Case involving "MOODY'S" network domain name unfair competition dispute

Moody's Quality Management Co., Ltd. v. Hangzhou Aiming Internet Co., Ltd.

Docket No.: 7423, second instance (终), civil case (民), (2020) Hangzhou Intermediate People's Court (浙01)

Prefatory Syllabus

The determination of domain name registrants shall be based on the content of publicity and public trust, while the temporary template service in domain name registration shall be comprehensively determined from whether there is an agreement, whether the information of the actual registrant is submitted or updated timely, and whether the personal information is hidden in good faith, etc. Registration service acts that actually hoard and cyber-squat a large number of domain names, and use corporate names interchangeably to confuse the registrant information are acts under the banner of temporary template services but actually malicious cybersquatting behaviors, and should be regulated to purify the current chaos in the domain name registration industry.

The privacy protection service in domain name registration is not contradictory to the existing real-name system of domain name registration, and the target of its protection is limited to the private information of the registrant, whose name is not within the scope of the privacy protection service, nor could it be disguised as a substitute for the real holder of the domain name and generate the so-called "proxy holding of a domain name". Otherwise, the registrant of the domain name recorded with the domain name management agency should bear the corresponding legal responsibility.

Basic Facts

Plaintiff-Appellant: Moody's Quality Management Co., Ltd. ("Moody's")

Defendant-Appellant: Hangzhou Aiming Internet Co., Ltd. ("Aiming") and Hangzhou 22net.Inc. ("22net")

Moody's, a wholly-owned subsidiary of the Moody's Corporation, has rights to the trademark, business name, and prior domain name of "Moody's". 22net and Aiming rushed to register the disputed domain name but did not actually use it and tried to sell it. Moody's thus appealed to the Hangzhou Internet Court, requesting that 22net and Aiming transfer the "moodys.cn" domain name to Moody's for registration and use, jointly and severally compensate Moody's for economic losses of RMB 500,000 and reasonable costs of RMB 208,100.

The Hangzhou Internet Court held that, according to the Whois information, the disputed domain name got registered in 2012 under the then name of 22net at that time, so 22net was the registrant of the disputed domain name. Aiming and 22net used to use the same business name, and had not changed their domain name registration information, website copyright information and other publicized information, but allowed the registrant of the disputed domain name to be in an unclear state. Therefore, they should jointly bear the legal responsibility for the adverse consequences arising from the registration and use of the disputed domain name. The two Defendants had registered and put on public sale the "Moody's" trademark, enterprise name and domain name, which had high awareness, indicating that they did not intend to put them into proper commercial use, but to obtain improper benefits. Therefore, it should be found that the two Defendants had registered and used the disputed domain name in bad faith, and their acts had constituted unfair competition.

The two Defendants asserted that they had only provided temporary template services and that the services were in compliance with the privacy protection policy. The Court held that the privacy protection policy only required that important registration information not be displayed through public channels, which did not conflict with the real name registration of domain names. Also, the name of a registrant was not within the scope of the privacy protection service, and the act of the two defendants, namely, the holding of the domain name in the disguise of privacy did not comply with the law. At the same time, the two Defendants had not submitted the registration agreement of party not involved in this case and the temporary template service agreement, nor had they submitted the real name information of registrant to the domain name management agency for proof, so the available evidence did not prove that they had provided template services for privacy protection. Further, the Defendants, as service providers specializing in domain name registration, had and should have known that the temporary template was for temporary use only and that the actual registrant should be changed within a short period of time. Instead, the disputed domain name had not been changed for as long as 8 years, and the two Defendants had hoarded a large number of domain names for 20 years, with the registrants all shown to be Aiming, so the situation where a holder was holding a large number of domain names with the information related to the domain names unchanged was not consistent with common sense, and lacked justification.

In summary, the court ruled at first instance that the disputed domain name should be registered and used by the Plaintiff, while the two Defendants should compensate the Plaintiff RMB 80,000 as reasonable expenses to defend their rights.

Moody's, 22net and Aiming refused to accept the judgment of the first instance and appealed to Hangzhou Intermediate People's Court. Mediation was reached in the second instance, agreeing that 22net and Aiming would transfer the disputed domain name to Moody's while Moody's would waive its claim for damages and reasonable expenses.

Typical Significance

The profitability of investing in domain names and the loopholes in the industry management have brought various chaos in the domain name registration industry, such as holding a name for another person/entity, cybersquatting and registration without use, and the situation where domain names are transferred after hosting happens frequently, leading to the continuous growth of dispute cases over domain name ownership and unfair competition in judicial practice; The improper application of "temporary template services" and "privacy protection policy" by domain name registration service providers has made domain name registrants "invisible", which, to a certain extent, has contributed to the current chaos in domain names and requires urgent regulation.

By sorting out the common problems in typical cases of domain name ownership and unfair competition disputes, this case has analyzed and investigated challenging issues such as the determination of domain name registrant, the nature of "temporary template", the boundary between domain name real name system and privacy protection, and clarified the corresponding adjudication rules, which have a positive effect on regulating domain name registration services, safeguarding the legitimate rights and interests of domain name right holders, and promoting the establishment of a healthy and sustainable order in the domain name registration industry.