September 2016


CYBERSQUATTING OVER .vn DOMAIN NAMES - Does administrative proceeding work?

Nguyen Thi Thu Ha, Vision & Associates (Vietnam)

Cybersquatting, over both gTLDs and ccTLDs, is quite rampant in Vietnam at present. Statistics from the WIPO Arbitration and Mediation left (“left”), one of the five Approved Dispute Resolution Service Providers of ICANN, show increasing numbers of gTLD domain name disputes with respondents from Vietnam. In recent years before the left there have been 21 cases in 2012, 22 in 2013, 43 in 2014, 33 in 2015 and 22 in the first half of 2016. For those disputes relating to the “.vn” ccTLD, unofficial reports from Vietnamese authorities also record tens of cases each year. The figures do not include those cases settled by negotiations between the parties, without recourse to legal proceedings.

The procedure for settling disputes over gTLD domain names is quite clear, complainants can file complaints to one of the Approved Dispute Resolution Service Providers of the ICANN, and the disputes will be settled in accordance with the United Domain Names Dispute Resolution Policy (UDRP). However, for disputes over the “.vn” ccTLD domain names, which are under the laws of Vietnam subject to exclusive jurisdiction of Vietnamese authorities, the administrative procedure does not seem to be not working. Conflict and controversy has arisen with regard to this issue.

The problems may be due to a “glitch” between the two laws governing the registration of “.vn” domain names and enforcement of IP rights, which are the Law on Information Technology 2006 and the Law on Intellectual Property 2005, respectively. Under the laws, registration of “.vn” domain names is stipulated under the Law on Information Technology, and in practice, it is managed by the Ministry of Information and Communication (MOIC). Under Decree 72/2013/ND-CP, which was issued by the Government at proposal of the MOIC, disputes over “.vn” domain names shall be settled through either (i) negotiation, reconciliation between the parties, (ii) arbitration, or (iii) lawsuits before courts. The administrative route for settlement of domain name disputes seems to be ignored under Decree 72.

Nevertheless, under the Law on Intellectual Property, the acts of “registering, holding and using domain names identical with, or confusingly similar to, protected trade names or trademarks of others, or geographical indications without having the right to use, for the purpose of possessing such domain name, benefiting from or prejudicing the reputation of the respective trademarks, or trade names” are considered acts of unfair competition. These are subject to administrative sanctions under Decree 99/2013/ND-CP, which was also issued by the Government but under the proposal of the Ministry of Science and Technology (MOST), the ministry responsible for intellectual property in general and IP enforcement in particular.

These administrative sanctions, which include cancellation of the disputed domain names if all elements of cybersquatting are found, are under competence of a body under the MOST, namely the Inspectorate of the MOST. The administrative proceeding under Decree 99 practically takes less time and cost than the existing avenues provided under Decree 72, of which, in most of cases, the only feasible one is the court route.

However, with the “glitch” between the two mechanisms, problems are encountered. When domain name disputes are brought before the Inspectorate of the MOST, and then held to satisfy all elements of a cybersquatting, the Inspectorate of the MOST may then issue a decision on cancellation of the said disputed domain names. But at that time, the registrar, which is a body under the MOIC, tends to refuse a removal of the domain names in question from the register, pleading that the cancellation is issued through none of the three legal avenues provided for under Decree 72. Things get stuck there, and the administrative proceeding, which was, at its birth, expected to set up a more convenient route for handling cybersquatting, is stifled.

In fact, persistence by the registrar under the MOIC on acceptance of only decisions/judgments issued under one of the three routes stipulated under Decree 72 then makes the MOST decline to issue any decisions on domain name disputes to avoid a risk that their sanctions may never have any real purpose. In 2015, almost all domain name disputes brought before the Inspectorate of the MOST were put on hold until “an agreement on a scheme to tackle this issue is reached by the two ministries”, said an official of the MOST.

The complainants are therefore directed to the court route, which still takes too much time and effort for even a simple case that can be handled straightforwardly by the administrative proceeding. Over a period of more than 2 years since 2013, many discussions and workshops have been organized with participation of both the MOIC and MOST, but yielded no sign of a “meeting of the minds” between the two ministries.

On 8 June 2016, after many debates, a long-awaited joint circular, Joint Circular No. 14/2016/TTLT-BTTTT-BKHCN, was issued to establish a procedure for cancellation of the disputed domain names. Joint Circular 14 takes effect as from 25 July 2016.

Under Joint Circular 14, cancellation of disputed domain names can be made by (i) a compulsory return of the disputed domain names by the registrant to the registrar if all elements for cybersquatting are found, and (ii) withdrawal of the disputed domain names by the registrar if the registrant does not make that compulsory return in 30 days from request.

The requirements for compulsory return of the disputed domain names are noteworthy, and seem to be a mixture the elements provided for under the UDRP and the legal practice of Vietnam. These requirements include:

(i) The .vn domain name is identical with or confusingly similar to
     protected trademarks, trade names or geographical indications;
(ii) The user of the .vn domain names has no rights or legitimate interests
     over the protected trademarks, trade names or geographical indications;
(iii) The website under the .vn domain names bears information on
     advertisement, promotion, offer for sales of products/ services that are
     identical with or similar to or related to the products/ services of the owner
     of the trademarks, trade names or geographical indications, or causing
     damage to reputation or interest of the owner of the trademarks, trade
     names or geographical indications, or defaming the products/ services of
     the owner of the trademarks, trade names or geographical indications.

The first and second requirements reflect the first and second elements set forth under the UDRP. However, for the third requirement, it seems to deviate from the notion of “bad faith registration and use of the disputed domain name” to follow a nationally accepted practice that normally requires a direct and, in some cases, actual damage.

Under the third requirement as mentioned above, to apply the sanction of “compulsory return of the disputed domain name to the registrar”, the website under the dispute domain names had to be active, and furthermore, it must bear something relating to the owners of the trademarks, trade names, geographical indications, or their products/ services. With such a regulation, Joint Circular 14 seems to rules out a number of circumstances that are regarded as “bad faith use of the domain names”, including in particular the passive holding where the registrant just holds the domain names without activating it and by that way, preventing the trademark/ trade name owners using the mark/ name in a corresponding domain name. Joint Circular 14 also seems to disregard scenarios of domain name speculation for the purpose of re-selling them to the trade mark/ trade name owners, or of parking and landing pages or pay-per-click links, where the registrant may ride on the fame of the trademarks/ trade names contained in the domain names to attract Internet users to its website for commercial gain without any needs to refer to the trademark/ trade name owners or their products in those pages or links. These circumstances are quite prevalent in the cyberspace, but for them, Joint Circular 14 cannot help the trademark/ trade name owners to retrieve the domain names, or remove the disputed domain names from the register.

Joint Circular 14 issued in an effort to strike a balance between the rigid viewpoints of the MOIC and the more flexible stance of the MOST. However, the door to the administrative proceeding has just opened far enough to reveal a very narrow route, while leaving too many acts of bad faith use of domain names still at large. Joint Circular 14 has only been effective for a short time, so questions still remain on the actual interpretation of this new regulation. If Joint Circular 14 is implemented strictly with a narrow interpretation, the administrative proceeding may be still of a little use in tackling an increase in cybersquatting involving “.vn” domain names.

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