The High Court in Prague by its judgement of 10 August 2004 confirmed in its main points the decision of the Municipal Court in Prague in a dispute concerning the domain name ceskapojistovna.cz. This judgement follows a rather unfortunate (and apparently also incorrect) practice of Czech courts in deciding certain domain disputes.

The substantive law issues, i.e. in what manner the defendants violated the law in dealing with the domain ceskapojistovna.cz, are not particularly interesting in this case and exceed the scope of this article. In brief, the matter concerned the fact that the claimant - Česká pojišťovna a.s. - has an identical stem of its business name (obchodní firma) with the domain name in question and is further the proprietor of several protective trade marks containing the words Česká pojišťovna, and was the proprietor thereof even before the registration of the domain ceskapojistovna.cz by the original holder of the domain name (this original holder is hereinafter also referred to in the article as defendant no. 1). Traditionally, in addition to the actual holder of the domain, CZ.NIC, zájmové sdružení právnických osob (association of legal persons), was also sued. Conversely, what was very interesting in this case, both from a legal and from a practical point of view, was the claimant’s statement of claim and, in connection therewith, the judgements of the courts in both instances.

The High Court in Prague decided as follows: “Defendant no. 1 is obliged to refrain from any disposition of the second-level domain ‘ceskapojistovna’ registered under the top-level domain ‘cz’ and defendant no. 2 (CZ.NIC, zájmové sdružení právnických osob - author’s note) is obliged within three days of the judgement becoming final to carry out a change of registration of the subject holder of the second-level internet domain ‘ceskapojistovna’ under the top-level domain ‘cz’ so that the claimant is registered as the holder of the domain ‘ceskapojistovna.cz’ instead of defendant no. 1”. The first part of the operative part of the judgement is thus merely a prerequisite for the implementation of the second part of the operative part, which orders CZ.NIC to carry out a change of registration of the subject holder of the domain. In other previous judicial decisions of Czech courts (some of which have already been published on Lupa), such a constructed obligation for CZ.NIC is likewise contained. In order to be able to point out what is problematic about such a decision, it is necessary to mention certain following facts.

As is generally known, the registration of domain names in the Czech Republic and abroad proceeds on the principle of “first come, first served”, i.e. on the principle of priority right. As is further generally known, each domain name is unique and may thus be allocated only once. By contrast, however, there may exist on a worldwide scale multiple rights to a designation (and this is often the case in practice) with which this domain name may be in collision. These are various business names (obchodní firmy), protective trade marks, designations of goods and services, etc., which, due to their territorial limitation outside the internet environment, do not come into conflict. No absolute right of any subject can therefore exist to any domain name. No one has a legal claim to any domain name. The existence of a domain name is not provided for by legal regulations (unlike other intangible assets), which would regulate the issue of dealing with a domain name and thus also the question of a potential legal claim to a domain name. If we were to accept that a domain name “belongs” to someone in the absolute sense of the word, we arrive at a situation where we would also have to determine on what basis this domain name belongs to him, i.e. for example on the basis of his business name, his name and surname, on the basis of his protective trade mark, etc. Which is of course a completely absurd situation, because the subject would “carry home” from the registry court, from the maternity hospital or from the Industrial Property Office even the “right to a certain domain name”. It is therefore also not possible to assert that Česká pojišťovna a.s. had an a priori legal claim to the domain name ceskapojistovna.cz, although in this case it can be stated with a great degree of probability that on a worldwide scale no other person can be found who would have a stronger right to this domain name.

The above-mentioned court decision, by which CZ.NIC was ordered to carry out a change of registration of the subject holder of the domain name, is problematic from two perspectives. The first perspective is that no legal regulation provides for a claim to transfer a domain name in favour of the injured party. The statutory claim of the injured party is always limited to a requirement to refrain from specific conduct or to remove the defective state on the part of the tortfeasor (for example cancellation of registration of the domain name). Equally, it cannot be inferred from any legal regulation that the legal position of the injured party in a domain dispute should be improved in relation to other uninjured subjects, e.g. other competitors in economic competition (by a decision on the forced carrying out of a change of registration of the subject holder of a domain, the person of the claimant is legally favoured as against third persons who are not parties to the proceedings). From a legal theoretical point of view, the court’s construction regarding the creation of a contractual relationship between the claimant and CZ.NIC by judgement is certainly also disputable.

The second problematic perspective has more serious impacts also for third persons not participating in the dispute. As already stated above, by registration, holding and use of a domain name, the rights of various subjects may be violated (interference with a business name, interference with rights arising from a protective trade mark, unfair competition, etc.). This interference with some right, however, naturally does not constitute a legal claim of the injured party to this domain name. In a case where the court by decision imposes an obligation to carry out a change of registration of the subject holder of a domain (as in the case of the domain name ceskapojistovna.cz or tina.cz), it practically “creates” a legal claim of the injured party to this domain name. A final judgement which imposes an obligation to carry out a change of registration in favour of a certain subject implicitly (in some cases also explicitly) contains a decision on who is the “entitled” and thus also sole holder of a certain domain name. In court proceedings, naturally, only a right to which a party to the proceedings has a legal claim can be awarded. All other subjects, even in the case of a stronger right to this domain name, cannot achieve cancellation of the previous final judgement regarding “entitled” holding of the domain name (they are not parties to the proceedings at all). In the event that this subject with a potentially stronger right sought judicial protection, the question arises in what manner it could be granted to him, because the original injured party (i.e. the original claimant) was “awarded” the claim to the domain name by a final judgement.

Hypothetical example: Company OPQ, a.s. has been providing goods under the mark OPQ on the territory of the Czech Republic since 1996. The mark becomes generally known. In 2000, speculator J.D. registers the domain name opq.cz with the intention of later offering it to company OPQ, a.s. “for purchase”. Company OPQ, a.s. files a claim with the court in which it proposes that the registrar be imposed with an obligation to carry out a change of registration of the domain name opq.cz in its favour. The court by final judgement in 2003 grants this statement of claim. In 2004, multinational company OPQ Corporation, which has had an international protective trade mark registered since 1993 within the meaning of the Madrid Agreement, decides to start doing business on the territory of the Czech Republic. It apparently cannot, however, achieve cancellation of registration of the domain name in favour of OPQ, a.s., because “entitled” use of the domain name was awarded to OPQ, a.s. by a final judgement. A “stronger” right than a right awarded by a judicial decision can practically be imagined only with difficulty.

The practical side of a decision with compulsory transfer of a domain name to the successful claimant is evident in our conditions, in the event that the court imposed on the defendants only an obligation to cancel the defendant’s registration, anyone could register this domain name at the moment of its release, for example the defendant again. For these reasons, therefore, the court directly orders the transfer of the domain name, thereby substituting for deficiencies on the part of CZ.NIC, which has not established any procedure for the case where the court decided on an obligation to cancel the registration of a certain domain name (imposing an obligation to cancel registration of a domain name can be considered a legitimate means of removing the defective state). According to foreign models, one can imagine, for example, the establishment of a certain protection period in favour of the subject who was successful in court or arbitration proceedings. During this period, only this person could register the domain name. This method with a protection period may at first glance appear practically the same as carrying out a change of registration according to a court decision, however, it does not cause the above-mentioned negative effect of constituting a “legal claim” to a certain domain name in favour of the claimant.

Further potential problems connected with forced transfer of a domain name in favour of a certain subject by court decision could theoretically arise, for example, upon “release” of the awarded domain name (due to non-payment of the fee). Would such a domain name really be free? Is it possible to register it when the “entitled user” is finally someone else?

In conclusion, it can be stated that the High Court in Prague in the case of the domain name ceskapojistovna.cz decided apparently “justly”, however, by this decision it continued in the incorrect and apparently also unlawful practice of Czech courts in deciding certain domain disputes. It must be noted that at present this is admittedly rather a theoretical problem, which, however, with the growing number of such judgements in domain disputes, may begin to cause considerable difficulties in everyday practice.

This text was translated from Czech to English using an AI translator.