect of court action is a more powerful deterrent than a UDRP decision. The defendant in the present case is now in the position of having to find €25,000, a significant sum which will certainly make him and others think twice about such behaviour.
This decision is also interesting in that it further contributes to the legal recognition of domain names in France. Since French law has not recognised a specific property right in relation to domain names, the rules regarding trade names are generally applied to domain name matters. As a result, proceedings involving domain names are generally based on the rules of general tortious liability (Article 1382 of the Civil Code). Liability will depend on the fame of the domain name at issue and often on the reputation of the underlying trademark, which was significant in the present instance.
David Taylor and Vincent Denoyelle, Hogan Lovells, Paris
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