Hungary: A registrar found guilty of trademark infringement

This is quite unusual: The Supreme Court of Hungary recently ruled that a registrar which is also an internet service provider had infringed the rights of the owner of the szivárvány trademark by using the szivarvany.hu domain name.
The plaintiff argued that its trademark had become well known as a result of its commercial activities over the decades, and that the use of the word szivárvány in the domain name would create an association with it in the minds of customers, leading them to expect its customary reliability, commercial policy and trustworthiness.
Remarkably, it also argued that argued that the registrar, which is also a professional ISP, was obliged to refuse an application for a domain name that was identical or confusingly similar to a registered trademark, particularly in light of guidance issued by the Scientific Association of Hungarian Internet Service Providers Council on the relationship between trademark protection and requests for domain name registrations.
The registrar replied that it acted merely as an agent in the legal relationship and as such committed no violation of law. It claimed to have performed its duties under the Domain Registration Rules.
In the Supreme Court's view, the registrar committed trademark infringement, since its behaviour could be regarded as trademark use even if its responsibility was to carry out the administrative and technical tasks of the domain name registration. The Supreme Court examined in detail the provisions of the Domain Registration Rules of the Council of Internet Providers on the role of a registrar. According to the interpretative provisions of the Domain Registration Rules, a registrar is an entity chosen by the domain name applicant and is responsible for handling the applicant's affairs in connection with domain name delegation and/or registration. Under the Domain Registration Rules, a registrar must examine whether the domain name application may be carried out. Should the choice and/or use of the relevant domain name conflict with the Domain Registration Rules, the application must be withdrawn.

[Source : G. Faludi & Gusztav Bacher, Szecskay - Attorneys at Law, International Law Office, March 14, 2005]