Why is the court practice concerning disputes between domains and trademarks in Bulgaria illegal?
1. Introduction :
I would like to start this presentation by noting the objective fact of reality that the largest company in the world (as I now), whose business is multi-billion - "AMAZON", is based online. Its shares are traded on the stock exchange in New York, London and Hong Kong. Behind the website AMAZON.com is the corporation "Amazon.com" Inc. This company also owns the American national, international (registered under the Madrid Agreement and its protocol) and European trademarks AMAZON.com . The trademark in question is definitely a domain! Its shares, according to my information (I admit it is incomplete), are not traded on the Sofia(Bulgarian) stock exchange, nor are cases related to it heard in the Sofia courts, but it is still the most expensive trademark in the world representing a domain. I share these facts because of the particularly controversial view of the Bulgarian court of the 21st century (object of research in this article) that "the domain cannot and is not a trademark" and that "the bad faith registration of a domain is not a commercial activity". Sounds absurd to you? For me as well.
On the subject, I would like to share that in my more than 20 years of practice as a lawyer, I have come to realize that if a case does not involve bankruptcy or involve very serious murder, real estate or contracts, it "does not present legal and factual complexity" to the Bulgarian court. Alas, the "motives" of many decisions concerning high technologies refute this view of his and point to a total misunderstanding on the subject of many Bulgarian magistrates. Interesting from this point of view is the practical question of how Bulgaria is expected to attract the investments of high-tech companies that rarely go bankrupt in order to criminally neglect their obligations to their creditors (so-called "criminal bankruptcy" - unknown to Bulgarian law), but for yet have multi-million dollar businesses based online? How to protect these businesses after Bulgaria did not implement the IPRED Directive [1] in the fact that it was obliged to do so by April 2009 at the latest, and ex post facto the same happened with the Digital Single Market Copyright Directive of 2019 . [2] Apparently, this is unimportant in Bulgaria, but not in the USA [3] , as the differences in economic and civil turnover, obviously in the development of the legal framework and law enforcement, show who is on the right track and who is not!
In fact, in the high-tech 21st century, contracts have become "smart contracts" and they are implemented in the software of financial instruments at a low level in the code, capitals are raised through online financial campaigns called ICOs - "Initial coin offering") - a kind of online issuance of shares, not to mention software patents and artificial intelligence, which the Bulgarian judges as a law and legal framework did not even touch, but let's go back to something more trivial: obviously behind the most - the big companies in the world have trademarks that represent domains . All these processes remain unnoticed for the "expertise" of some of the top Bulgarian magistrates, who not only do not know the international, but also the national normative framework related to intellectual property online in detail, but continue to "enrich" the judicial practice with decisions according to which , "the domain cannot and cannot be a trademark" [4] and "the registration and maintenance of a domain similar or identical to a registered trademark is not a commercial activity". [5]
This exposition is aimed at doctrinal clarification of the fact assumed by every lawyer dealing with intellectual property, namely that domains are the subject of a trademark [6] , that the purchase and use of a domain is a commercial activity , and that all this has its legal, financial and law enforcement effects in business and legal relations between different legal entities – respectively, those who registered domains in bad faith and others with earlier industrial property rights on them [7] .
The established WIPO (World Intellectual Property Organization) Institutional Court of Arbitration for the Arbitration of Disputes between Trademarks and Domains has long offered a domain name dispute resolution service for first-level country code domains (from the English "Domain Name Dispute Resolution Service for Country Code Top Level Domains' or ' ccTLD '). Since the launch of WIPO's ccTLD service program in 2000, the World Intellectual Property Organization has provided advice to many countries on what constitutes a "ccTLD", with the aim of establishing registration conditions and dispute resolution procedures that are consistent with international standards for the protection of intellectual property , while taking into account the specific circumstances and needs of individual legal entities.
Naturally, as you may have guessed, Bulgaria does not participate in the list of countries recognizing this international arbitration procedure, among which are France, China, the European Union, Spain, Switzerland, Australia, Canada, and even Ukraine, Panama, Peru, Romania, Mexico, etc. - a total of 78 countries [8] . I say all this against the background of the still existing illegal "arbitration" of the company "Register.bg" EOOD, which continues to " render decisions " in the arbitration of disputes between trademarks and domains, after the numerous rulings of the Supreme Court, which say that this it is neither institutional nor ad hoc arbitration . One of them advocates the view that the arbitration commission at "Register.bg" EOOD does not have the status of an independent private entity within the meaning of Art. 1 and Art. 4 ZMTA, since it is only an auxiliary body of a company. With the acts issued by it, the Registry is offered the adoption of a decision on a specific dispute, and the disputes themselves are not resolved, and with the force of a res judicata inherent in arbitration decisions, therefore they are not subject to annulment in accordance with Art. 47 ZMTA [9 ] .
Having hopefully established from the introduction that domains can and are subject to trademark registration and that claiming and maintaining a domain in bad faith is conduct that infringes an earlier registered trademark, a few de lege recommendations should be made ferenda to the Bulgarian law enforcement, and I hope to the Bulgarian legislator in the near future.
2. Substantive legal framework regarding collisions between registered trademarks and domains, giving an answer to the question whether domains are subject to trademark protection at all?
The answer to this question is positive, as we find it implemented in the already mentioned ruling No. 754/02.11.2010 of the Supreme Court of Appeal under ch.tr. case No. 410/210, in which the supreme judges found that the enforcement of disputes between trademarks and domains should be carried out by the national courts under Regulation No. 874/2004 or by arbitration courts , with the hint that this could be WIPO Arbitration. Obviously, the analogue of the "Law on Intellectual Property in the Digital Millennium" in Bulgaria will be a regulatory mirage for a long time, but this does not mean that there is no EU regulatory framework that is part of Bulgarian law, replacing the detailed legislative neglect of the problem.
From this point of view, I should note that Regulation No. 874/2004 is an EU act that creates the legal framework for defining public policy rules for the implementation of the functions of the ".eu" top-level domain. By analogy, it also defines the principles that the courts should be guided by regarding the registration of the national first-level domain ".bg" and its collision with already existing, earlier trademarks - registered or unregistered ones. The Community normative act in question, which has a direct enforcement effect in Bulgarian law , advocates the following view in its Article 10, entitled "Eligible parties and names that can register":
Paragraph 1: Holders of prior rights , recognized or established by national and/or Community legislation, and public authorities have the right to submit applications for the registration of domain names during a phased registration period before the start of the general domain registration .eu. "Prior rights" means, inter alia, registered national and Community trade marks , geographical indications or designations of origin and, in so far as they are protected by national law in the Member State in which they are held, unregistered trade marks [10] , names, business identifiers, company names, surnames and distinctive titles of protected literary and artistic works [11] .
Para.2: Registration based on a prior right consists in registering the full name for which the prior right exists, as recorded in the documentation that proves that such a right exists.
How is the name of the desired domain for registration formed and must it be identical or similar to the brand and registered for similar goods and services . In the case of Madonna v. Madonna.com, the singer Madonna proves that she owns and sings for life under the registered trademark MADONNA, which she uses in her commercial activity as an artist , and that she, in that capacity, wishes to acquire the domain that carries out her name as a singer www.madonna.com. At this time (year 2000), the domain in question is owned by a producer of porn films (Dan Parisi) and its content is entirely pornographic. Despite her scandalous image, Madonna is not a porn actress and has nothing to do with such type of films, but instead she published a book called "SEX". She won case no. D2000-0847 of the WIPO Court of Arbitration on the basis of its previously registered trademark MADONNA and is today the owner of the domain Madonna.com, as the WIPO Court of Arbitration holds as follows:
According to paragraph 4(b)(iv) of the UDRP [12] evidence of bad faith registration and use of a domain name in relation to a previously registered trademark are the following circumstances:
(iv) by using the domain name, its owner, Dan Parisi, willfully attempted to commercially attract Internet users to its website or other online location by creating a likelihood of confusion with the plaintiff's Madonna mark as to the source, sponsorship , the affiliation or endorsement of the website or venue, or of a website product or service as a venue.
The procedural documents in case no. D2000-0847 of the WIPO Tribunal of Arbitration are consistent with Defendant Dan Parisi purchasing the domain madonna.com for the specific purpose of trading on the name and reputation of Plaintiff Madonna , and Defendant has offered no alternative explanation for the purchase of the name , despite the otherwise detailed and complete documents he submitted [13] . Defendant Dan Parisi has not explained why the domain madonna.com was worth USD 20,000 (which is how much the domain was offered as a sale price) or why the name was considered valuable as attractive for a website with sexual content. Defendant Parisi notes that Plaintiff, posing as Madonna, appeared in Penthouse magazine and published a book called "SEX." The claim that "madonna" is just a word in the English language that doesn't correspond in any way to the domain is not a particularly witty defense, because a similar argument can be made with respect to the word "coke" (this is an argument from the decision) . On the contrary. The WIPO arbitral tribunal held that defendant Dan Parisi did not even attempt to link his website to any dictionary definition of "madonna". "The only plausible explanation for the domain owner's actions is a deliberate effort to trade on the reputation of the plaintiff's (Madonna) name and brand for commercial gain." This purpose violates both the UDRP and the US Trademark Act."
In this context, it should be noted that in fact the word element of the previously registered trademark does not necessarily have to be identical, but similar to the registered domain - the MADONNA trademark is highly similar (leading to identity), but not identical on the Madonna.com domain. The same legislative view can be found in Article 11 of Regulation No. 874/2004, entitled "Special Symbols", which provides:
-"For the registration of full names composed of several words or textual elements or of words separated from each other by a space, the domain name formed by joining the parts of the full name with a hyphen or by merging them shall be considered as a full name . When the name for which prior rights are claimed includes special characters, spaces or punctuation, these characters are completely eliminated from the corresponding domain name, replaced by dashes or commas where possible, rewritten with normal characters.
Special characters and punctuation marks as specified in [second paragraph] include the following: ~ @ # $ % ^ & * ( ) + = <> { } [ ] \ /: ; ' , . ?
For all else, the domain name is deemed to be identical to the textual or word elements of the copyrighted name ."
An important question is what happens to the precautionary measures against the domain during the trial, i.e. with the option that the defendant does not dispose of it and the claim defense becomes meaningless. In this line of thought, Art. 19, paragraph 2 of Regulation No. 874/2004 establishes the rule that if the owner of the domain is an enterprise, natural or legal person or organization declared bankrupt, liquidated, suspended, liquidated by a court decision or another procedure of a similar nature, provided for in national legislation, during the period of registration of the domain name, the judicially approved administrator (in this case - the holder of the earlier trademark) may request its transfer to the one to whom the assets of the holder of the domain name are transferred, together with the provision of the relevant documents . If no transfer has started by the end of the registration period, the domain name is suspended for forty calendar days and published on the Registry's website. During this period, the administrator (the claimant, the owner of the earlier trademark) can apply to register the name by attaching the relevant documents. If the administrator has not registered the name during the 40-day period, after its expiration the domain name remains available for general registration.
From everything that has been said, a few justified substantive legal conclusions should be drawn:
- the first of them is that obviously the domain is a sign and it can be the object of protection for any holder of earlier industrial property rights , including brands, company names and any other kind of business identifiers, including copyrights;
- the second conclusion concerns the fact that each domain should be interpreted as claimed in bad faith when an identical or similar earlier trademark exists for it. Upon establishing this fact, together with the decision on the scheduling of the case and the announcement of the report, the court should order (if this is expressly requested by the plaintiff and the claim is possibly justified) the admission of a precautionary measure [14] , which corresponds to the mechanism of Art. 19, para. 2 of Regulation No. 874/2004, namely the option that the domain not be alienated during the dispute to third parties, as well as that it be transferred in relation to the owner of the earlier trademark at the end of the legal process ;
- the third conclusion is that Community law has created a clear and precise mechanism on the topic of collision between trademarks and domains, and although it is not explicitly implemented in Bulgarian law as a separate legislative act or specific norms in the special ZMGO, this does not mean, that Regulation No. 874/2004 has no direct enforcement effect.
3. What is the legal framework for law enforcement regarding fraudulently claimed domains and why does this behavior also constitute fraudulent commercial activity?
In the absence of a national legal framework on the subject, I am asked to consider Case C‑569/08 of the Court of Justice of the EU, concerning a preliminary inquiry made by the Oberster Gerichtshof (Austria) on the basis of Article 234 EC, by which the referring court referred the Court of Justice of the EU with five questions on the interpretation of Article 21 of Regulation (EC) No 874/2004.
These matters arose in the context of an intellectual property legal dispute initiated between the company Internetportal und Marketing GmbH, an operator of websites and trading of products on the Internet (which is the "claimant"), on the one hand, and Mr. Richard Schlicht, proprietor of the Benelux brand 'Reifen', which he intends to use for new cleaning preparations, in particular for glass (which is the 'defendant'), on the other hand, the subject of which is the identical domain name.
Essentially, the questions refer to the criteria for establishing the existence of a "right", a "legitimate interest" and "bad faith" when claiming the domain in question within the meaning of Art. 21 of Regulation No. 874/2004.
According to the interpretation given by the Advocate General, Domain Name Disputes are resolved according to the rules provided for in Chapter VI of Regulation No. 874/2004, respecting the rules of Article 21 ("[Speculation and abuse in registrations]"). The legal norm in question reads:
A registered domain name is revoked in the context of the relevant out-of-court or judicial proceedings when that name is identical or confusingly similar to a name in respect of which a right is recognized or established by national law and/or by Community law, such as the rights specified in Article 10(1) and if:
a) was registered without its holder having a right or legal interest in the name , or
b) was registered or used in bad faith .
The domain registrant has a legitimate interest within the meaning of Regulation No. 874/2004 in three scenarios:
-when prior to any notice of out-of-court dispute resolution proceedings, the holder (registrant) of the domain name has used that name or a name corresponding to the domain name in the course of offering goods or services, or it can be proven, that he had prepared for it;
- when the owner (registrant) of a domain name, in his capacity as an enterprise, organization or individual, was known under that domain name even in the absence of rights recognized or established by national law and/or Community law;
- when the owner (registrant) of a domain name carries out a legitimate non-commercial or proper use of a domain name, without the intention of misleading users or harming the reputation of a name to which a right is recognized or established by national legislation [and]/or by Community legislation.
The Bulgarian jurisprudence cited at the beginning of this presentation is in total contradiction with the concept of "bad faith" in domain registration within the meaning of Article 21, paragraph 1, letter b) of Regulation No. 874/2004, which indicates a lack of compliance with the normative framework, part of the Bulgarian legislation based on the EU acts implemented in it with direct effect . According to the legal norm in question, a domain registered in bad faith is present when:
a) the circumstances indicate that the domain name was registered or acquired primarily for the purpose of selling, renting or otherwise transferring the domain name to the holder] of a name to which a right is recognized or established by national law and/or legislation the Community or a public organization; or
b) the domain name has been registered to prevent the holder of such a name, to which a right is recognized or established by national and/or Community law, or of a public organisation, from reflecting that name in the relevant domain name , provided that:
- this behavior on the part of the applicant for registration can be proven; or
- the domain name has not been used in a relevant manner for at least two years after the date of registration; or
- at the time when proceedings for out-of-court dispute resolution are initiated, the holder of a domain name to which a right is recognized or established by national law and/or Community law, or the holder of a domain name by a public organization has declared the intention to use the domain name in the relevant manner, but has failed to do so within six months from the day on which the out-of-court resolution proceedings were commenced;
c) the domain name is registered primarily to prevent the professional actions of a competitor; or
d) the domain name has been purposefully used to attract Internet users for commercial gain to the domain name holder's website or to another of its online spaces, creating a likelihood of confusion with the name to which a right is recognized or established by national law and/or by Community law, or by the name of a public organisation, where such likelihood of confusion relates to the source, sponsorship, affiliation or endorsement of the website or other online space, or of a good or service offered on the internet the site or in the other online space of the owner; or
e) the registered domain name is a proprietary name for which it cannot be shown that a relationship exists between the owner of the domain name and the registered domain name.
I hope that the proposed exposition has answered in detail all the substantive legal questions that have arisen regarding whether domains can be the subject of trademarks, how disputes between trademarks and domains should be resolved by the national Bulgarian court and what are the criteria and grounds for this, as and whether claiming a domain is a commercial activity and whether it can appear in bad faith in many different scenarios. I sincerely believe that the answers of the Advocate General regarding the preliminary inquiry sent to the Court of Justice of the EU regarding Case C‑569/08 will not be ignored once again in Bulgarian law enforcement, but on the contrary - will serve for the correct and objective development of judicial practice, as and for the necessary changes to the special ZMTO concerning trademark and domain disputes.
Author: lawyer Atanas Kostov
[1] I am referring to Directive 2004/48/EC of the European Parliament and of the Council of April 29, 2004 on the enforcement of intellectual property rights, or the so-called "IPRED Directive" (from the English "(IPR) Enforcement Directive");
[2] See Kostov, A. - "Directive on copyright in the digital single market" - problems and good solutions", magazine "Property and Law", 2019, vol.9, p.70;
[3] The Digital Millennium Copyright Act has been in effect in the United States since 1998.
[4] Thus, Decision 345/04.04.2022 under Trade No. 936/21 according to the inventory of the SGS, VI-9 composition.
[5] According to Decision No. 53/06.04.2009 in case No. 605/2008 of the Supreme Court, TC, II so-called "a domain, by its very nature, is an Internet address containing certain information about Internet users. Therefore, the registration by the registrar/in the case of "P" LLC/ of a domain with a certain name identical or similar to an already registered trademark does not constitute a commercial activity, respectively illegal use of a trademark within the meaning of Art. 13, Para. 2 of the ZMGO in vr With Article 13, Paragraph 1, Item 2 of the ZMGO;
[6] See Kostov, A. - "Protection of domain names and other business identifiers in the network", magazine "Property and law", 2011, volume 7;
[7] The world practice of arbitration of disputes between trademarks and domains indicates that, with a view to resolving such cases, an international Court of Arbitration was established at WIPO (World Intellectual Property Organization) in Geneva, Switzerland. The arbitration institution in question has been in existence since 2000. It deals with disputes between registered earlier trademarks and fraudulently acquired top-level domains - for example, domains with the extension ".som". One of the iconic cases on the subject is MADONNA v. madonna.com / Case No. D2000-0847;
[8] Regarding the comprehensive list of countries arbitrating their national top-level domains through the WIPO ccTLD procedure - https://www.wipo.int/amc/en/domains/cctld/.
[9] Decision No. 754/02.11.2010 of the Supreme Court of Appeals in Case No. 410/210.
[10] Unregistered brands as the subject of prior conflicting rights (in the case of a domain) exist in Bulgarian law in Article 12, Paragraph 4 of the ZMGO.
[11] It is a curious fact that all these objects are also indicated as a reason for the deletion of a trademark in Art. 36, para. 3 of the ZMGO, which confirms the view that the domain can and is the object of a trademark, which can to be deleted on the basis of earlier rights - for example, earlier right to a company name, copyright, etc.
[12] See WIPO's Uniform Domain Dispute Resolution Rules ( UDRP );
[13] This is in contrast to the reasoning of the Supreme Court that "buying a domain is not a commercial activity".
[14] Thus, Art. 25 of the ZMGO in connection with Art. 124 of the ZMGO - the plaintiff can ask for a precautionary measure, which is expressed in a prohibition to dispose of the domain , object of the claim, as well as a temporary measure, expressed in a prohibition to engaging in acts that are alleged to constitute or will constitute an unlawful use of a trademark or geographical indication. These protective measures as a final result should also lead to ensuring the transfer of the domain to the plaintiff, if he wins the claim proceedings with the subject of a dispute between a domain and an earlier registered trademark - an argument from Art. 19, Para. 2 of Regulation 874/ 2004.