Monday, March 24, 2014

Czech Constitutional Court: Domain Name Protected as a Property

The Czech Constitutional Court this month handed its anticipated decision in globtour.cz case (III. ÚS 2912/12). The Court heard a constitutional complaint by one of the plaintiffs who complained that his right to fair trial, right to property and right to legal certainty were infringed when the Czech Supreme Court rejected the domain name transfer as a legal remedy under domestic tort law.

The Czech Supreme Court in globtour.cz (23Cdo 3407/2010) put an end to a decade long practice of Czech courts issuing domain name transfers based on a claims for injunctive reliefs. The reasons for the shift of the case law are mostly doctrinal (for those interested see my English paper 'Domain Name Transfer Before Slovak and Czech Courts'). 

I was personally criticizing the Czech courts on their reasoning of the domain name transfers some years before the decision was handed. My opinion was (and is) that the Czech Supreme Court is both right and wrong when rejecting the domain name transfers. It is right in rejecting it as a form of a claim for injunctive relief, but it is also wrong for not construing it by analogy based on Regulation Article 22(11) of Regulation 874/2004 (see the paper for details).

It was also for these reasons why our non-profit - European Information Society Institute - filed an amicus curiae with the Czech Constitutional Court, arguing that domain name transfer should be available. We were clear that unless the plaintiff won't be able to establish some constitutional intensity of his case, it will be rejected. Nevertheless we felt that such a submission might help the Court to get a better picture of the doctrinal debate and practical consequences. 

The Constitutional Court on 6th of March rejected the compliant as unfounded. It opined that most of the arguments of the plaintiff had no constitutional intensity to justify any interference by the Court. Nevertheless, it issued a brief opinion on protection of domain name under constitutional right to property. Similarly as European Court of Human Rights in its well-known ‘ad-acta.de’ decision (Paeffgen Gmbh v. Germany, No. 25379/04, No. 21688/05, No. 21722/05 and No. 21770/05), the Czech Constitutional Court (without citing Strasbourg case-law) confirmed that a domain name might be protected as a property under Article 1 of Protocol No. 1 to the Convention, which provides:
“Every natural or legal person is entitled to the peaceful enjoyment of his possessions. No one shall be deprived of his possessions except in the public interest and subject to the conditions provided for by law and by the general principles of international law.

The preceding provisions shall not, however, in any way impair the right of a State to enforce such laws as it deems necessary to control the use of property in accordance with the general interest or to secure the payment of taxes or other contributions or penalties.”
The Court did not engage in any lengthy analysis, but rather quickly comes to the conclusion that neither Article 1 of Protocol No. 1 to the Convention, nor Art. 11 of the Czech Charter of Fundamental Rights and Freedoms, were infringed upon. Civil litigation due to alleged infringement of trade mark rights, unfair competition and rights in trade name were seen as a justified interference (similarly as ECHR in Paeffgen Gmbh v. Germany).

Czech domain name litigation is currently in the flux. After the Czech Supreme Court rejected the domain name transfers in April 2012, in December 2013, it also struck down the legal construction of Czech domain name ADR system that was not soft-law ADR based, but has a form of a full-fledged binding arbitration. The Court rejected validity of the arbitration clause because it was of the opinion that the agreement about the arbitration was not properly formed under the Czech contract law.

Whereas the lack of the remedy for domain name transfers was already remedied by the Czech domain name authority (CZ.NIC) which enabled a system of dispute blocking, the exact reaction of the same authority to the arbitration validity issues is still under the consideration.

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