SWATCH AG has won domain name swatch.ru by court action

01.11.2010

Swatch AG, the owner of trade mark SWATCH, has won domain name swatch.ru by court action from an individual. Thus, a precedent has been set for a transfer of a domain name from a cybersquatter to a conscientious trade name owner.

The arbitration court of the Moscow oblast ruled to transfer the disputable domain name to Swatch AG as well as to pay compensation to the claimant for the violation of the use of trade mark SWATCH in the amount of 10 thousand Rb. This verdict may become crucial for other brand and trade mark owners whose domain names are administered by individuals who have no relation to such companies.
Interestingly, one of the defendant’s arguments was that domain name swatch.ru was not used as a site address in the Internet and there was no business activity with the use of it. However, Swatch AG lawyers managed to prove that failure to use this domain name in the Internet engenders  the corporation’s direct losses due to disorientation of potential consumers of its products and creates the impression of the absence of  its products on the Russian market which can be equaled to diffusion of negative information about Swatch AG.

Moreover, Swatch AG lawyers called the court’s attention to the fact that the owner of domain name swatch.ru does not hold rights for the brand, trade mark and commercial name SWATCH with regard to any class of goods, works and services. In other words, he has no legal rights to use this trade name and unlawfully holds the disputable domain name and, at the same time, does not allow Swatch AG to use this trade mark in the Internet. The court has also agreed with the fact that the disputable domain name appears confusingly similar to the trade mark of Swatch AG.

In contrast to Europe and the USA, in Russia there is no pre-trial settlement procedure for disputes regarding domain names. That is why trade marks owners were forced to settle with domain name administrators and pay them considerable sums of money for the transfer of domain names (that was the administrator of swatch.ru probably counted on). However, corporations have recently begun to more and more often turn to the court of law and such decisions have paid off: for example, in early 2010, following the verdict of the Moscow city arbitration court, the Forbes Publishers was awarded the domain name forbes.ru and rather a hefty compensation