2004Da72457 Prevention of Usage of Internet Domain

Justices Park Si-hwan (Justice in Charge), Park Ill-hoan, Kim Nung-hwan (Presiding Justice)

Main Issues

1. Whether the legal nature and policy of the UDRP (Uniform Domain Name Dispute Policy) by ICANN (The Internet Corporation for Assigned Names and Numbers), actually has the binding power regulating the substantive relations on rights and obligations between the registered person of the domain name and the third party, beyond the mandatory administrative procedure.
2. After The 'Gab' financial institution which has trademark or service mark related to "CCF" was acquired by the famous foreign financial holding company, 'Eul' has registered the domain name composed of the business name of the above financial holding company and "CCF" at the ICANN (The Internet Corporation for Assigned Names and Numbers). The 'Gab' company argued the prevention of the domain name pursuant to the UDRP (Uniform Domain Name Dispute Policy) of ICANN (The Internet Corporation for Assigned Names and Numbers) to 'Eul'. The case holding that UDRP (Uniform Domain Name Dispute Policy) does not have binding power regulating the substantive relations on rights and obligation between 'Gab' company (the third party) who is the trademark holder and registered person of the domain name.

Summary of Decision

1. UDRP (Uniform Domain Name Dispute Policy) prepared by ICANN (The Internet Corporation for Assigned Names and Numbers) has been inserted to the content of the registration stipulation between registration agency of domain name and applicant of the registration of domain name. When there is dispute between the applicant of domain name and the holder (hereinafter "the third party") of the trademark or service mark (hereinafter "right of trademark etc.") UDRP is the mere administrative procedure of the registration agency that tries to enhance the adequateness of the administration of the registration by making prompt decisions on maintenance, cancellation and transfer. Without special circumstances, between the applicant of the domain name and the third party, UDRP does not have binding power regulating the substantive relations on rights and obligation concerning registration and usage of domain name and rights on trademark. The third party cannot claim the substantive right to directly prevent the applicant of the domain name from usage prescribed in the requirement of UDRP going beyond the mandatory administrative procedure. Hence, the court, which is on deliberation and judgment of the suit concerning domain name, should apply relevant law possible for this case, not automatically applying UDRP, when deliberating and judging this case.
2. After The 'Gab' financial institution which has trademark or service mark related to "CCF" was acquired by the famous foreign financial holding company, 'Eul' has registered the domain name composed of the business name of the above financial holding company and "CCF" at the ICANN. The "Gab' company applied for the initiation of the mandatory administrative proceeding to the international dispute resolution agency asking for a decision commanding the plaintiff to transfer the domain name of this case to itself, pursuant to the UDRP. The 'Eul' who is the registered person for the domain name, asked for the confirmation that 'Gab' company has no right to ask for the prevention of the usage of domain name. The UDRP does not have binding power regulating the substantive relations on rights and obligation, therefore, the object of the deliberation and review of the court are not whether above registration satisfy the elements of the UDRP, but whether the above financial company can ask for the prevention of the domain name to the registered person of the domain name based on his right of trademark.

Reference Provisions

1. Article 65 of the Trademark Act, Article 2, 4 of the Unfair Competition Prevention and Trade Secret Protection Act.
2. Article 65 of the Trademark Act, Article 2, 4 of the Unfair Competition Prevention and Trade Secret Protection Act.

Article 65 of the Trademark Act (Right to Request for Prohibition of Infringement)

(1) An owner of a trademark right or exclusive licensee may request the person who has infringed or might infringe his right to prohibit or prevent such infringement.

(2) Where an owner of a trademark right or exclusive licensee makes a request under paragraph (1), he may request the disuse of things by which the infringement is caused, removal of equipment offered for the infringement, and other acts necessary for the prevention of infringement.

Article 2 of the Unfair Competition Prevention and Trade Secret Protection Act (Definitions)

For the purpose of this Act, the definitions of terms shall be as follows:

1. The term "unfair competitive act" means the act falling under any of the following items:

(a) An act of creating confusion between one's own goods and any other person's goods, by using any one identical with or similar to a name, trade name, trademark, container or package of goods of the other person, or a mark indicating the other person's goods, which is known to the public in Korea, or by selling, distributing, importing or exporting goods using any of the above enumerated manners;

(b) An act of creating confusion with any other person's business facilities or activities by using any one identical with or similar to the other person's name, trade name, or emblem, or other mark indicating the other person's business which is known to the public in Korea;

(c) Other than the acts of creating confusion under items (a) and (b), an act of damaging the identity of mark or the fame of any other person, by using any one identical with or similar to a name, trade name, trademark, or container and package of goods of the other person, or other mark indicating the other person's goods or business, which is known to the public in Korea, without any justifiable grounds as prescribed by the Presidential Decree such as noncommercial uses, or by selling, distributing, importing or exporting goods using any of the above enumerated manners;

(d) An act of misleading the public to understand the place of origin of any goods either by falsely marking that place on any commercial document or communication, in said goods or any advertisement thereof or in any manner of misleading the general public, or by selling, distributing, importing or exporting goods bearing such false mark;

(e) An act of making a mark misleading people to understand as if any goods were produced or processed in an area other than that where said goods are produced, manufactured or processed, on any commercial document or communication, in said goods or any advertisement thereof, or in any manner of misleading the general public, or an act of selling, distributing, importing or exporting goods bearing such mark;

(f) An act of assuming any other person's goods, or an act of publicizing any goods or making a mark in any manner of leading the public to misunderstand their quality, contents, manufacturing process, use, or quantity, in latter goods or advertisement thereof, or an act of selling, distributing, importing or exporting goods using such method or mark;

(g) An act that any agent or representative of a holder of the right to a trademark registered with any party to the Paris Convention for the Protection of Industrial Property (hereinafter referred to as the "Paris Convention"), with any member state of the World Trade Organization, or with any signatory state of the Trademark Law Treaty, or to a trademark similar thereto, or any person who has been an agent or representative of such holder within one year before the date of conducting such act, uses the trademark, without any justifiable grounds, on the goods identical with or similar to the designated goods of the relevant trademark, or an act that such agent or representative sells, distributes, exports, or imports the goods using the relevant trademark;

(h) An act of registering, holding, transferring or using the name, firm name, trade mark, mark or other same or similar domain name of other person that are widely known in the country by any person who holds no justifiable title to do so for any of the following purposes:

(ⅰ) The purpose of selling or renting marks including trademarks, etc. to any person who holds a justifiable title thereto or any third party;

(ⅱ) The purpose of impeding the registration and use of the domain name by any person who holds the justifiable title therefore; and

(ⅲ) The purpose of making commercial profits; and

(i) An act of transferring, renting, exhibiting, importing or exporting goods that are manufactured by counterfeiting the form (referring to the shape, appearance, color and gloss or the combined one of them, including the form of test products and the form in goods brochure) of goods that are manufactured by other person: Provided, That any of the following acts shall be excluded:

(ⅰ) An act of transferring, renting or exhibiting, importing or exporting goods that are manufactured by counterfeiting the form of goods for which 3 years lapse from the date on which the form of the goods, including test products, takes shape; and

(ⅱ) An act of transferring, renting, exhibiting, importing or exporting goods that are manufactured by counterfeiting the common form of goods that are identical to goods that are manufactured by other person (in the case where the goods of the same kind are nonexistent, referring to the goods that are identical or similar to other goods in terms of function and efficiency);

2. The term "trade secret" means any technical or operational information useful for any production and sale methods and other business activities, which is not known to the public, has an independent economic value, and has been maintained in secret by considerable effort;

3. The term "act of infringing on trade secret" means any of the following acts:

(a) An act of obtaining any trade secret by a larceny, fraud, menace, or other unfair means (hereinafter referred to as an "unfair obtaining act"), or an act of using trade secret so obtained or disclosing it to the public (including an act of informing any specific person thereof while keeping it undisclosed; hereinafter the same shall apply);

(b) An act of obtaining any trade secret with knowing the fact that any unfair obtaining act was involved, or without knowing such fact by gross negligence, or an act of using trade secret so obtained or disclosing it to the public;

(c) An act of using any trade secret or disclosing it to the public with knowing the fact that any unfair obtaining act was involved after obtaining it, or without knowing such fact by gross negligence;

4. The term "domain name" means the figures, letters, signs or the combined ones of them that are equivalent to digitalized addresses on the Internet.

Article 4 of the Unfair Competition Prevention and Trade Secret Protection Act

(Claim for Prohibition of Unfair Competitive Act)

(1) Any person whose business profit is or might be infringed by any unfair competitive act may file a claim before a court for the prohibition or prevention of such unfair competitive act against a person committing or attempting to do such act.

(2) When the person files the claim referred to in paragraph (1), he also may file a claim for the disposal of goods that has caused the unfair competitive act, the removal of facilities that are used for the unfair competitive act, the cancellation of the registration of the domain name subject to the unfair competitive act and measures necessary to ban or prevent the unfair competitive act. <Amended by Act No. 7095, Jan. 20, 2004>

(d) An act that a person who is obliged to keep any trade secret undisclosed owing to any contractual duty or otherwise, uses or discloses it to the public with the intention to obtain any unfair profit or to inflict any damage on the person holding it;

(e) An act of obtaining any trade secret with knowing the fact that it is disclosed to the public in such manner as provided in item (d) above or the fact that such disclosing act was involved, or without knowing such fact by gross negligence, or an act of using said trade secret so obtained or disclosing it to the public; and

(f) An act of using any trade secret or disclosing it to the public with knowing the fact that it is disclosed to the public in such manner as provided in item (d) or the fact that such disclosing act was involved after obtaining it, or without knowing such fact by gross negligence;

• Plaintiff, Appellant: Plaintiff
• Defendant, Appellee: Credit Commercial de France (Attorney Yang, Youngjoon and 3 others)
• Court of Second Instance: Seoul High Court 2004Na 10697 Delivered on November 24, 2004

Disposition

The decision of the court below is reversed and the case remanded to the Seoul High Court.

Reasoning

We review the ground of appeal.

1. The fact-finding and determination of the Court below

A. The Court below acknowledged the following facts based on the adopted evidences.

(1) The Defendant is the corporation founded in 1917 in France. It has over 660 branches in France and is a finance corporation conducting individual and company financial business. At present, it has applied and registered many trademark and service mark related to "CCF". It has applied and registered the Service mark composed of "CCF" designating "Financial business" in August 31, 1989.

(2) Non-party HSBC holdings Plc. (Hereinafter "non-party corporation") is financial holding company conducting business with about 7000 branches over 80 countries including Korea.

When the news was reported in April 2 2000 in Korean daily newspapers that the non-party corporation is acquiring the defendant corporation, non-party who was the husband of the Plaintiff registered at Hangang system which is approved agency for domestic registration for generic Top level Domain ending with ".com", registered the internet Domain name "ccfhsbc.com" and "hsbcccf.com" (hereinafter 'each domain name of this case') from the Internet Corporation for Assigned Names and Numbers (hereinafter ICANN) and later transferred the registration of the domain names to the plaintiff in May, 13, 2001

(3) ICANN drafted the Uniform Domain Name Dispute Resolution Policy, UDRP (hereinafter UDRP) and Rules for Uniform Domain Name Dispute Resolution Policy (hereinafter, 'Rules of Procedure') for the prompt and adequate solution of the dispute on the usage and registration of the Internet Domain Name, and have them adopted by the registering agencies. Hence, Hangang system has the clause in Article 1 of the stipulation of Domain Name Registration. that the registering person of the domain name who consented to above stipulation is regarded as having consented to the UDRP. It has displayed the Korean interpreted document of UDRP on Hangang system website. The non-party and the plaintiff each consented to the Stipulation of Domain Name Registration presented by Hangang System in the process of registration and transfer registration.

(4) Main contents of the UDRP concerning this case are the followings,

(a) Article 3 of the UDRP (Cancellations, Transfers, and Changes)

The Agency will can cancel, transfer or otherwise make changes to domain name registrations under the following circumstances:

(item B) our receipt of an order from a court or arbitral tribunal, in each case of competent jurisdiction, requiring such action;

(Item C) our receipt of a decision of an Administrative Panel requiring such action in any administrative proceeding to which the applicant is a party and which was conducted unde this Policy or a later version of this Policy adopted by ICANN

(b) Article 4 of the UDRP (Mandatory Administrative Proceeding)

① a (Applicable Disputes):

The Applicant of domain name is required to submit to a mandatory administrative proceeding in the event that a third party (a "complainant") asserts to the applicable Provider, in compliance with the Rules of Procedure, that

ⓐ applicant's domain name is identical or confusingly similar to a trademark or service mark in which the complainant has rights; and

ⓑ applicant has no rights or legitimate interests in respect of the domain name; and

ⓒ applicant's name has been registered and is being used in bad faith.

② Item K (Availability of Court Proceedings)

The mandatory administrative proceeding requirements set forth in Paragraph 4 shall not prevent either you or the complainant from submitting the dispute to a court of competent jurisdiction for independent resolution before such mandatory administrative proceeding is commenced or after such proceeding is concluded. If an Administrative Panel decides that your domain name registration should be canceled or transferred, we will wait ten (10) business days after we are informed by the applicable Provider of the Administrative Panel's decision before implementing that decision. We will then implement the decision unless we have received from you during that ten business day period official documentation that you have commenced a lawsuit against the complainant in a jurisdiction to which the complainant has submitted under Paragraph 3(b)(xiii) of the Rules of Procedure. If we receive such documentation within the ten business day period, and we will take no further action, until we receive evidence satisfactory to us that your lawsuit has been dismissed or withdrawn; or a copy of an order has been dismissed or withdrawn; or a copy of an order from such dismissing your lawsuit or ordering that you do not have the right to continue to use your domain name.

(5) The defendant contacted the WIPO (World Intellectual Property Organization) Arbitration and Mediation Center targeting the Plaintiff who is the registered person of each domain name of this case following the UDRP and Rules of Procedure, in January 20, 2002.

The defendant applied for initiation of mandatory administrative proceeding asking the transfer of the domain name of each case. The Administrative Penal of above Arbitration and Mediation Center made the decision to command the Plaintiff to transfer the domain name to the defendant.

(6) After the above decision, Hangang System notified the Plaintiff through electric mail in May 27, 2002 that if the Plaintiff do not file the suit at the court within 10 business days, it will transfer the each domain name in this case to defendant. Hence, the Plaintiff filed suit at Seoul Central district Court in June 4, 2002.

B. The court below, based on the above approved facts, decided that the plaintiff in this case is regarded to have consented to the UDRP by consenting the stipulation of the registration of domain name of Hangang system while the plaintiff was registering each domain name of this case.

The plaintiff was obliged to follow the administrative proceeding of the above Arbitration and mediation center after mandatory administration proceeding on each domain name of this case has been initiated by the WIPO Arbitration and mediation center prompted by the defendant.

Further, the defendant registered the trademark or service mark which was composed of "CCF" or related to "CCF" in many countries including Korea, the defendant has the right of trademark "CCF", the plaintiff who has registered the each domain name in this case which is similar enough to confuse the trademark "CCF", did not launch the concrete business but only formally opened a website using the domain name of this case. The Plaintiff does not have the right or proper interest over each domain name of this case, which was applied and registered with the sole purpose to obstruct the plaintiff's registration by improper prior occupation. The Plaintiff's application and registration of the domain name of this case, satisfy the requirement of the Article 4 1 (i) or (iii) of the UDRP. The defendant has the right to directly apply the prevention of usage of the domain name of this case to the plaintiff pursuant to the Article 4 of the UDRP.

2. The judgment of the Supreme Court

However, we cannot accept the judgment of the court below due to the following reason.

A. UDRP prepared by ICANN has been inserted to the content of the registration stipulation between registration agency of domain name and applicant of the registration of domain name. When there is dispute between the applicant of domain name and the holder (hereinafter "the third party") of the trademark or service mark (hereinafter "right of trademark etc."), the UDRP is the mere administrative procedure of the registration agency which tries to enhance the adequateness of the administration of the registration by making prompt decisions on maintenance, cancellation and transfer. Without special circumstances, between the applicant of the domain name and the third party, UDRP does not have binding power regulating the substantive relations on rights and obligation concerning registration and usage of domain name and rights on trademark. The third party cannot claim the substantive right to directly prevent the applicant of the domain name from usage prescribed in the requirement of the UDRP going beyond the mandatory administrative procedure. UDRP has ambiguous concept on trademark right or service mark right in its stipulation and clause on reference law is unclear. The UDRP has its innate limitation as it goes against harmony with the legal system of each countries in the world, because UDRP goes against the principle of territoriality stipulated in the Article 6(3) of the 'Paris Convention for the Protection of Industrial Property'

Also, the UDRP itself has arranged its rules expecting that even before, in the middle or conclusion of the mandatory administrative proceedings, a court of competent jurisdiction can finally resolve the disputes on domain name applying the relevant rules. (Refer to Article 4(k) of the UDRP; Article 18(a) of the Rules UDRP. This feature supports our argument. Therefore, the court, which is on deliberation and review of the suit concerning domain name, should apply relevant law possible for this case not automatically applying UDRP, when deliberating and judging this case.

B. In the lawsuit in this case, the defendant who applied for the initiation of the mandatory administrative proceeding by WIPO Arbitration and Mediation Center, the Administrative Penal presiding over this case made a decision commanding the plaintiff to transfer the domain name of this case to the defendant pursuant to UDRP. Aside from the consideration that UDRP, which governs the administrative procedure for registration of domain names, could be applied to the mandatory administrative procedure by the consent between the plaintiff and Hangang systems, it cannot be viewed that it has the binding power to regulate the substantive relations on rights and obligation going beyond the mandatory administrative procedure. It is not under the object of deliberation and review of this case whether usage and registration of each domain name of this case satisfy the elements of cancellation, transfer and the registration of UDRP. It is under the object of deliberation and review of this case, whether the defendant can ask the plaintiff for prevention of the usage of the domain name of this case based on his right of trademark.

In spite of this, the court below judged that UDRP which is a mere rules of administrative procedure of registration of the registering agency of domain name, should have binding power to regulate the substantive relation of rights and obligation between the Plaintiff and defendant and further decided that according to UDRP, the defendant has the right to directly ask the prevention of the usage of the domain name of this case to the plaintiff. The court below was erroneous in affecting the result of the case by misunderstanding the binding power of the UDRP and reference law. Hence, the argument of the ground of appeal is valid on this point.

3. Conclusion

Therefore, the judgment of the court below shall be reversed and the case shall be remanded to the court below for a retrial and determination. It is so decided per Disposition by the assent of all Justices who reviewed the appeal.

Source

• Supreme Court Decision 2005Da22671 Delivered on July 27, 2007, Supreme Court Library of Korea