There have been many instances where a company, intending to expand its business into the Internet world, learns that someone already has registered and owns the company’s business name on the Internet. Because its business name is not available for its online website, the company must choose between creating a website using a domain name different from its offline business name or changing the offline business name to correspond with the domain name. Either option may confuse consumers or harm the established relationships between the business and customers. Another option is to attempt to purchase the domain name from the registrant. But in reality, the purchase of domain names does not happen easily, primarily because of disagreements over price. If efforts to purchase the domain name fail, as a last resort the company may seek a judicial order transferring the domain name to its ownership and control.
If the domain name registrant is currently doing business using the registered name, it will be difficult to obtain an order transferring the domain name ownership. However, where the domain name registrant has registered the domain name in bad faith, without actually using it and intending to sell the domain name at an exorbitant price to a company that owns and is using a trademark contained within the name, it is highly likely that the domain name registrant will be considered a cyber-squatter. In that case, the company seeking the domain name should seriously consider judicially seeking a transfer of the domain name to its ownership and control.
In the past, when a foreign company sought a transfer of a domain name from a Korean domain name registrant to the foreign company, an important factor affecting the transfer was how well-known the foreign company was within Korea. If a foreign company was widely known both in and out of Korea, a transfer from the Korean ‘cybersquatter’ to the foreign company was likely. But if the foreign company was known only within a local city or region in its own country and not well known in Korea, it was difficult to have the domain name transferred.
Recently, however, Korea amended the relevant law (the Internet Address Resources Act), following a world-wide trend. Under the amended Act, petitioners may raise claims concerning not only country-code top-level domain names, but also generic top-level domain names like ‘.com.’ and seek the transfer of domain names as well as deregistration. For generic top-level domain names, even if they are not widely known in Korea, as long as the company seeking the transfer has been doing business with the subject name for a considerable amount of time, the amended Internet Address Resources Act has opened new doors to having the domain name transferred to the rightful owner. And the Korean courts have been rendering decisions honoring the amendment.
For example, earlier this year, in a case handled by our firm, the Court ordered a domain name transferred from a Korean registrant to our client, a United States company which had operated a used-car business for many decades, but primarily in a single city in one state. The American company had used the subject trade name in its business activities the entire time but was unable to use its trade name as a domain name on the internet because of the Korean registration. The American company brought a domain name transfer lawsuit against the Korean registrant. Although the American complainant was virtually unknown in Korea, it successfully proved to the court that it had a more legitimate right to own the domain name than the registrant.
In conclusion, the former situation, where being the first to register a good domain name would offer a monetary benefit, is now disappearing. The current trend is to ensure that domain names are owned by parties that can demonstrate a legitimate right to the names.
Lee International IP & Law Group
Poongsan Bldg. 23, Chungjeongro
Seodaemun-gu, Seoul 120-013, Korea
Tel: 82 2 2279 3631 / Fax: 82 2 2273 4605