A case of unfair competition may arise if a competitor registers the domain name of a company which it no longer uses. This is the case when the confusion was deliberately maintained by the competitor and if it causes prejudice to the former holder according to the Commercial division of the Cour de cassation on February 2, 2016 (Cass. com., 2 février 2016, n° 14-20.486, « Sté Les Vents du Nord c/ Sté Cuivres et bois »).
A company selling and restoring wind instruments which operated a store under the name, the logo and the trademark “Les Vents du Nord », was the holder of the domain name » lesventsdunord.fr « , a website under construction.
The company Cuivres et Bois, which was in the same business and which operated a nearby store, bought the domain name “lesventsdunord.com » the day after it settled back in the public domain.
Les Vents du Nord served a formal notice to Cuivres et Bois to stop using the sign “Les Vents du Nord » and to transfer the disputed domain name to its name.
The right to a domain name is not expressly recognized by the French Code of Intellectual Property. However, a domain name is a distinctive sign. To maintain this right, it is compulsory to pay a renewal fee to the registry, often via the registrar. The penalty for non-payment is the loss of the right of the sign.
Thus, Article 6.7 of the Naming policy of AFNIC provides that “once deleted, the domain name re-enters back into the public domain and can be registered by a new applicant”.
The effective operation of the “website under construction”
The mere registration of the domain name is not enough for its defense. Effective use is also required. It is then necessary that the website under that name be open and running. Established case law states that the protection of a domain name can only be acquired through its operation. (Cass. com., 13 December 2005, n° 04-10.143, « Locatour »).
Despite this, although the website still bears the words « website under construction » on its landing page and has limited operations, the French Supreme Court deemed, as did the appellate judges, that since the landing page included the company logo, address, telephone number, its schedules and the purpose of its activities and was inserted as a link on other websites, there existed an effective and public operation of the domain name « lesventsdunord.fr « .
Purchase of expired domain name: an obvious abuse of right
Confusion between the two companies is bound to arise in the eyes of the public if a competitor purchases the disputed domain name on the day after it settled back in the public domain Additionally, the Court noted that both companies practiced exactly the same highly specialized activities in nearby locations.
The High Court states that the acquisition of this domain name by Cuivres et bois allowed it to capture the clients of Les Vents du Nord, including through links which automatically redirect the user to the company’s website.
The French Supreme Court concludes that Cuivres et bois committed acts of unfair competition. The situation between the parties has in fact harmed the attractiveness of Les Vents du Nord’s website and led to it being downgraded by search engines. In addition, the reputation of the latter has been affected by the confusion maintained by Cuivres et bois and this decreased the attractiveness of the sign “Vents du Nord.”. The High court approves the Court of Appeal decision to have ordered Cuivres et bois to pay 15, 000 euros in damages, resulting from acts of unfair competition on its part.
There is little case law penalizing an abuse of a non-renewed domain name, which is why this judgment is important. It allows for a clarification of the circumstances under which the registration of a non-renewed domain name may or not be lawful. Furthermore, this judgment clarifies the concept of operation of a domain name, which has been given a wide interpretation in this particular decision.