Domain name dispute resolution: the Portuguese and international context

Ricardo Costa Macedo and João Bertholo Meireles of Caiado Guerreiro discuss the protection – or lack thereof – for domain names in relation to registered trademarks.
Articles 16/08/2023

Nowadays, domain names are becoming increasingly more important, being used to identify and distinguish economic operators online. However, due to the legal framework in force, domain names may be registered in an abusive manner, for instance, registrations purely speculative and prompted by bad faith.

The technical function of locating an “address” on the Internet has long been surpassed, as domain names are now regarded as genuine and proper signs capable of distinguishing the different economic activities, with businesses utilizing them to identify the goods and services they commercialize.

In Portugal, domain names are registered with .PT and are under the responsibility of the Associação DNS.PT, whose regime is based on the “first come, first served” rule, whereby the domain name is registered in favor of its first applicant.

Furthermore, contrary to what occurs in the context of trademarks, which may co-exist in the marketplace even though they are identical if they designate different goods or services, the domain name regime is governed by the unicity principle. In other words, domain names can only be registered once, with no repeated names existing within the same category and level of classification.

Having said that, looking at article 6 of the Regras de Registo .PT (the Portuguese registration rules), read in conjunction with its article 27, one can see that it is inadmissible to register a domain name that: (1) reproduces a mark, name, or designation that is widely and generally known, and (2) constitutes an abusive appropriation, carried out in bad faith, of a right or interest legally protected of a third party.

However, despite the abovementioned requirements, domain names may be registered in an abusive manner, for instance, registrations purely speculative and prompted by bad faith, since the entities responsible for granting domain names usually only carry out a post hoc monitorization and not a preventive examination.

In such situations, the aggrieved party can resort, at its discretion, to legal action, filing a complaint before the Portuguese Intellectual Property Court, or resort voluntarily to an institutionalized arbitration center, such as ARBITRARE, which is also competent for settling disputes arising in Portugal.

The abovementioned Intellectual Property Court or the institutionalized arbitration center will customarily analyze, in each dispute, whether there is a legally protected right and whether there is an abusive appropriation, done in bad faith. Regarding the latter requirement, it is necessary to ascertain if, for example, the domain name was registered with the intention of selling it later, obtaining unjustified and unfair profits, and/or if the registration was intended to disrupt the claimant’s professional or commercial activities.

The final ruling typically either maintains the status quo, thereby agreeing with the registrant, or orders the removal or transfer of ownership of the domain name, being in accordance with the initial request made by the claimant. In this context, claims for civil damages may also be dealt with, arising from the misuse of the domain name.

At the international level, domain name disputes are often referred to arbitration, with the access to an arbitration tribunal being made either by means of an arbitration agreement, when, for example, the registrant undertook to submit all disputes arising from that registration to this type of alternative dispute resolution, or by means of a submission agreement, such as in cases where the parties, already in conflict over a given domain name, agreed to settle the dispute voluntarily by means of institutionalized arbitration.

Thus, disputes regarding the abusive usage of domain names, especially with .COM and .ORG, tend to be referred to the World Intellectual Property Organization (WIPO), which has an Arbitration and Mediation Center capable of providing, apparently, time- and cost-efficient solutions.

In these cases, the WIPO Arbitration and Mediation Center follows the guidelines and recommendations of the Uniform Domain Name Dispute Resolution Policy (UDRP). Similarly to what is stated in the Regras de Registo .PT (the Portuguese registration rules), it is stipulated, in paragraph 4(a) UDRP, that it is up to the Arbitral Tribunal to ascertain whether: (1) the respondent’s domain name is identical or confusingly similar to a trademark or service mark in which the complainant has rights; (2) the respondent has a right or legitimate interest in relation to the disputed domain name; and, lastly, (3) the respondent registered the domain name and is using it in bad faith.

Concerning the finding of bad faith, this is probably the most difficult requirement to demonstrate. Consequently, most claimants, when they do not provide sufficient evidence of the registrant’s intention, end up having their claim rejected, as they do not satisfy, on a balance of probabilities, such requirement, with malice or serious fault not being proved.

Moreover, it is insufficient to simply claim that the registrant is infringing a registered trademark. In this respect, it is important to mention the principle of speciality applicable to trademarks, which only protects their owners against the use of identical or similar signs in relation to identical or similar goods and services, covered by the trademark registration, existing a likelihood of confusion between both signs in the mind of the average consumer.

From this perspective, an intellectual property right is not infringed whenever the domain name is being used in relation to goods or services other than those for which the trademark is registered, since its protection is limited to those specific goods and services.

That being said, some authors, namely Alexandre Dias Pereira, argue that the domain name regulation represents an exception to the principle of speciality, protecting trademark owners extensively also against goods and services other than the ones covered by the trademark registration.

Looking once more to Portugal, recent case law of the Portuguese Supreme Court of Justice extended the scope of applicability of unfair competition, stating that it confers protection against all practices targeting the same clientele, thus being suitable to prevent the abusive registration of a domain name.

Other instruments, such as the principle of good faith (bona fide) or abuse of rights, appear to be equally suitable to protect holders of intellectual property rights and may be available to claimants when asserting the existence of an abusive registration of a domain name.

In conclusion, in today’s society domain names have acquired significant importance and are now considered to be true distinctive signs of commerce, with the capacity of identifying their holder and his or her goods and services.

Nevertheless, as its legal status has not yet been amended to reflect its nature as a distinctive sign, it is recommended that companies and entrepreneurs register them, for example, as trademarks, giving them additional protection.

As a matter of fact, companies and entrepreneurs are becoming increasingly aware of the importance of domain names, incorporating them into their portfolio of intellectual property rights.

“Disputes regarding the abusive usage of domain names, especially with .COM and .ORG, tend to be referred to the World Intellectual Property Organization (WIPO).”

The content of this information does not constitute any specific legal advice; the latter can only be given when faced with a specific case. Please contact us for any further clarification or information deemed necessary in what concerns the application of the law.

Practice Areas

  • Intellectual Property