ADR Center for .eu attached to the Arbitration Court attached to the Economic Chamber of the Czech Republic and Agricultural Chamber of the Czech Republic (Czech Arbitration Court)
Panel Decision
§ B12 of the .eu Dispute Resolution Rules (ADR Rules)
Case No.: 02726 Time of Filing: 2006-08-25 09:00:35 Administrative Contact: Tereza Bartošková Complainant Name: FAUSTO LIMITED, ADR Manager Complainant's Authorized Representative Name: Respondent Name: EURid Respondent's Authorized Representative Name: Domain Name(s): ANIMEBABE, ASIANGIRLS, GAYDATING, TEENPIC, TEENPORN Disputed decision(s) of EURid: Decision to place domain names on hold, blocked or suspended status on or about July 19, 2004 Date(s) of disputed decision(s): 2006-07-19 Other Legal Proceedings English summary of the decision: English summary of this Decision is hereby attached as Annex 1 Factual Background
The Complainant is FAUSTO LIMITED and the contested domain names are the following: animebabe.eu, asiangirls.eu, gaydating.eu, teenpic.eu, teenporn.eu.
The Complainant challenges EURID’s decision the abovementioned domain names on hold and requests the following:
1. That the Panel require EURid to produce and provide to Complainant copies of all documents and other items used, referred to or relied upon in connection with EURid’s decision. This information should include the following:
(a) documents received by EURid from, or communicated to EURid by, any person in connection with the Domain Names or its registration; and
(b) documents which were used, referred to or relied upon in connection with EURid’s decision, including documents generated or reviewed by or on behalf of EURid (whether internal records of EURid or records held by any person or entity providing services to or on behalf of EURid);
2. That Complainant be given the opportunity to provide a Rejoinder to any Response by EURid. A rejoinder is justified for the reason that Complainant remains uncertain as to the basis of EURid’s decision and Complainant has been precluded from viewing the documentation providing the basis for EURid’s suspension of the Domain Names; and
3. That EURid's decision to place the Domain Names on hold be annulled.
The Complaint was filed on 8 August 2006 in English, which is the official language of the proceedings. The Response was filed 19 October 2006 within the given deadline. On 20 October 2006, the Provider appointed a three member panel and on the same day the Provider received their Statements of Acceptance and Declarations of Impartiality and Independence. Finally, on 24 October 2006, the case file was transmitted to the ADR Panel.Parties’ Contentions
The Domain Names were validly registered by Complainant on during the public
“Land Rush” period using the registrar services of the registrar(s) identified in the online portion of this complaint
Complainant is not a registrar and is a separate legal entity from the Domain Registrar used in connection with the registration of any of the respective Domain Names. In registering the Domain Names, Complainant utilized the services of the respective Domain Registrar in accordance with the applicable Regulations and with EURid’s .eu Domain Names Registration Terms and Conditions (“T&C”) and EURid’s .eu Domain Names Registration Policy (“Policy”).
Following registration, each of the Domain Names was placed into active use in connection with Complainant’s business and with an active website to offer goods and/or services.
Complainant is in the “Direct Navigation” business. Direct Navigation is a recognized search method used by approximately 15% of Internet users wherein a constructed search phrase is entered in the form of a domain name in the browser rather than in a search engine such as Google. When a user enters a domain that is used in Direct Navigation, the domain name is parsed by a third party entity (in this case Sedo.com). In the parsing process, the search company’s software separates the domain name into logical words. Using the logical words, the service provider then performs a specialized search of the directories of either Google or Yahoo (by contract). The resulting information is automatically generated by the service provider in the form of a webpage. The contents of the webpage is comprised of links or other information related to companies and others offering goods, services and information most directly related to the contextual meaning of the word(s) used to form the domain name. In effect, the domains are used in the same manner as “key word” search terms and thus constitute a legitimate service for the benefit of both the Internet user and those wishing to be listed on the resulting web pages associated with the domain name.
Complainant did not register any of the Domain Names for the purpose of resale and has no intention of offering any of the Domain Names for sale. In fact, Complainant has never sold a .eu (or other) domain name and has rejected any request it has received relative to the sale of any domain name held by Complainant.
The Domain Names are not defamatory, racist or otherwise contrary to public policy and to the knowledge of Complainant no court of any Member State has issued a valid court order holding to the contrary.
While Complainant may have numerous .eu domain names, the registration of multiple .eu domain names is are expressly permitted by the Regulations. “An eligible party, as listed in Article 4(2)(b) of Regulation (EC) No 733/2002, may register one or more domain names under .eu TLD.”(EC 874/2004 Article 2).”
Subject only to the foregoing Regulation, there is no limitation on the number of domain names that any one registrant can register.
On or about July 20, 2006, as a result of checking the WHOIS for its Domain Names (at http://www.whois.eu), Complainant became aware that each of the Domain Names was on “hold”. Prior to making this discovery on its own, Complainant had not received any form of communication from EURid regarding any of the Domain Names, or its registration or use by Complainant.
On or about July 20, 2006, Complainant received an email message from EURid a copy of which is provided as Exhibit “3” (“EURid Email”). The email was addressed to the Complainant and states the following:
“Dear Sir,
We wish to inform you that we are currently investigating the circumstances of the registration of your domain names and that we have blocked these names for the time being.”
Best regards,
Herman Sobrie
Legal Manager
EURid VZW “
Other than this single email, Complainant has received no communication from EURid or its representatives relative to any of the Domain Names or indicating that there were any problems associated with their registration or use by Complainant.
To Complainant’s knowledge, as of the date of this Complaint, EURid has not initiated any ADR proceeding or other legal proceeding against Complainant or any of the Domain Names.
After receipt of the EURid Email, Complainant became aware that on or about July 24, 2006, EURid posted a “press release” on its website stating that it had “suspended” 74,000 domain names registered by an unnamed group of 400 registrars.
EURid has made repeated and conflicting references to its decision relative to the Domain Names. In the Eurid Email, it references the Domain Names as “blocked”. The WHOIS database refers to the Domain Names as being “on hold”. In the press release EURid refers to 74,000 domain names as “suspended” and further references its intent to revoke and reissue them to the general public.
Complainant is uncertain if the comments of the press release apply to its Domain Names or are related to EURid’s decision to block or suspend its Domain Names. If EURid’s decision relative to Complainant’s Domain Names is related to the subject of the press release, then it is clear that EURid’s decision is not limited to merely “blocking” or placing a “hold” on the Domain Names. In its press release EURid states its intention to revoke any and all domain registrations associated with the unnamed registrars and to make them available to the general public. As noted above,
Complainant has received no communications from EURid other than the EURid Email and to the best knowledge of Complainant it has neither been named as a defendant nor served with any legal proceedings that may have been initiated by EURid relative to the alleged “400 registrars”.
EURid’s decision to place the domain names on hold impinges Complainant’s legal rights as to the Domain Names, including its right of enjoyment and use. For example the current status precludes any changes to the WHOIS information associated with the Domain Names, including the DNS settings which are required to direct the Domain Names to the appropriate website. In addition, Complainant is prohibited from transferring any right, title or interest in the Domain Names or their registration.
The prohibition of a right to transfer is important even though Complainant has no intention or desire to sell any of the Domain Names. Complainant absolutely seeks to avoid the registration of domain names in respect of which third parties may have conflicting prior rights. This policy is referenced on Complainant’s websites.
Pursuant to this policy, the Complainant welcomes inquiries by others claiming that a domain name infringes prior rights. Upon submission of sufficient documentation establishing such prior rights, the domain name is transferred to the third party without cost or other requirement. The policy is generally interpreted liberally in favour of the third party claim and typically the decision is made to transfer the domain name even if defences to the third party claims may exist. The prohibition on transfer absolutely precludes Complainant from complying with its stated policy (not to mention any potential legal obligations) and exposes Complainant to legal claims and liability as a result of its being unable to transfer the domain names in this regard.
It is submitted that the decision of the Registry to place the Domain Names on hold was, and remains, in conflict with the Regulations as set forth below.
ARGUMENTS
A. COMPLAINANT IS ENTITLED TO COMMENCE THIS ADR PROCEEDING AND EURID’S PARTICIPATION IN THIS ADR PROCEEDING IS COMPULSORY.
EURid has undertaken a decision to place the Domain Names in a “suspended” “blocked” or “on hold” mode and declared EURid’s intention to revoke the Domain Names, terminate Complainant’s rights therein and make the Domain Names generally available for public reservation by third parties. This adversely impacts the Complainant’s rights in the Domain Names in a material manner and conflicts with not only the Regulations but also with EURid’s own .eu Domain Name Registration Terms and Conditions (“T&C”) and its .eu Domain Name Registration Policy (“Policy”).
B. COMPLAINANT PROPERLY REGISTERED THE DOMAIN NAME.
Article 4(2)(b) of Regulation (EC) No. 733/2002 sets forth the basic criteria for
domain name registration.
Here, the Domain Registrar was an accredited .eu registrar as evidenced by EURid’s website. The Complainant is a corporation duly formed and existing under the laws of Cyprus. Cyprus is a Member State. Complainant’s applications for registration of the Domain Names were properly submitted to EURid by the Domain Registrar during the public “Land Rush” period.
The applications were each accepted by EURid and all applicable fees have been paid. The WHOIS information is true and complete in accordance with the Regulations (including EC 487/2004, Article 16), and Complainant is otherwise in compliance with the eligibility and other requirements imposed on domain name holders pursuant to the Regulations, including EC 874/2004, Article 3 and is further in compliance with both the T&C and Policy.
C. EURid’S DECISION TO BLOCK THE DOMAIN NAME WAS ARBITRARY, UNDERTAKEN WITHOUT NOTICE, AND VIOLATES THE REGULATIONS.
The prohibition of arbitrary acts and the requirement for notice and due process prior to undertaking any decision adversely impacting the rights of a registrant forms an integral part of the public policy underlying the Regulations. “Domain names should not be revoked arbitrarily.” (EC 733/2002, Preamble § 17). “Domain names should be open to revocation by the Registry on a limited number of specified grounds, after giving the domain name holder concerned an opportunity to take appropriate measures.” (EC 874/2004, Preamble §. 15). These compelling statements of public policy are repeated in the underlying regulations.
Once a domain name is registered it becomes unavailable for further registration until the registration expires without renewal, or until the domain name is revoked. (EC 874/2004, Art 2). A registrant obtains a “transferable, renewable, exclusive right to use the Domain Names…” (T&C §10). Among the rights enjoyed is an effective first right to renew the domain to the exclusion of others. (EC 874/2004, Art 2)
With reference to its decision as to the Domain Names, EURid has interchangeably used terms such as “blocked”, “on hold” and “suspended pending revocation”. This has led to Complainant’s confusion as to the exact status of the Domain Names and the exact nature of EURid’s decision. As a result of this confusion, and EURid’s repeated and conflicting references, Complainant is compelled to deal with each of the various “claims” published by EURid.
The Regulations grant very limited powers to EURid in connection with usurping registration rights of a registrant.
1. EURid’s Decision to “Block” the domain name is invalid.
A domain name may be “blocked” by EURid only (1) following receipt of a valid order of a Member State court pursuant to EC 874/2004, Art. 188, or (2) following notice that an ADR is pending as against any of the Domain Names. (EC 874/2004 Art 18; T&C §9(3)). Complainant is unaware of any court order declaring any of the Domain Names to be defamatory, racist or contrary to public policy. Complainant has received no notice that an ADR has been filed by EURid or anyone else relative to any of the Domain Names. In the absence of any of the two specified grounds for blocking” a domain, EURid’s decision is arbitrary, has been undertaken without authority, and any decision to “block” the domain should be invalidated.
For avoidance of doubt, EURid has not initiated any ADR relative to Complainant or any of the Domain Names. Further, to the extent that EURid has filed a legal action, judging from the press release, such action is limited to one as against the 400 registrars. Such an action has no bearing on Complainant or the Domain Names and cannot form the basis for a “blocked” status as to the Domain Names pursuant to the Regulations or T&C §9(3).
Further, a “block” following the initiation of an ADR is logically intended to “secure” the domain name so that it is not transferred to a third party resulting in the ADR decision being rendered moot. This particular action does not justify a hold inasmuch as the Complaint is directed at EURid’s decision and there is no logical reason to require that the domain name be “secured” during the pendency of this proceeding.
Thus, EURid’s decision cannot be seen as “moot” merely because Complainant has filed this action; to hold otherwise would leave the Complainant without a remedy in this case. For the avoidance of doubt, Complainant requests that no “block” request be issued by the ADR provider in this case.
2. There is no authority for a “Hold” Status.
Similarly, there is no authority permitting EURid to place the Domain Names on “hold”. A hold status may be initiated by EURid only following the initiation of an
ADR proceeding.
The ADR process described in EC 874/2004, Art 21 provides the only instance in which the Regulations authorize EURid to place a domain name on hold. Article 21 allows a “hold” status to be imposed after the filing of an ADR. Other than this complaint, Complainant is not aware of any ADR relative to any of the Domain Names. As is the case with a “block”, the hold status referenced in the Regulations is logically intended to “secure” the domain name so that it is not transferred to a third party resulting in the ADR decision being rendered moot. This particular action does not justify a hold inasmuch as the Complaint is directed at EURid’s decision and there is no logical reason to require that the domain name be “secured” during the pendency of this proceeding.
Article 21 cannot form a basis for EURid’s conduct and any “hold” status is improper.
3. EURid’s “suspending” the Domain Names Violates both the Regulations and EURid’s Own Terms & Conditions and Policies.
The Regulations provide only two (2) instances in which a domain name may be suspended. First, a domain name may be suspended for 40 days following the death of an individual registrant or the bankruptcy or other cessation of a non-individual registrant. (EC 874/2007, Art. 19). Second, a domain name may be suspended during the pendency of an ADR pertaining to the domain name EC 874/2004, Art 22). Neither situation is present in this case. The Complainant is alive and well.
The term “suspension” is also referenced in T&C, §9(1) and Policy §11. Section 9 confirms that suspension occurs only (1) in the event EURid receives a cancellation request from a registrar following a registrant’s notice to the registrar cancelling the domain name registration, or (2) EURid has previously requested the registrant to replace its then current registrar pursuant to Section 10(1) of the Policy13 following termination of the registrar contract between EURid and the then current registrar. A domain name that is properly “suspended” may not be transferred or used and no change to the WHOIS data is permitted absent a decision taken by (a) an ADR panel, or (2) a court of a Member State. A suspended domain name may be re-activated only upon the request of a new replacement registrar, provided that if no reactivation request is received within 40 days, the domain name will become generally available for registration by third parties T&C §9(2).
In this case, Complainant remains current with any charges or obligations of the Domain Registrar and no request for cancellation has been issued to EURid by Complainant or the Domain Registrar. To Complainant’s knowledge EURid has not terminated its contract with the Domain Registrar and in any event EURid has not issued any notice to Complainant as required by Policy, §10(1).
3 Any Decision to Revoke the Domain Names is Improper.
Absent a decision by an ADR panel or valid court order, EURid may undertake to revoke a domain name only in compliance with EC 874/2004, Art.20.
The logical reading of Article 20 is that in absence of one of the three (3) stated reasons, a domain name may be revoked only following EURid’s participation in ADR proceeding. (EC 874/2004 Art. 21, ¶3). Any other reading would conflict with the other relevant provisions of the Regulations. Because EURid has not initiated an ADR (or any other proceeding) relative to the Complainant or any of the Domain Names, it has acted without authority and in violation of the Regulations.
Here, none of the grounds enumerated in the above authorities are present. Nor has EURid provided Complainant with any notice of any asserted deficiency or any opportunity to cure.
EURid may argue that it has not “revoked” the Domain Names but rather merely “blocked” it, placed it “on hold”, or “suspended it in anticipation of revocation”. However, such a position neither excuses EURid’s actions relative to the Domain Names nor lessens its violations of the Regulations involved. EURid cannot be permitted to act unilaterally in contravention to the environment of protections put forth in the Regulations.
There is little difference seen between placing a domain name in the status of “blocked” “on hold” or “suspended pending revocation” and outright initiating revocation proceedings. This is particularly the case when the “suspension” is initiated unilaterally, without notice or an opportunity to respond and with the express intention of revoking the domain names – all without initiating any legal proceeding. To allow such conduct would give EURid the right to act as it pleased with regards to any domain name with impunity.
EURid has only limited power to revoke domain names. It follows that EURid’s power to interfere with the fundamental rights of a registrant (whether by blocking or holding or suspending the domain name) with the goal of revoking it should be similarly limited. While revocation removes the registration to the domain name, a “blocked”, “hold” or “suspended pending revocation” status imposes a substantially similar loss of the fundamental rights of use and enjoyment and leads in any event to eventual revocation. As such, the protections afforded by the Regulations relative to revocation should apply equally as to EURid’s decisions to block, hold or suspend a domain name. The essential policies relative to notice, due process and opportunity to cure should apply on the basis of the realistic effect of EURid’s decision and not solely upon the chosen label provided to the action.
As evidenced by the press release1, EURid’s express intention is to revoke the 74,000 domain names referenced therein and re-issue them to the public. Assuming the Domain Names are included in the 74,000 domain names referenced in the press release such an action would deprive Complainant of any right, title or interest in the Domain Names. Even if EURid has undertaken its decision to “block”, “hold” or “suspend pending revocation” the Domain Names in connection with its investigation or proceedings as against the registrars, such a purpose does not relieve EURid from its obligation to comply with the Regulations.
EURid has utterly failed to communicate with the Complainant relative to its decision. Aside from the single EURid Email, it has failed to advise Complainant regarding any asserted wrong doing or other problem associated with any of the Domain Names. To the best knowledge of Complainant it is not the subject of any legal or other proceedings involving EURid other than this Complaint18. As a result, Complainant is essentially left to guess as to the basis for EURid’s decision. Placing a registrant in such a position should alone be seen as a contravention of both the Regulations and basic concepts of due process and judicial fairness that are prevalent in the European Community.
The presence of the press release and the timing of the “suspended” or “hold” status relative to the Domain Names all indicate that EURid’s unilateral action was taken as a prelude to revoking the Domain Names. In the absence of prior notice or ADR proceeding, such a decision violates the applicable Regulations and must be annulled.
D. EURID’S ACTION AGAINST THE 400 REGISTRARS CANNOT JUSTIFY EURID’S DECISION VIS-À-VIS THE DOMAIN NAMES.
As noted, the Regulations provide EURid with very limited authority to interfere with a registrant’s rights in a domain name. If the limited grounds set forth in EC 874/2004, Art. 20 are not present EURid may act only pursuant to an ADR panel decision or an appropriate valid court order of a Member State.
A reading of the press release indicates that EURid has initiated a legal proceeding against 400 registrars for breach of the contract that exists as between EURid and each of the registrars. Such an action cannot form the basis for “blocking, “holding” or “suspending” the Domain Names. Complainant is not a party to any registrar agreement and is not a EURid registrar. Complainant is a separate and distinct legal entity from any EURid accredited registrar. Nor is Complainant a party to any such proceeding; it has not to its knowledge been named as a defendant and has not received service of any complaint.
Even if Complainant were (which it is not) a completely controlled subsidiary of a registrant, such would not invalidate the registrations for the Domain Names. EURID has on numerous occasions expressly consented to the use of controlled groups and even the use of a parent/subsidiary relationship as between registrar and registrant.
Complainant properly submitted its order to register the Domain Names to its Domain Registrar – both separate legal entities. Complainant has confirmed with the Domain Registrar that it submitted the Complainant’s order as received. Neither Complainant nor the Domain Registrar usurped any rights or preference otherwise available to any other registrant using the registrar’s services. Although not grounds for interfering with Complainant’s rights in the Domain Names, Complainant has repeatedly confirmed that it did not register any .eu domain names with the intention to sell them and has never in fact sold a domain name (let alone a .eu domain name).
The Respondent was of the opinion that those judicial proceedings, although not initiated against the registrants but against the registrars, entitled it to block the Blocked Domain Names on the basis of article 9(3) of the Terms and Conditions.
Conversely, the Complainant disputed the Respondent's legal grounds to block the Blocked Domain Names. Hence, the Complainant introduced the present ADR proceeding and simultaneously joined the two other Cypriot companies in their claim before the President of the Court of First Instance of Brussels.
By decision of 27 September 2006, the President of the Court of First Instance of Brussels agreed with the Complainant, stating that the judicial proceedings directed against the registrars did not entitle the Respondent to block domain names registered by the registrants. Thus, the President ordered the Respondent to release the Blocked Domain Names.
Hence, the Respondent has immediately unblocked all of the Blocked Domain Names, with the exception of a very small number of domain names that are the subject of an ADR procedure, amongst which the Disputed Domain Names.
As mentioned above, these domain names must remain blocked, not because of the initiation of a judicial proceeding, but because of the initiation of an ADR proceeding.
Indeed, pursuant to article 22(6) of the Regulation and article 9(3) of the Terms and Conditions, the Respondent must block any domain names that are subject to an ADR proceeding. Note that this is not an option for the Respondent, but an obligation, the failure of which may be challenged by legal proceedings and/or ADR proceedings.
The Respondent will of course no longer block the Disputed Domain Names on the basis of article 22(6) of the Regulation and article 9(3) of the Terms and Conditions once this ADR proceeding has been terminated.
Consequently, the Respondent agrees with the Complainant that the Respondent's decision of 20 July 2006 should be annulled, so that the Disputed Domain Names can be released immediately upon the termination of this ADR proceeding.
Hence, there is no reason for the Panel to further decide on the merits of the case. Likewise, there is no reason for the Panel to order the disclosure by the Respondent of any documents used, referred to or relied upon in connection with the Respondent's decision to block the Disputed Domain Names.Discussion and Findings
The Complainant asserts that Respondent’s decision to place the domain names on hold or ‘blocked’ is illegal and requests:
i. the annulation of the Respondent's decision to block the Blocked Domain Names;
ii. the provision by the Respondent of copies of all documents used, referred to or relied upon in connection with the Respondent's decision to block the Blocked Domain Names; and
iii. to be given the opportunity to provide a rejoinder to the Respondent's response.
The Respondent agrees with the Complainant that the Respondent's decision of 20 July 2006 should be annulled, so that the Disputed Domain Names can be released immediately upon the termination of this ADR proceeding.
Based on those assertions, the Panel concludes the following:
1. The annulment of Respondent’s decision relative to the domain names
Pursuant to Article 22(6) of the Commission Regulation No. 874/2004 and article 9(3) of the Terms and Conditions, the Respondent has the obligation to block any domain names subject to an ADR procedure.
The Complainant initiated an ADR proceeding regarding the disputed domain names on 8th August 2006
The Respondent did not have the power to unblock the Complainant’s disputed domain names until the ADR proceeding initiated by the Complainant was terminated. That is why the disputed domain names are still blocked.
The Respondent agrees to release the domain names from the ‘blocked’ status once this ADR proceeding is terminated and agrees with the Complainant that the Respondent’s decision should be annulled.
For all the foregoing reasons, the Panel is of the opinion that the Respondent’s decision should be annulled, and such an action does not conflict with the Court’s decision.
2. The Complainant’s request to obtain production of documentation relied upon in making its decision relative to domain names.
Pursuant to article 1(17)(i) of .eu ADR Rules: “In case of an ADR Proceeding against the Registry any request of a Complainant for documentation or other information related to the Registry decision challenged in the ADR proceeding must be made directly to the Registry in accordance with the Registration Policy”
Hence the Panel is of the opinion that the Complainant must make its request directly to the Respondent if he wants to obtain production of documentation relied upon.
3. The permission to file a rejoinder to the Respondent’s reply.
Since, the Respondent agrees that the domain names should be released from the ‘blocked’ status upon termination of this ADR proceeding, then no rejoinder seems necessary in the present case.Decision Panelists
- Nathalie Dreyfus
- Berta Ramos Palenzuela
- Konstantinos Komaitis
Date: 2006-11-09 Annex 1
The Respondent agrees to release the domain names from the ‘blocked’ status once this ADR proceeding is terminated and agrees with the Complainant that the Respondent’s decision should be annulled.
2. The Complainant’s request to obtain production of documentation relied upon in making its decision relative to domain names.
The Complainant must make its request directly to the Respondent if he wants to obtain production of documentation relied upon.
3. The permission to file a rejoinder to the Respondent’s reply.
No rejoinder seems necessary in the present case.