A client approached me last week inquiring about a potential lawsuit against a Chinese company in relation to its trademark and domain name. It was not the first time such an issue was asked of me.
The client is an international manufacturer of a certain machine, enjoying a good reputation over the globe. Recently, they found that its trademark was registered as domain name by its Chinese distributor under the top level domain of “CN” for a number of years. The client wanted to take the domain name back. Then, I asked them when they registered that trademark in China, and I was told they registered their trademark in China two years after their supplier registered the trademark as a domain name. Also, the client had come to know that website has been in operation for years advertising the client’s products.
Given those facts, I have to honestly point out to my client that there is virtually no chance of winning the case. The reason lies in the judicial interpretation issued by Supreme Court in 2001, namely, Interpretation of Several Issues regarding Application of Law in Trying Civil Cases Involving Internet Domain Names (the “Interpretation”). Article 4 of the Interpretation provides that, where the following conditions are met, the registration, use of domain names by defendant shall constitute tort or unfair competition:
1. The civil rights and interests requiring protection in the proceeding are legal and valid;
2. The defendant’s domain name or the main part thereof is the replication, imitation, translation or transliteration of plaintiff’s well-known trademark, or is the same as or similar with the registered trademark, domain name of the plaintiff, capable of causing confusion among relevant public;
3. The defendant neither has rights and interests in the domain name or the main part thereof, or has any justifiable reason for registering, using the domain name; and
4. The defendant is malicious in registering, using the domain name.
The roadblock for a successful suit is that it is will be difficult for the client to prove the malice of the defendant since, as I found after checking the two websites, the distributor did have a good reason for registering and using the domain name for purpose of promoting the client’s products in China. On the other hand, client’s trademark is registered after the registration and use of the domain name by the defendant, which means client has no ground to allege infringement of its proprietary rights in the trademark by the defendant.
The lesson international companies may draw from the case is that you should register your trademark in China as early as possible before your trademark goes global and register domain names using trademark and tradename in those important international markets.