Court Cases Regarding the Cancellation or Transfer of Domain Names

Domains are extremely important for businesses. If someone else acquires the domain of your company name or product name, it can lead to troublesome situations. However, you can counter this by requesting the cancellation or transfer of the domain name. We explain the structure and flow of these lawsuits in another article on our site, but what kind of domains have been involved in past lawsuits, and what kind of legal judgments have been made in those cases? We will explain the criteria for judgments in lawsuits over domain transfer requests while looking at actual court rulings.

goo is a portal site operated by the NTT Group. There was a legal dispute over the registration and transfer of the domain name for goo. Popcorn Co., Ltd. obtained the registration of the domain name ‘goo.co.jp’ from JPNIC (Japan Network Information Center) in August 1996. In response, NTT-X (later NTT Resonant) obtained the registration of the domain name ‘goo.ne.jp’ in the same way in February 1997.

NTT-X was operating an information search site using the domain name ‘goo.ne.jp’, but they claimed that Popcorn Co., Ltd.’s use of the domain name ‘goo.co.jp’ was causing confusion about the source, and that selecting ‘goo.co.jp’ automatically redirected to an adult site. Based on these grounds, in November 2000, they filed a petition with the Industrial Property Rights Arbitration Center (now renamed the ‘Japanese Intellectual Property Arbitration Center’) requesting the transfer of Popcorn Co., Ltd.’s domain name ‘goo.co.jp’ to NTT-X.

In response, the Center accepted NTT-X’s petition in February 2001 and ordered Popcorn Co., Ltd. to transfer the domain name ‘goo.co.jp’ to NTT-X. Dissatisfied with this, Popcorn Co., Ltd. filed a lawsuit with the Tokyo District Court seeking confirmation of their right to use the domain name ‘goo.co.jp’.

Requirements for Domain Name Transfer Requests

In this case, the issue was whether the following requirements, which are necessary for requesting a domain name transfer as stipulated by the JP-DRP (Japanese Domain Name Dispute Resolution Policy) established by JPNIC, were met.

1. The registrant’s domain name is identical or similar enough to cause confusion with the trademark or other indications in which the petitioner has rights or legitimate interests.
2. The registrant does not have any rights or legitimate interests in the registration of the said domain name.
3. The registrant’s domain name is being registered or used for fraudulent purposes.

Does NTT-X Have Rights or Legitimate Interests?

Firstly, the question arises whether NTT-X has rights or legitimate interests under Requirement 1. From April to September 2000 alone, NTT-X invested approximately 520 million yen in advertising costs, conducting TV commercials, newspaper advertisements, magazine advertisements, banner advertisements, and hosting events. It was featured in numerous newspapers, magazines, web page articles, email newsletters, and was covered multiple times on TV programs. Furthermore, according to the “Japan Access Rating” survey, an indicator of site access rates on the Internet announced by Japan Research Center, Ltd., the defendant’s site consistently ranked high. The actual number of page views per day on the defendant’s site exceeded 1 million in the five months since the service started, reaching 14.5 million by July 2000 (Heisei 12).

In addition, the business income that the NTT Group earned from the goo-related business was approximately 1.16 billion yen in 1999 and approximately 950 million yen in the first half of 2000. Since goo provides major services such as search services for free, the majority of the above income would be from advertising revenue on the site. Based on these facts, it was recognized that NTT-X has rights or legitimate interests in the goo domain name.

Similarity of Domain Names

Popcorn Inc. argued that a domain name, including the top-level domain and second-level domain, represents the ‘address’ and ‘name’ of the information provider on the internet. They claimed that if the second-level domain is different, it represents a completely different ‘address’ and ‘name’, thus it is a completely different domain name.

In response, the court acknowledged that a different second-level domain indeed represents a different domain name. However, Popcorn Inc.’s domain name consists of the ‘jp’ part, which is the country code forming the top-level domain, the ‘co’ part, which is the type of organization code forming the second-level domain, and the ‘goo’ part, which is the code indicating the entity (host) using the domain name. The ‘co.jp’ part merely indicates that Popcorn Inc.’s domain name is managed by JPNIC (Japanese Network Information Center) and that the registrant is a company. It is common to many domain names. The court stated that the ‘goo’ part primarily identifies Popcorn Inc.’s domain name, and therefore, the essential part of Popcorn Inc.’s domain name is ‘goo’, also known as ‘Goo’.

On the other hand, NTT-X’s Trademark 1 is written in capital letters as ‘GOO’, with ‘Goo’ written in Katakana underneath. Trademark 2 is a stylized version of ‘goo’ written in lowercase letters. Both of NTT-X’s trademarks are referred to as ‘Goo’.

Taking these facts into account, along with the prominence of NTT-X’s site, the court ruled that Popcorn Inc.’s domain name is similar enough to NTT-X’s trademarks, displays, and domain names to cause confusion. The court stated that the requirement of similarity should be judged objectively, regardless of the order of registration or subjective perception.

Domain Name Registration Rights and Legitimate Interests

The domain name “goo.co.jp” was originally registered by Popcorn Co., a company primarily engaged in the karaoke business, for the purpose of attracting karaoke customers. They established it as a community site targeting high school girls. The court has acknowledged that the domain was not registered with any fraudulent intent.

However, the site had few visitors, and the number of adult men interested in high school girls far exceeded the number of high school girls visiting the site, which did not lead to an increase in the karaoke shop’s sales. Therefore, Popcorn Co. decided to maintain the content of the original site targeting high school girls, but with the aim of attracting adult male visitors, they began to display banner ads on adult sites. Eventually, in order to gain larger profits, they modified the site to automatically redirect to other adult sites, making it impossible to view the high school girls’ community site, and started to receive profit distribution based on the number of accesses.

The court pointed out that there was no evidence sufficient to acknowledge that Popcorn Co. was recognized under the name “goo.co.jp” or “goo”. The company’s advertisements did not display the trade name of Popcorn Co., but only showed the name of the agency as “GOO! Support and Contact”. In addition, there were no facts such as advertising that linked the site or the domain name in question with Popcorn Co. Therefore, the court concluded that it could not be said that Popcorn Co. was generally recognized under the name “goo.co.jp” or “goo”, and that there were no circumstances sufficient to acknowledge that Popcorn Co. had any rights or legitimate interests in “goo.co.jp”.

Whether it is Registered or Used for Fraudulent Purposes

The court ruled that Popcorn Inc. had significantly changed the way it used ‘goo.co.jp’, which it had been using continuously before goo became famous. After goo became famous, Popcorn Inc. used ‘goo.co.jp’ solely for redirection purposes, receiving profit distribution based on the number of accesses from the company operating the adult site to which it redirected. This was equivalent to setting up a separate site with the same domain name.

Furthermore, when ‘goo.co.jp’ stopped automatic redirection and explicitly linked to the adult site, the number of people who accessed the redirected site by following the link from ‘goo.co.jp’ was only a few dozen per day. In contrast, the number of accesses to ‘goo.co.jp’ was 33,400 per day. Therefore, it was not recognized that many people accessed ‘goo.co.jp’ for adult content. It was inferred that most of the people who accessed ‘goo.co.jp’ either confused it with ‘goo.ne.jp’ or made a typing error. As a result, Popcorn Inc. was profiting commercially by taking advantage of users’ mistakes.

“The plaintiff argues that they have been using the domain name in question before the defendant’s site became famous, and that the defendant, knowing the existence of the domain name in question, obtained the defendant’s domain name and caused the possibility of confusion. However, just because the plaintiff used the domain name first and the defendant knew about the domain name does not mean that the plaintiff’s use of the domain name is protected. Even if someone used the domain name first, if it was used for fraudulent purposes, it is clear from the dispute resolution policy that the use of the domain name may not be protected. Therefore, it is recognized that the plaintiff had a fraudulent purpose.” – Tokyo District Court, April 26, 2002 (Gregorian calendar year)

Tokyo District Court, April 26, 2002 (Gregorian calendar year)

The court recognized that the domain name was being used for fraudulent purposes and dismissed Popcorn Inc.’s claim.

Popcorn Inc. appealed this decision, but the Tokyo High Court dismissed the appeal and confirmed the first-instance judgment ordering the transfer of the domain name ‘goo.co.jp’ to NTT-X (Tokyo High Court, October 17, 2002 (Gregorian calendar year)). This was the first high court level judgment on the application of the dispute resolution policy regarding domain name transfers.

Summary

There are two routes for domain name cancellation or transfer requests. This case was subject to dispute resolution by the JPNIC’s accredited dispute resolution organization. However, in cases where a request for prohibition of use of a domain name based on the Japanese Unfair Competition Prevention Act is made, the judgment is made on almost the same requirements. In either case, the party being asked for a transfer or cancellation will claim a prior right, but this alone does not allow them to claim the right to own the domain name.

Related article: What is the mechanism of dispute resolution for domain transfer requests?[ja]