Incoterms_® and Commercial Contracts

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1. Introduction

According to the China Internet Network Information Centre (CNIIC), as of the end of 2007, the country’s internet had attracted 210 million users and this population was growing at an annual rate in excess of 50%. Because of its relatively low penetration rate (16% of the population compared with a world average of 19%), China remains second in the world for the number of its internet users, behind the United States.

Despite its claims of best efforts to combat violations of intellectual property, the country is accused of being a prime source piracy on the web. The motion picture industry reports, for example, that all of the major peer-to-peer (P2P) sites streaming broadcast programs operate out of China. The recording industry reports that seven or more MP3 search engines offer deep links to thousands of infringing song files. The largest of these is alleged to be Baidu (the preferred search engine of 75% of Chinese internet-users). The record industry is also alleged to have filed cases against Yahoo China for its deep linking service. But on November 17, 2006, the Beijing Intermediate Court dismissed the recording industry’s civil actions against Baidu seeking some USD 226,000 in damages for violations of the rights to 137 songs and, on December 31, 2007, the Beijing High Court was reported to have affirmed the trial judgment.

In October, 2007, the National Copyright Administration of China (NCAC) issued the Notice of Launching of a Special Crackdown on Internet Infringement and Piracy that focused on illegal operations of offering downloads of movies, music, software and textbooks for profit. The copyright administrative departments across the country conducted investigations of 436 cases, alleged violators in 361 cases were ordered to cease their infringements, fines of some RMB 750 000 were imposed, 71 illegal servers were confiscated, 205 illegal websites were closed, and six cases were transferred to the judicial authorities for criminal investigations.

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2. Copyright protection on the internet

On April 30, 2005, the National Copyright Administration and the Ministry of Information Industry (MII) promulgated the Measures for the Administrative Protection of Copyright on the Internet that entered into effect on May 30, 2005 (the Internet Copyright Measures).

The Measures are applicable to the automated provision, according to the directions of an Internet content provider, of internet information services such as uploading, storage, linking to, or searching of content, including works, sound recordings and video recordings without editing or revision or selection of such stored or transmitted content.¹ They define the rights of performers, producers of audio and audiovisual recordings and other copyright holders to transmit their performances or recordings over the internet.²

The Measures confirm that the Copyright Law applies to content uploaded onto the internet.

Article 4 vests administrative jurisdiction in the Copyright Administration Department where the equipment is located.

Upon receiving written complaints from copyright owners, internet service providers (ISPs) must immediately remove the offending content and they must record the content, posting time and internet address or domain name of the information, as well as send written notice to the content provider.³ Internet access providers must record the internet content provider’s access time, user account, internet address or domain name and dial-up telephone number. These records must be retained for a period of 60 days and must be made available to the Copyright Administration Department.⁴

Under article 7 of the Measures, affected content providers may protest in writing to the ISP and to the copyright owner, whereupon the ISP may restore the content.

Article 11 provides that the competent Copyright Administration Departments may order ISPs to cease infringements and may impose penalties in accordance with article 47 of the Copyright Law as mentioned above, including the imposition of fines of no more than three times the illicit income or, if the illicit income is difficult to calculate, fines of no more than RMB 100,000.

To be liable, an ISP must have been aware of the infringement and must have refused to remove the litigious material.⁵

An ISP in violation of its obligations under the Measures may be given warnings to remedy the situation and may be fined up to RMB 30,000 by the competent office of the MII or by telecommunications administrative departments.⁶

Criminal offences may be prosecuted before the people’s courts.⁷

According to the Interpretations of the Supreme People’s Court on Laws For Trying Cases Involving Internet Copyright Disputes of December 20, 2000, which entered into effect on the following day, access suppliers that participate in violations of intellectual property may bear joint liability with the wrongdoer under article 130 of the General Principles of Civil Law. According to article 5 of the Interpretations, when they learn of violations of copyrights or of other rights of third parties, they must remove incriminated information. Under article 7, the authorities may require the access provider to indentify the wrongdoer, lest its own liability be incurred.

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3. Domain names

As of June 2007, the Chinese mainland had registered 9.18 million domain names, while recently recording average annual growth rates in excess of 200%.⁸ There were also 1.31 million websites, an increase of 66.4% from 2006 of which 810,000 used a cn top-level domain name.⁹

3.1. The regulatory framework governing domain names

The domain name regime in China is administered under the general guidance of the MII¹⁰ by the State Council’s Information Office,¹¹ assisted by the CNNIC.¹²

The MII is responsible for:

• formulating regulations and policies for the administration of the domain names system;
• establishing the regimes governing the cn and other Chinese domain names, in particular those in Chinese characters which translate the words China, com (the Chinese characters are those for company), org (organization) and net (network);
• administering the institutions that operate the DNS root servers within the territory;
• administering domain name registries and registrars in China;
• supervising the conditions in which domain name registration services are provided; and
• conducting international coordination related to domain names.

The State Council’s Informatization Office is the official Chinese agency responsible for China’s internet domain name system. Its responsibilities include:

• the formulation of policies and procedures to establish, allocate and administer China’s domain names;
• the selection, authorization and cancellation of top-level and second-level domain names;
• the supervision and monitoring of the registration of domain names; and
• the interpretation of the Domain Name Rules.

The CNNIC assists the State Council’s Informatization Office with day-to-day administration, including the administration of China’s top-level domain name, cn. Its main tasks include the operation of the internet keyword server ¹³ and the provision of a framework for the settlement of disputes relating to domain names.¹⁴

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The principal norms governing domain names in China are set down in the China Internet Domain Name Regulations (the Domain Name Regulations),¹⁵ the Provisional Administrative Rules for Registration of Domain Names (the Administrative Rules),¹⁶ as complemented by the Temporary Management Regulations of CNNIC Membership,¹⁷ the CNNIC Implementing Rules for Domain Name Registration¹⁸ and the CNNIC Domain Name Dispute Resolution Policy.¹⁹ The Chinese normative structure also includes provisions for internet keyword²⁰ regulation: the Internet Keyword Registration Measure²¹ and the Internet Keyword Disputes Resolution Policy set down by CNNIC.²²

Some 24 registrars of domain names have been approved²³ in accordance with the CNNIC Registrar Application and Authentication Procedures.²⁴

The principal Chinese domain name dispute resolution providers recognized in China are the Domain Name Dispute Resolution Centre under the aegis of the China International Economic and Trade Arbitration Commission (CIETAC)²⁵ and the Hong Kong International Arbitration Center (HKIAC).²⁶ In addition, parties may refer their domain name-related disputes connected to China to the Asian Domain Name Dispute Resolution Centre, which was established in 2002 by the CIETAC and the HKIAC.

3.2. Regulation of activities related to domain names

Anyone setting up a DNS root server must obtain approval from the MII. To qualify as a DNS root server, the applicant must dispose of adequate funds, professional personnel, facilities and technical capabilities, as well as means to safeguard the security of the networks and of the information transmitted.

Any organization intending to set up a domain name registry or that intends to act as a registrar within China must obtain the MII’s approval. Applicants must set up top-level domain name servers within China in conformity with the global and domestic domain name systems. Applicants must have adequate funds and creditworthiness, competent professional personnel, and good performance records in conducting domain name-related business. They must have monitoring mechanisms as well as the ability to provide security and solve technical problems.

All organizations providing domain name registration services must be legally incorporated companies or incorporated institutions possessing registered capital of at least RMB 1 million. They must employ specialized engineers and customer service personnel, and be creditworthy as well as capable of providing secure and reliable services over the long term.

Under article 16 of the Domain Name Regulations, the MII must answer applicants within five days of any filing as to whether the application has been accepted for review and must, in the event of a refusal, provide explanations.

Article 17 requires that decisions to approve applications or not be made within 20 days from acceptance of the application except that the MII may extend the deadline for ten days subject to giving the applicant an explanation.

Successful applicants receive a written certification from the MII and unsuccessful applicants are given written explanations.

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Domain name registries must abide by the relevant national laws, administrative rules and regulations, ensure the safe and reliable operation of the domain name system, and provide domain name registrars with safe and convenient services on equal and rational terms. Registries may only interrupt a domain name registrar’s registration service for proper cause.

Domain name registrars must respect the relevant national laws, administrative rules and regulations, and they must provide users with domain name registration services on equal and rational terms. They must not defraud, intimidate or take any other malfeasant measures to obtain that users register domain names. They must deploy adequate emergency communication devices.

Domain name registries must adopt measures to protect words whose use could threaten or harm national interests or those of civil society. Such measures must be notified in advance to the MII.

Domain name registries and registrars may not reserve domain names for their own account and they may not represent actual or potential domain name holders.

Domain name registries and registrars must publish their offers of registration services, including their fees.

They must provide search services with respect to domain name registrations.

They may not use registration information for other purposes except where national laws and administration so require.

3.3. Regulation of domain names

The expression “domain name” refers, according to Chinese law, to “the character identification of hierarchical structure that identifies and locates a computer on the internet and corresponds to the IP address of this computer”. The expression “Chinese Domain Name” refers to domain names containing Chinese characters.²⁷

The administrators of domain names at each level are responsible for the registration of domain names one level below their level. The top-level domain name officially registered by China with InterNIC is cn.²⁸ Second-level domain names are either category domain names²⁹ or administrative division domain names.³⁰ The CNNIC Steering Committee may suggest additions or amendments to the list of secondlevel domain names, which must then be approved and promulgated by the State Council’s Informatization Office.³¹ Second-level domain name administrators must regularly submit registration statements of their third-level domain names to CNNIC.³²

Third-level domain names, those which serve to identify the holder, may not exceed 20 characters. They may be composed of letters (A-Z, a-z, with no case-sensitivity), digits (0-9) and hyphens (-).

Applications for domain name registration are submitted to a domain name administrator one level higher than that of the applicant. They may be delivered by “electronic mail, facsimile, post, etc”.³³ All the other required documents must be submitted by any means within 30 days thereafter lest the application be automatically considered void.

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Under article 6 of the Domain Name Rules, applicants for domain name registration must be “organizations that have been registered according to law and which independently assume civil liability”. They must satisfy the following conditions:

• the domain name application for registration must comply with the Domain Name Regulations and the Domain Name Rules;
• the applicant’s primary domain name server must be operated within China and provide continuous service for the domain name; and
• the applicant must designate an administrative contact and a technical contact.

According to article 15 of the Domain Name Rules, applications for domain name registration must include a photo identification card of the individual filing the application.

Applicants for registration of domain names are “responsible for the domain name selected by him/her”.³⁴ Applicants are deemed to warrant that:

• the contents of their applications are true and accurate and that, “to the best of their knowledge”, the registration of the domain name selected will not harm the interests of any third party, and
• that the registration of the requested domain name is not intended to accomplish any illegal purpose.

Upon approval of the application, the applicant becomes the administrator of the domain name and must use it in accordance with the applicable regulations and rules.

Domain name administrators must complete the review of applications and issue registration certificates within ten working days, provided that the application is complete and conform with the regulations and the rules. Failing this, a rejection notice is sent and the applicant has 30 days in which to revise the application and present it again in conformity with the regulations and rules, otherwise it will be deemed to be null.

Under article 11 of the Domain Name Rules, domain names at and below the third level may not include:

• words such as China, Chinese, cn, national, etc. unless official approval from the relevant State authorities has been obtained;
• well-known names of other countries or regions, names of foreign locations or names of international organizations;
• full or abbreviated names of administrative divisions at and above county level unless approval from the concerned local government has been obtained;
• classifications of industries or generic names of goods;
• enterprise names or trademark names already registered in China by other parties; and
• names that are harmful to the interests of the State, society or the public.

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Priorities among registered domain names are determined on a “first to register” basis.³⁵ The date of an application is deemed to be the date on which the first application for registration is received.³⁶ Warehousing of domain name reservations is prohibited.³⁷

Written agreements must be concluded between the applicants and the service providers.

Applicants for domain names become their holders upon completion of the registration process.

A contentious question arising in this context concerns the requirement imposed by some panels that such rights and interests exist in Chinese law, which would disqualify for instance trademark rights acquired abroad but not recognized in China.³⁸

Further difficulties arise when the respondent in China has staked a claim (by use or by registration) to a name coinciding with the domain name of a foreign holder. Some panels have validated the Chinese party’s rights, provided the name had actually been used in the course of business.³⁹

Where changes occur in the information filed to register a domain name, the holder must file for a change in its registration within 30 days from occurrence of the event.

Domain name holders are free to select the domain name registrar of their preference and may change domain name registrars, in which case the first registrar is obligated to communicate all relevant information to the successor. Domain name registrars may not in the absence of proper reason deter registrants from changing registrars.

Under article 24 of the Domain Name Rules, registered domain names may not be transferred, sold or purchased.

Domain name registries must set up hotlines for customers’ complaints. Where any problem is hard to solve immediately, an explanation must be given to the customer and a timeframe for the solution should be indicated.

Under article 33, unsatisfied registrants may take their complaints to the MII.

The registrar must cancel domain name registrations if any of the following events occur:

• the domain name holder applies for the cancellation of the domain name;
• the registration information submitted by the domain name holder is untrue, inaccurate or incomplete;
• the domain name holder does not pay the related fees;
• a judgment of a people’s court, an arbitration institution or a domain name dispute resolution provider so requires; or
• the domain name is found to violate laws or regulations.

Domain name registries and registrars must conduct website inspections in concert with government departments, and suspend or cease servicing illegal domain names. Under article 27 of the Domain Name Rules, domain name administrators conduct inspections at least annually.

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3.4. Sanctions of domain name-related infractions

The MII is empowered to take measures to deter anyone from setting up a DNS root server, operating a domain registry or offering the services of domain name registrar without the administrative authorizations required in the Domain Name Regulations. Depending on the circumstances, it may issue warnings or impose fines of not more than RMB 30,000.

Where an authorized domain name registrar provides unapproved registration services, the MII may, after an unheeded summons to comply, take measures to stop the illegal activity pursuant to article 81 of Administrative License Law, and may issue warnings and impose fines of a maximum of RMB 30,000.

Under the provisions of article 27 of the Domain Name Regulations, no domain name registered and used by any organization or individual may:

• violate the basic principles prescribed in the Constitution;
• jeopardize national security, divulge state secrets, spread sedition, or disrupt the integrity of the State;
• harm national honor or national interests;
• incite hostility or discrimination between different nationalities, or disrupt national solidarity;
• violate state policies with respect to religion or propagate cults or feudal superstitions;
• spread rumors, disturb public order or disrupt social stability;
• spread pornography, obscenity, gambling, violence, homicide, terror or instigate crimes;
• insult, libel against others and infringe other people’s legal rights and interests;
  or
• contain material prohibited by any laws, rules or administrative regulations.

Any person who violates these provisions as detailed above in circumstances that constitute a crime is subject to prosecution. Where the violations do not constitute crimes, the competent institutions in accordance with the applicable laws and regulations may sanction them.

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4. The regulation of internet keywords40

CNNIC acts as the registry for internet keywords in China. It manages the internet keyword server and authorizes internet keyword registrars to provide registration services.⁴¹

Internet Keywords may consist of a maximum of 31 Chinese characters, ASCII letters (a-z, independent of capitalization), Arabic numbers (0-9) or punctuation marks (-, !).

No internet keyword containing any of the following may be registered:

• violations of the basic principles of the Constitution;
• threats to national security, disclosures of State secrets, acts of sedition or that disrupt the integrity of the State;
• inflictions of harm to national honor or national interests;
• instigations of hostility or discrimination among nationalities, or disruptions of national solidarity;
• violations of State policies toward religion or propaganda in favor of cults or promoting feudal superstitions;
• rumors, disturbances to public order or disruptions to social stability;
• pornography, obscenity, gambling, violence, homicide, terror or incitements to commit crimes;
• insults, libel against others and infringements of others’ legal rights and interests; and
• other contents prohibited by laws, regulations and rules.

Applications to register internet keywords are filed with CNNIC-approved registrars, and upon acceptance of the registration, a written agreement must be signed.

Internet keyword holders must:

• register and use the internet keywords in conformity with the applicable laws and regulations as well as the relevant policies of the CNNIC;
• use internet keywords consistently with the corresponding website or webpage;
• submit true, accurate and complete registration information;
• refrain from registering or using internet keywords in bad faith or using them for any illegal purpose; and
• avoid cybersquatting names of other parties.⁴²

Internet keyword applications may be submitted online.⁴³

The application is deemed to have been filed on the day of receipt by the CNNIC of the first effective application form.⁴⁴ Changes of information relating to a keyword registration must be filed within 15 days of their occurrence.⁴⁵

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Internet keyword registrations are cancelled upon the occurrence of any of the following:

• the registrant so requests;
• the registered internet keyword is not coherent with the content of corresponding website or webpage;
• the internet keyword was squatted by the registrant;
• the registration information was not true, accurate, complete or updated after changes;
• the registration charges are unpaid;
• a court, arbitration commission or internet keyword dispute resolution institution has ordered their deletion; and
• the internet keyword has entailed civil or criminal liability for any registry, registrar or their staff.⁴⁶

Registrants are liable for the consequences of their registration of unlawful internet keywords.⁴⁷

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5. Domain name and internet keyword disputes

5.1. Domain name disputes

The CCNIC has created a framework for solving domain name-related disputes based on its approval of providers of dispute resolution services, which take charge of organizing proceedings to decide disputes referred to them by the parties and domain name claimants, in accordance with the Rules for CNNIC Domain Name Dispute Resolution Policy (the CNDRP Rules).

The CNDRP emphasizes rapid and inexpensive⁴⁸ decisions in a procedural framework that closely follows that of the Uniform Domain Name Dispute-Resolution Policy of Internet Corporation for Assigned Names and Numbers (ICANN).⁴⁹ The CNNIC requires that domain name registrants and their registrars conclude written contracts containing commitments to refer domain name-related disputes to arbitration services under the CNDRP. But recourse to CNDRP arbitration does not preclude or forestall recourse to judicial or other arbitral procedures. CNDRP arbitration panels are not empowered to award damages or issue injunctions.⁵⁰

Under the terms of article 12 of the CNDRP Rules, complaints must be submitted in hard copy and (except if impractical for annexes) in electronic form.

Complainants must elect whether to have the dispute decided by a single-member panel or a three-member panel and, in the event a complainant elects a three-member panel, it must provide the names of three candidates from the provider’s list of panelists, in the order of its own preference, to serve as panelists. The complainant may also designate the provider to appoint the panelist on its behalf.⁵¹

Complainants must provide the name of the respondent (domain name holder) and information (including any postal and e-mail addresses and telephone and fax numbers) regarding how to contact the respondent or any representative of the respondent, in sufficient detail to allow the provider to notify the complaint.⁵²

The complaint must specify the domain name that is subject of the complaint and identify the registrar with which the domain name is registered, as well as the rights or interests invoked and describe grounds in the CNDRP justifying the complaint, in particular:

• that the disputed domain name is confusingly similar to a name or mark in which the complainant has rights or interests;
• that the disputed domain name holder has no right or legitimate interest in respect of the domain name; and
• that the disputed domain name holder has registered or used the domain name in bad faith.

Panels under the CNDRP arbitration have tended to apply wide interpretations to the notion of bad faith, including within its purview the presence of generic or descriptive words, or the failure to use the domain name.⁵³

Complaints must include the remedies requested.

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Whether any domain name is similar to another has raised especially difficult problems in Chinese. For instance, phonetically based transpositions into Chinese characters can allow for different combinations of characters (at the most elementary level, old or new characters). CNNIC policy is to grant domain names in either version of written Chinese (old or new characters); the question arises whether the registration of new characters implies the reservation of the characters in traditional script.⁵⁴

The following statement, signed or stamped by the complainant, must be submitted:

Complainant certifies that the complaint was filed in accordance with CNNIC Domain Name Dispute Resolution Policy and Rules for Domain Name Dispute Resolution Policy as well as the relevant laws; that the information contained in this Complaint is to the best of Complainant’s knowledge complete and accurate; that the corresponding claims and remedies shall be solely against the domain name holder and waives all such claims and remedies against the Dispute Resolution Provider and Panelists, the Registry and the Registrar, the registry administrator as well as the Agency.⁵⁵

The provider must review the complaint for administrative compliance with CNDRP and the Rules thereunder. If the complaint is conform, it is sent to the respondent. Where the provider considers the complaint to be non conform, it must promptly inform the complainant of the nature of the deficiencies. The complainant then has five calendar days within which to remedy the complaint, lest it be deemed withdrawn without prejudice to the right to submit another complaint.⁵⁶

According to article 5 of the CNDRP Rules, in notifying respondents, providers must employ “reasonably available means calculated to achieve actual notice” by postal delivery or by electronic means to contact points identified on the domain name registry or on the registrar’s WHOIS database for the registered domain, or to email addresses indicated on the respondent’s web site.

Dispute resolution proceedings are deemed to have been opened on the date on which the provider forwards the complaint to the respondent.⁵⁷

The CNDRP Rules stress the importance of the exchange of arguments between the parties. Communications between a party and the provider must be sent to the opposing party. The burden of proving any communication is on the sending party.⁵⁸ Communications intended for any party are to be sent by the means for which it has indicated its preference and, in the absence of such indication, the recognized means of communication include “facsimile transmissions, with a confirmation of transmission, postal or courier service, postage pre-paid and return receipt requested, or e-mails, provided a record of transmission is available”.⁵⁹

Communications sent to the provider or the panel must be made using the means and in the manner stipulated in the provider’s rules.⁶⁰

Unless otherwise agreed by the parties or determined in exceptional cases by the Panel, the language of the proceedings is Chinese.⁶¹ But, in the matter of Accord v. Hangzhou Yage Electronic Corporation, the panel allowed the use of English when the complainant from France submitted its complaint in English and the respondent did not reply at all. The panel took into consideration that the cost of translation services would likely exceed all the other costs of the arbitration combined.⁶²

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In principle, all communications are deemed to have been carried out on the date showed on the confirmation of transmission by facsimile or on the date marked on the receipt of letters, or on the date that the electronic communication was sent, provided that the date of dispatch is verifiable.⁶³

Respondents must submit their counter-arguments to the provider within 20 calendar days from the date of commencement of the proceedings.⁶⁴

According to article 18 of the CNDRP Rules, responses must be submitted in hard copy and in electronic form.

Even though the complainant has elected a single-member panel, the respondent may impose instead a three-member panel, in which event it must indicate three candidates from the provider’s list of panelists, in the order of its own preference, to serve as panelists, or it may request that the provider make the appointment. The respondent’s file must include the following signed or stamped statement:

Respondent certifies that the response was filed in accordance with CNNIC Domain Name Dispute Resolution Policy and Rules for CNNIC Domain Name Dispute Resolution Policy as well as the relevant law; that the information contained in this Response is to the best of Respondent’s knowledge complete and accurate; that the corresponding defences and assertions shall be solely against the Complainant and waives all such defenses and assertions against the Provider and Panelists, the Registry and the Registrar, the registry administrator as well as the Agency.

Fees for a single panelist are advanced by the complainant,⁶⁵ which also pays the entire fees of a three-member panel where it has imposed this choice.⁶⁶ Where a complainant has opted for a single-member panel and the respondent imposes a three-member panel, the latter must advance one half of the CNDRP panel’s fees, lest the dispute be resolved by a single-member panel.⁷⁷

Providers must maintain a publicly available list of panelists.

In cases to be decided by a single-member panel, the provider must make the appointment within five calendar days after receiving the respondent’s counter-arguments. ⁶⁸

When a three-member panel has been selected, providers should endeavor to appoint one panelist designated by each of the parties. The provider appoints the third panelist from its list. The third panelist acts as chairman of the panel.⁶⁹

Where respondents do not submit counter-arguments, or do so without designating panel members, providers do so in their stead in accordance with article 26 of the CNDRP Rules.

Selected panelists are free to decline the assignment, in which event the provider makes the concerned appointment from its list of panelists.⁷⁰

After the entire panel has been appointed, providers must immediately inform the parties of the panelists appointed and of the date by which the panel’s decision may be expected.⁷¹

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Panelists must be impartial and independent and are required to supply written declarations to this effect. Parties may express their protests against any panelist, but the provider exercises ultimate discretion.⁷²

Panels conduct their proceedings, including deciding upon the admissibility, relevance, materiality and weight of the evidence, at their discretion within the limits of the CNDRP Rules, but must in all events ensure that the parties are treated with equality and that each is given a fair opportunity to present its case.⁷³

In principle, the proceedings are conducted in writing without hearings, whether by teleconference, videoconference, or web conference, though any party may request hearings at its expense.⁷⁴

According to article 34 of the CNDRP Rules, a party in violation of any provision of the CNDRP Rules or time periods set down by the Panel, exposes itself to decisions based solely on the opponent’s arguments.

Panels may at their sole discretion consolidate disputes, provided that they are governed by the CNDRP.⁷⁵

According to article 37 of the CNRP Rules, panels should render their decisions within 14 days of their appointments.⁷⁶ Under article 38, providers “may review the form of the award on condition that the Panelists’ independence of decision is not affected”.

Decisions of three-member panels are decided by majority votes. Dissenting opinions accompany the majority decision.⁷⁷

Decisions are rendered in electronic form and in hard copy, and they include the reasons on which they are based, as well the dates on which they were rendered and the name(s) of the panelist(s).

Panels may rule that disputes fall outside the scope of the CNDRP.⁷⁸ They may suspend their proceedings pending the results of judicial or arbitral proceedings.⁷⁹

According to article 42 of the CNDRP Rules, proceedings may be terminated if the parties so agree as well as when the panel concludes that it has become “unnecessary or impossible to continue the proceedings” for other reasons, unless a party raises justifiable grounds for objection within a period of time determined by the panel.

Within three calendar days after receiving a panel’s decision, the provider must communicate the full text of the decision to each party, to the domain name registrar and to the CNNIC.⁸⁰

Unless otherwise decided by any panel, decisions are to be posted on a web site that is accessible by the public.⁸¹

According to article 49 of the CNDRP Rules, except in cases of deliberate wrongdoing, providers and panelists are not liable for their acts or omissions.

Administrators of domain names are not responsible for contacting the SAIC or the authorities competent over trademark registrations to verify whether there exist any conflicts with a registered trademark or trade name, or whether the domain name might be harmful to the interests of any third party.⁸²

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The holders of domain names bear legal liability where a third-level domain name is identical to a trademark or enterprise name registered in China by another party. If the trademark or trade name holder manifests its opposition to the domain name administrator at the appropriate level, the domain name registration is cancelled after 30 days. Domain name administrators are not liable for the consequences of such disputes.

Domain name holders must be given an opportunity to participate in the proceedings involving them.

The institution’s decision addresses only the issue of change in the information registered in association with the domain name, such as the identity of the holder.

In the event of conflict between any such institution’s decision with the ruling of a people’s court, or of an arbitration panel, the latter prevail over the former.

While proceedings are pending before any domain name dispute resolution institution, a people’s court or an arbitration panel about domain names, its holders may not transfer them unless the transferees agree in writing to be subject to their decisions.

5.2. Internet keyword disputes

Internet keyword dispute-settling institutions are authorized by CNNIC.⁸³ When seized of a complaint, they designate panels of experts, which have the power to decide in law and in fact whether the keyword registrant has justified the registration or the use of the keyword.⁸⁴ Internet keyword dispute-settling institutions are empowered to set down procedures including those for appointing the members of expert groups.⁸⁵ Such procedures must be approved by the CNNIC. The procedural rules must be published.⁸⁶

Registrants of internet keywords are deemed to have submitted to the Dispute Resolution Policy whenever:

• rights or legitimate interests protected by Chinese laws are at issue;
• the disputed keyword is similar to a name in which the complainant has rights or interests;
• the keyword registrant has no rights or interests in respect of the keyword;
  and
• the keyword has been registered or is being used in bad faith.⁸⁷

Expert groups may declare whether the registrant acted with malice such as when:

• the keyword was registered primarily for the purpose of selling, renting, or otherwise transferring it for unjustifiable interest;
• the keyword was registered to pre-empt third parties that enjoy rights or interests in a corresponding keyword, provided that there has been a pattern of such conduct; and
• the keyword was registered primarily to harm the complainant’s reputation or to induce confusion with the complainant in the mind of the public.⁸⁸

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The keyword registrant bears the burden of proving its right to or interest in the keyword.⁸⁹

Registrars of internet keywords do not participate in the proceedings before dispute resolution institutions except at the latters’ request to provide necessary information concerning the registration.⁹⁰ But, if the complainant wins the case, the registered internet keyword is cancelled or the registered internet keyword is transferred to the complainant.⁹¹ The registrant enjoys a grace period of ten days before actual cancellation in which “to prove that a competent court or arbitration commission has accepted the case and begun to hear it”.⁹²

Parties to disputes may at any time in the proceedings before internet keyword dispute resolution panels submit their dispute to the court or, where relevant, to arbitration, the rulings of which shall be respected by the dispute resolution institution.⁹³

Dispute settling institutions must accept online appeals and open web sites on which all the information and facts concerning the cases in dispute are posted unless, at the request of any party, the institution rules that such disclosure might impair that party’s interests.⁹⁴

Registrants may not transfer internet keywords that are the subject of judicial, arbitration or dispute resolution procedures, unless the transferee agrees to be bound by their rulings.⁹⁵

Any solution adopted in the course of keyword dispute resolution proceedings may be modified by the CNNIC in accordance with technical developments and changes of China’s laws, regulations and policies.⁹⁶ The revised solution is to be promulgated on the web site and to be implemented 30 days after the date of promulgation. The revised solution is not applicable to internet keyword disputes submitted to the dispute resolution institution before the revision. The revised solution automatically becomes part of the internet keyword’s registration protocol. Registrants that do not accept the solution or the revised solution must in a timely manner notify the registrar. The registrar will preserve 30 days’ service for the internet keyword after receiving the notification; after 30 days, the internet keyword will be cancelled.

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6. Conclusion

In general, Chinese policy toward the regulation of intellectual property tilts more toward propagation than is considered acceptable by the major holders of intellectual property rights. On the internet, the stakes of the conflict are amplified.

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