The gap problem


 

Andrey Ternovskiy, a 18 year old computer nerd from Moscow, is a living proof that one man can still start up a big business. In summer 2009, he launched the website Chatroulette.com. According to the conventional story he got bored talking on Skype to people he already knew and started fiddling with a programming code for a new site that would recreate an atmosphere of an Eastern bazaar. On Chatroulette.com you can have a one-to-one video chat with someone you’d never otherwise meet and will never see again - or just ‘next’ that one and move to someone new.

In a matter of months the site became ‘the big thing’ - more than a million people clogged its servers every day. What looked like a toy in the hands of a teenager has turned out to be one of the most talked about social networks in the world and, potentially, a huge business. Moreover, success came to Ternovskiy as unexpectedly and unpredictably as to the army of hi-tech professionals and venture capitalists that flock to his doors today.

The idea that a sole inventor, not an R&D department of a multi-million corporation, must be the centre of protection lies at the heart of the Western industrial revolution and our IP law. What is good for him is good for the nation too. Sometimes, however, we seem to forget that basic truth and act as if the days when a loner could start something new and big have gone.

The Ninth Appellate Court in Russia has ruled that the trademark has a priority over the domain name, even if the trademark was registered later.

InterElektrik Ltd registered the domain ‘interelektrik.ru’. Then, another company with a similar name Inter Electric Ltd. registered the trademark 'Interelektrik' and asked the court to prohibit the use of the domain name and recover compensation for the abuse of the trademark. Both demands were granted.

So far, courts have honoured claims of trademark owners if the trademark application was filed before domain registration, thus combating cybersquatters - those who register domains that match famous brands. That was a difficult compromise, but the right one.

Starting a new business is not always the process described in those “smart alec” books written by professional advisers, gurus of entrepreneurship, but a painful cut-and-try road with an uncertain end.

Registering a domain takes a couple of minutes, several mouse clicks and a few quid. Registering a trademark takes a year, an attorney and a few hundred pounds. For someone who just started toying with something new the first is necessary, the second is lavish.

Asking web entrepreneurs to go through a costly procedure to protect something that might not become business - and, statistically, will not become business in 99 cases out of 100 - is the same as asking a writer to patent a book that is not yet finished. (Chatroulette.com, for instance, began as Head-to-Head.org).

The problem, however, is deeper than a simple matter of costs. The principle of ‘first to invent’ is being transformed into ‘first to file’, the race that is well-done by deep-pocketed corporations and very badly by small businesses. The focus of protection is being moved from entrepreneurs to venture capitalists and big companies.

Yet our IP law stands on a different foundation. It is based on the idea that an individual must be protected in the first place. If the founding fathers of Western IP laws had thought of the interests of large corporations, the legislation in its modern form would not have appeared at all.

Chatroulette.com came online in summer 2009, yet the trademark applications were filed nine months later, in spring 2010, when the site was already an international hit. A pretty good gap, if you ask me.

 

July 18, 2010
text: J. Vermin
picture: caraman - Fotolia.com

 

 

THE DECISION IS RIGHT

TEXT: Denis Khabarov, partner, Baker & McKenzie

Domain names are not equated to intellectual property objects under current legislation in Russia, and therefore it is not clear why a domain name, even though it came into existence before a trademark, should restrict the legal protection of a duly registered trademark.

Domain names were included in the list of protected means of individualization in the very first versions of the draft of Part IV of the Russian Civil Code. However, after a detailed examination of this issue, it was decided to remove the separate chapter dedicated to domain names from the draft of Part IV, and not to place domain names on the same level as intellectual property objects. I am not aware of any jurisdiction which would consider domain names equivalent to, or protect them as, intellectual property objects. It would seem strange to "equalize" in rights, for instance, a trademark which takes Rospatent at least a year to register and which undergoes a lengthy legal expert examination on a wide range of criteria, and a domain name registered by pushing a couple of buttons on a keyboard.

I am unaware of a jurisdiction which would protect domain names as intellectual property objects
 

Indeed, there is a potential problem of so-called “recapture" of domain names, when a trademark or company name may be registered exclusively for the sake of unfairly acquiring rights to some well-known domain. However, first of all, Russian legislation provides for other legal mechanisms against such unfair actions. Secondly, a domain name in no way differs from a store sign or the name of some product. It is to protect them from being used by third parties that trademarks, for example, exist in the first place. If some brand or name becomes popular with consumers, acquiring legal protection with the goal of preventing other parties from using or registering it is the logical next step. It is not clear why the situation should somehow work out differently with regard to domain names.

 

 

When domain names are more important than trademarks
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Comments

Good day,

Some countries allow a trademark holder to take the corresponding domain name if the current owner isn't doing anything with it. Is there a law similar to this that allows the holder to do so in Russia. If an .ru domain is not being used but is registered, the owner of the domain name is not responding to the trademark holder and the company name that is registered under the domain seems to be out of business, will the Russian law allow the trademark holder to come in and take the domain name?

Thank you in advance for your help.

Elena