Registration of generic domain names: Opinion before the Court of Justice of the European Union

One of the most debated questions at the time of the opening of the .eu TLD was whether or not it was possible to register names on the basis of prior rights on signs which include special characters, such as an ampersand. The Advocate General of the Court of Justice of European Union has just published his opinion (4 years later).

So that he could put his hands on interesting generic names, Internetportal  und Marketing GmbH registered in Sweden about 30 trademarks such as &R&E&I&F&E&N& (reifen means tyre - For the history of the case and screenshots, see this presentation by Thomas Schafft).
By application of the transcription rules, the company was able to register reifen.eu. This registration was challenged before the Czech Arbitration Court* by Richard S., owner of a Benelux trademark REIFEN. The court ordered the domain name be transferred to the defendant (case 910), a decision the loosing party appealed. An Austrian Court referred five questions to the Court of Justice of the European Union.

1. The first question was whether there is a prior right when a trademark has been registered "only for the purpose of being able to register in the first phase of phased registration a domain corresponding to a German language generic term", and when there is such a difference between the registered trademark and the desired domain name (elimination of ampersands).

In a nutshell, Advocate General thinks here that the circumstance that the trademark has been registered in bad faith does not prevent its owner to have a prior right under EC/regulation 874/2004. If Sweden laws, where the trademark was registered, allows the challenge of bad faith registrations, it may open the door to litigation in that country. The formal approach prevails, in the Advocate's opinion: What mattered was the existence of a right at the time the disputed domain name was applied for.

The opinion is the same regarding the second part of the question (gap between the trademark and the actual domain name): given that it was decided that ampersands should be deleted for the registration of the name, there was a right to register the name. The CJEU does not have jurisdiction to decide whether or not it was proper to delete these special characters rather than use their linguistic equivalent ("and"): the Austrian court will have to rule over this.

2 and 3. The second question was whether the EC Regulation gives an exhaustive list of what is a legitimate interest in a domain name (art. 21.2), or only examples. Does a legitimate interest exist if the domain holder intends to use the domain – coinciding with a German language generic term – for a thematic internet portal?

The Advocate says the Regulation only provide ADR panels with guidelines, and that when it lists situations of "legitimate interests", this list is open‑ended and non‑exhaustive. As for the third question, he thinks that "a mere declaration of intention to use the domain name could not be regarded as a preparation for making such an offer of goods or services". If the CJEU follows this opinion (and this is frequently the case), it would be a setback for domainers in the .eu domain. Nevertheless, the Austrian Court will have the final word on whether or not the evidence submitted by Internetportal und Marketing is enough to establish a legitimate interest.

4 and 5. The last two questions related to the meaning of bad faith in EC Regulation 874/2004. As he previously did regarding the legitimate interests, the AG says that the list of situations indicative of bad faith is not exhaustive. To him, "the relevant criteria against which to test the claimant’s conduct for bad faith" are the following:

– the circumstances in which the trade mark was acquired, in particular the intention not to use it on the market for which protection was sought;
– the fact that the trade mark is a German‑language generic name; and
– the possibly abusive use of the & character in order to influence the application of the transcription rules under Article 11 of Regulation No 874/2004

When assessing each of these factors, the Advocate General writes that the "the large‑scale registration of trade marks – 33 of them – in the Swedish register, all by the same process, using the ‘&’ character, may also be evidence of lack of good faith on the part of the domain name holder, in so far as those registrations could, as the case may be, match one of the situations specified in points (a), (b) or (d) of Article 21(3), which describe typical forms of ‘domain‑grabbing’ conduct". The expression "domain-name grabbing" is not used in the Regulation, though. Because the Advocate previously noted that the the existence of a prior trademark right was enough to apply for a name, it is contradictory to see several registrations as evidence of bad faith: Why take into account at this stage the applicant's intent, as it has a right to apply for the name?

What I find is a contradiction may explain why the Advocate General writes in the end of his opinion that "The analysis carried out in this Opinion leads [him] to suggest an approach whereby, even though it is difficult, to [his] mind, to deny that the claimant has a right within the meaning of Article 21(1)(a) of Regulation No 874/2004, a combination of factors might nevertheless demonstrate its bad faith".

* The author is a panelist to the CAC