What are the legal grounds for domain name disputes in China?

Domain name piracy is as common as trademark squatting in China. The key to striking down domain name piracy is to determine that the domain name is registered in bad faith which either infringes a prior right or constitutes unfair competition behavior. In connection with this, the Chinese court has issued the following opinion.

“When trying a Domain Name Dispute Case, the people’s court should determine that the defendant’s registration and/or use, etc. of a domain name constitutes infringement or unfair competition if each of the following criteria is satisfied:

• the civil rights or interests for which the claimant seeks protection are legitimate and effective;
• the defendant’s domain name or its main part constitutes a copy, imitation, translation, or transliteration of a well-known trademark of the claimant; or it is identical with or similar to a registered trademark, domain name, etc. of the claimant to a degree sufficient to cause mistaken identification among the relevant public;
• the defendant does not enjoy rights to or interests in the domain name or its main part, and has no justification to register and/or use the domain name; and
• the defendant’s registration and/or use of the domain name is in bad faith.”

According to the above guidelines, the court shall determine the defendant acted in bad faith for the following conduct.

• for commercial purposes, registering another’s well-known trademark as a domain name;
• for commercial purposes, registering and/or using a domain name that is the same as or similar to the claimant’s registered trademark, domain name, etc., and deliberately causing confusion with the products and/or services provided by the claimant or with the claimant’s website in order to mislead network users into accessing one’s own website or another online site;
• having offered to sell, lease or otherwise transfer the domain name at a high price and obtained unfair benefits;
• the defendant neither uses nor intends to use the domain name after registration, but intentionally prevents the registration of the domain name by the person holding rights therein; and
• other situations involving bad faith.”

However, if the defendant produces evidence that the domain name it/he owns has gained a certain degree of reputation before the dispute occurs, and is distinct from the claimant’s registered trademark, domain names, etc., then the defendant will be exempted from bad faith.

If the court decides that the registration of the domain name is in bad faith which infringes prior rights or constitutes unfair competition, the court can order the defendant to stop infringement, cancel the domain name, or transfer the domain name to the claimant. Damages can be obtained if actual harm is caused to the claimant.