30. Oktober 2018
Slovakian top-level domain authority (.sk) not individually liable for IP infringement
In a recent case in Slovakia, a claimant decided to sue only the Slovakian administrator of the ccTLD ".SK" – the company SK-NIC, a. s. ("SK-NIC") requesting a permanent injunction. The petition was based on the fact that the domain name holder (a natural person without any relationship to the claimant) registered the domain name "dpdkurier.sk" and re-directed this domain name to the claimant’s official website without any authorisation. It was apparent that the domain name holder was carrying out certain deceptive activities towards third persons that could create an unlawful likelihood of confusion between the domain name holder and the claimant.
According to the claimant's petition, the domain name included the distinctive characteristics of the claimant (in particular, the first letters of the claimant's business name and reference to the claimant’s type of business). In support of such petition, the claimant asserted that the domain name in question was likely to cause confusion with its business name and earlier domain name, and thus the said domain name took unfair advantage of the business name and goodwill of the claimant. Moreover, the claimant said that the domain name holder was intentionally using the domain name in order to deceive the claimant’s business partners and customers.
In light of such arguments, the claimant decided to resolve the possible infringement of its rights in a rather non-standard way by requesting a permanent injunction against SK-NIC. With respect to the Slovakian court procedures concerning petitions for interim injunctions, it needs to be stressed that in most of the cases these petitions are assessed by the court ex parte, without the defendant being heard and without cross-examination of the evidence submitted by the petitioner. Accordingly, usually the first time the defendant becomes aware of the fact that the petition for granting an interim injunction has been filed against him is the moment he receives the injunction issued by the court.
Court rulings
A court of first instance held that SK-NIC as the defendant was obliged to transfer the domain "dpdkurier.sk" to the claimant within three days of receiving the injunction. Moreover, the injunction was not time-limited, and thus its effects were permanent.
Due to the fact that SK-NIC believed that they are not entitled to transfer any domains belonging to a third party, SK-NIC appealed against such injunction. The appeal was built on the following procedural arguments:
- the court of first instance (District Court Bratislava IV) does not have jurisdiction over intellectual property cases (including domain name cases), as such disputes are entrusted exclusively to the specialised District Court Banska Bystrica;
- according to the Slovakian Civil Procedure Code, by issuing an interim injunction concerning an intellectual property right, the court must order the claimant to initiate a court action within a certain period after the injunction is issued. Despite this mandatory rule, the court of first instance issued the injunction with permanent effect (it contains neither a time limitation nor an obligation on the claimant to file an action on merits).
Further, SK-NIC as the ccTLD "sk" administrator declared that its activities in respect of domain names are exclusively technical, automatic and passive. SK-NIC is responsible only for administration and control of the policies and operation of the ccTLD registry on the well-known principle "first come, first served".
SK-NIC also stressed that the ccTLD administrator cannot be responsible for individual domain names and for potential infringement of third parties via domain names. The basic relationships regulated by the SK-NIC's domain rules were pointed out to the Court. Last but not least the defendant explained that the ccTLD administrator does not have any rights in domain names registered by or on behalf of domain name holders. Therefore, the ccTLD administrator may only carry out certain technical actions concerning the domain name transfer to the claimant provided that the real domain name holder would be a main defendant in the proceeding (the court must respect the right of the domain name holder to a fair trial).
In other words, the court is entitled to order the domain name holder to transfer the domain name and SK-NIC may be ordered only to perform technical actions necessary to execute such transfer. It is also worth noting that EU case-law considers domain names as property rights protected by Article 1 of Protocol No. 1 to the Convention. From our perspective, if the court orders the transfer of a domain name without the domain name holder being a party to the court proceeding, such ruling would be a breach the holder's right to fair trial and principle of equality
The Court of Appeal upheld such legal approach. The appellate court ruled that the court of first instance should firstly consider its jurisdiction over the intellectual property aspects of the case. The poor reasoning of the first instance decision was also clearly in the mind of the Court of Appeal. In light of the appellate court's opinion, the case was forwarded to the district court vested with the competence to hear intellectual property cases. The court based its assessment on the ground that SK-NIC does not assume any liability for possible infringement of third party rights, and such liability lies solely with the domain name holder. The ruling explicitly states that SK-NIC shall not be deemed an infringer and as SK-NIC shall not be obliged to carry out any activity on the basis of a third party's request.
Finally, the court dismissed the petition and concluded that SK-NIC is in the position neither of an infringer nor a defendant.
Practical consequences
The recent decision is a welcome development that limits the options of making the ccTLD administrator liable for wrongdoing of domain name holders. In practice, the IP right holders may sue the domain name holder who infringes their right. The .sk top level domain administrator (SK-NIC) may also play a part in such proceedings, but solely because SK-NIC has practical capabilities effectively to execute some types of judgements (for example, domain name transfer from the defendant to the claimant).
Moreover, an alternative dispute mechanism (ADR) for resolving .sk domain names disputes was established in September 2017. This new ADR procedure provides IP right holders with separate access to an extremely effective, practical, and time/cost saving mechanism for enforcement of their rights in Slovakia.
