Domain name dispute – What should businesses do?

E-commerce and digital transformation playing an increasingly important role in business activities, domain names are no longer just an access address on the Internet, but have become valuable commercial assets, associated with the brand, reputation and presence of businesses in the digital environment. However, along with this increasing role is the risk of arising legal disputes related to domain names – a type of dispute that is developing more and more complex and diverse in practice.

With experience in practicing and providing legal support in many domain name dispute cases in Vietnam, we find that businesses often encounter misunderstandings or shortcomings in building a domain name protection strategy. The following article aims to provide a comprehensive and practical view, and provide appropriate legal recommendations for businesses to proactively protect their rights in this sensitive and important field.

1. Domain name and trademark – Two different legal concepts

One of the most common misconceptions today is the identification between domain names and trademarks. Many businesses believe that successfully registering a domain name (e.g., www.abc.vn) means that they own the exclusive rights to that name in all legal aspects, including from the perspective of intellectual property. In fact, this is not the case at all.

According to the provisions of Vietnam's Intellectual Property Law, a domain name is not an independently protected object like a trademark. A domain name, in essence, is just an identifier on the Internet, managed by technical organizations (such as VNNIC for .vn domain names or ICANN for international domain names). Meanwhile, a trademark is an intellectual property right that is protected by a competent State agency, capable of being protected by a strong legal mechanism, including administrative, civil and criminal measures.

This difference is the cause of many dispute situations in practice, when a party (usually another individual or organization) has registered a domain name that is identical or similar to the trademark of the enterprise, but the enterprise cannot immediately reclaim that domain name.  unless it can be proven that the act of appropriation is illegal.

2. Common forms of domain name disputes

Domain name disputes often arise in the following cases:

1. An individual or organization pre-registers a domain name that is identical or similar to the trademark of a business, for the purpose of reserving a place, reselling it at a high price or causing confusion to consumers[1].
2. The enterprise signs a brand development contract with a partner, in which the partner registers the domain name. When the partnership ends, the partner does not agree to return the domain name.
3. The former employee or information technology service provider registered the domain name on behalf of the business but then occupied, changed the registration information, and refused to hand over control.
4. Cases of unfair competition, in which competitors use similar domain names to lead consumers to their websites or compromise brand reputation.
5. The domain name expires, is not renewed at the right time, and is re-registered by a third party for unauthorized exploitation.

Each of the aforementioned forms of disputes requires a different legal approach and cannot be applied in a one-size-fits-all manner.

The domain name Viettel.com was listed for sale at a multi-million-dollar price. Source: Viettel

3. Current legal mechanisms for resolving domain name disputes

Currently, enterprises can choose one of the following mechanisms to settle domain name disputes, depending on the nature and specific characteristics of the case:

1. Negotiation/mediation: This is a recommended method due to the time and cost savings. However, the level of effectiveness depends entirely on the goodwill of the party who owns the domain name. In fact, there are many cases where businesses are forced to pay a large amount of money to "buy" domain names, although the law does not encourage the act of buying and selling domain names illegally.
2. Initiating a lawsuit in a Vietnamese Court: It is an official and coercive mechanism. However, the processing time is long and the result often depends a lot on whether the business can prove the trademark priority or not. In addition, requesting the Court to compel the defendant to transfer the domain name is not always approved, especially if the defendant has been using the domain name for lawful purposes for a long time.
3. UDRP (Uniform Domain Name Dispute Resolution Policy): An  international domain name dispute resolution mechanism applicable to .com, .net, .org domain names,... managed by ICANN. Businesses can submit applications to the WIPO Arbitration Center, which has fast, specialized processing procedures and binding rulings on domain name providers. The conditions for a successful complaint usually include: (i) The domain name is confusing with the trademark owned by the business; (ii) the Respondent has no legitimate interest in the domain name; and (iii) the domain name is registered and used in bad faith.

4. What do businesses need to prepare to protect domain names?

A comprehensive domain name protection strategy does not stop at early domain name registration, but also includes a series of legal and technical measures to ensure effective control, use, and protection of domain names. We recommend that businesses pay attention to the following issues:

Firstly, register a trademark as soon as possible

This is the key legal basis for initiating any legal action related to the domain name. A trademark granted a protection title in Vietnam or under the Madrid Protocol will be the basis for businesses to assert their legal priority over the name associated with the disputed domain name.

Second, security and absolute control of domain name information

Many businesses assign personnel or information technology service providers to name domain names but cannot control the owner's information on the registration system. This can lead to the risk of appropriation or not being able to handle it in time when the employee leaves the job or the partner has a dispute. Ideally, the domain name needs to be registered under the legal name of the business and use a two-layered secure admin email.

Third, register domain names with wide coverage

Businesses should register both national domain names (.vn) and international domain names (.com, .net, .asia...), as well as confusing variants, to avoid being taken over by competitors or third parties. This "coverage" is not only a risk prevention of disputes but also an effective brand strategy.

Fourth, establish an early warning and monitoring process

Tracking newly registered domain names similar to your trademark or trade name can help businesses detect violations early, thereby proactively complaining or taking timely preventive measures.

In conclusion, domain name disputes are no longer a rare issue, but have become a real legal risk for any business that has an online presence or owns a valuable brand. In the context of the increasingly developed digital environment and fierce competition, proactively building a legal strategy to protect domain names is an inevitable requirement that cannot be taken lightly.

We recommend that, rather than just reacting when a dispute occurs, businesses should have an early prevention plan, a close combination of trademark registration, domain name information control, and the use of appropriate legal services to ensure that their interests are comprehensively protected.