The Internet and the domain names as a closely associated area are primarily
regulated in Hungary by an association, called the Council of Internet
Providers ("CIP"), which is a body consisting of the Internet providers of
Hungary and having great freedom and self-government and also having the main
deterring power: having signed a contract with ICANN, the international
administration of the Internet.
The CIP is aided by two other organizations: the Advisory Board ("AB") and the
Arbitration Court supported by the CIP ("AC").
The CIP has issued a set of rules called the Rules of Registration, recently
this code was slightly redrafted and renamed to Principles of Domain
Registration ("Principles"). These Principles contain the most important rules
concerning the domain name regulation, and although they are by no way legal
rules, they are enforced as the binding legal rules of the domain name
Another very important document that creates rights and obligations (mainly for
the applicant of a domain name) is the Application Form necessary for the
proper registration (also called delegation) of any domain name. This
Application Form contains provisions such as (i) the applicant submitting
himself to the decision of AC and the AB, (ii) the obligation to carefully
select the domain name without infringing the rights of other persons or
entities, (iii) the declaration of the applicant to claim sole responsibility
for any damage caused during the procedure, etc. Practically, the Application
Form contains all the main rules in a compressed form. Upon the application,
this Form is signed by the applicant and submitted to the Registrator, the
company that takes care of the registration on behalf of the applicant.
Currently there are over 40 Registrators, each having signed a contract with
the CIP for the providing of the services related to domain name registration.
PROCEDURE OF REGISTRATION
There are two types of procedures depending on the circumstances of the
A claim has priority if the domain name to be registered is identical to the
registered trademark owned by the applicant or the company name of the
applicant. In both cases, the domain name must be identical to the trademark or
to the full or abbreviated company name, no deviation is allowed, except for
technicalities, such as spaces between words and the natural differences
between Hungarian and English spelling (e.g. the Hungarian letter "o" is
written in the domain name as "o") Very important that the trademark must be
registered, it is not enough if the applicant filed the trademark application;
and also the company name must be proven by a formal decision of the Court of
Registration registering the company in the company registry. (A typical
example for the strict nature of this identity is that company names such as
XXX Hungary Kft. may serve as a basis for priority in the case of the domain
name www.xxxhungary.hu, but it may not claim www.xxx.hu as a priority claim.)
The registrations of priority claims take place without the publication (please
see below), in a timely order, on a "first-come, first-served" basis.
CLAIMS WITHOUT PRIORITY
In cases of ordinary claims (where the applicant cannot prove any priority),
the selected domain names are published on the main server of the CIP together
with the date of publication. Counted from the date of publication, applicants
with the priority claim of that domain name have 14 days available to file an
objection against it or file an application to register for themselves the
domain name that was originally requested as an ordinary claim. In case of an
objection is filed within the 14-day period, the registration is placed on hold
until the final settlement of the case.
The Registrator has certain limited authority to refuse the registration of
domain names that obviously "belong to" another person or entity, but they
hardly ever utilize this power, they prefer to wait for the ultimate binding
decision of the AB or the AC.
In case no priority claim arises, then the domain name is delegated to the
VOLUNTARY WAIVER OF THE DOMAIN NAME
For both types of registration, the applicant must sign the Application Form as
described above, which Form also prescribes certain obligations to the
applicant concerning the careful selection of the domain name and which also
includes the obligation to renounce the domain name if the use of the domain
name infringes the interests of another party. Furthermore the applicant must
declare that it is aware of the possibility to check whether the domain name to
be registered is protected by a trademark protection.
Although this declaration creates a clear obligation, the applicants often fail
to comply with it and they force the other party to initiate legal measures,
such as lodging a claim before the AC.
DISPUTES ABOUT THE SELECTION OF A DOMAIN NAME
The registration procedure becomes legally significant if the application is
challenged by another person or entity. In this respect, we must distinguish
between objections submitted during the publication (before registration) and
objections submitted after the registration. It is important to emphasize that
if the registration was based on a priority claim, then this cannot be later
challenged by another rightholder; if the trademarks or company names are
identical, then the principle of "first come, first served" is applied. This
rule also applies if, for example, a less known trademark is registered, then
the owner of a second trademark appears, claiming that its trademark is widely
known (notorious) and objecting to the registration of the first trademark.
Since the use of one's own trademark excludes the possibility of trademark
infringement, the second owner does not have any choice (if it intends to use
that domain name) but to somehow reach an agreement with the first owner for
the sale or use of the domain name.
OBJECTIONS BEFORE REGISTRATION
If an application is published, it means that it does not have any priority,
therefore the objecting party has two options: it must either prove its
priority claim to the domain name or otherwise prove that the delegation to the
original applicant would be otherwise illicit or deceitful. For the proving of
the priority claim the same rules apply as during the original application
(trademark, company name, identity).
The other ground for objection (illicit or deceitful registration) is identical
to the objection presented after the delegation of the domain name, so I will
discuss it there.
OBJECTIONS AFTER REGISTRATION
After the registration, it might not be enough for the objecting party to prove
that its claim is a priority claim, but furthermore it must also prove other
facts, such as the illicit, deceptive nature of the registration. This
obligation also reflects the above cited principle of "first come, first
served", it forces even the rightholders to constantly check the status of
their trademark and company names to make sure that it has not been registered
as a domain name.
The ground for objection can be the illicit or deceptive nature of the
registration or such use of the domain name. The question what constitutes
illicit and deceptive is answered by the specific acts on trademark protection
and on unfair market practices, thus the actions of the party first registering
the domain name must be sanctioned in these specific acts in order for the
objections to be successful:
According to the practice of the AC, the registration of a domain name (that
happens to be a trademark) is considered as a use of the domain name, so the
domain name holder may not claim that it does not conduct any business under
the domain name, thus its actions do not qualify as trademark infringement.
If the trademark is not notorious, then the owner may only claim the deletion
of the registration if the domain name is used for the same classes of goods or
services that the trademark was registered for.
If the trademark is notorious, then regardless of the classes, the owner may
claim deletion. The fact that a third party registered a trademark as a domain
name usually is sufficient to prove that the third party knew that trademark,
thus it is easier to prove the notorious nature of the trademark.
There are two provisions in the Act on Unfair competition that may be applied
for domain name disputes:
Section 2 on the general prohibition of unfair economic activity and section 6
on the use of an identical or confusingly similar design, name, packaging and
mark that are associated with another competitor or its products. These rules
may be applied not only if damage has been caused, but also if its possibility
or threat exists.
For example, in one case, the AC held that registration of a significant part
of the company name (not the full name, because that would have been decided
based on priority) of a competitor as a domain name by another competitor
conflicts with section 6 of the Act on unfair competition.
Regarding the specific piece of market the two competitors are interested, one
ruling of the AC held that they do not have to operate on the same market,
whereas another held that this rule applies only to direct competitors, thus
this question does not seem to be settled yet.
If the commercial name of a competitor is not protected by trademark or it is
not the company's name, then it may also cite the above rules of unfair
competition to challenge the domain name registration of another party. In this
case, however, the proving procedure is more complicated, since no official
document evidences the existence and use of such commercial name.
RESPONSIBILITIES OF THE REGISTRATOR IN FILTERING ILLEGAL REGISTRATIONS
The Registrator must refuse the registration of an application if there is high
suspicion that the use of the domain name would be illicit or deceitful.
Nevertheless, the Principles declare that the Registrators do not guarantee
that they recognize each and every illicit or deceitful registration, and they
seem to prefer not to bring decisions themselves but to forward the problem to
the AB or signal to the parties the possibility of settling the case before the
AC. It is very important that only Registrators are entitled to file an inquiry
before the AB to bring a ruling on specific domain names before their
FORUMS OF DISPUTE RESOLUTION
There are three possible forums for the resolution of a dispute:
The Advisory Board has the authorization to decide in the question whether a
specific domain name may be delegated to an applicant in cases where there is
objection from a rightholder or the Registrator has suspicion about the domain
name. It is important that once the domain name has been delegated, the
Advisory Board does not have any competence to decide in the issue.
Once the domain name has been delegated, the resolution of any dispute
concerning the domain name falls into the competence of the Arbitration Court
supported by the CIP. This Court is a fairly inexpensive and quick way for
bringing final and enforceable judgments. The applicant of a domain name must
declare in the Application Form to submit itself to the Court and accept its
If a party that is not an applicant (thus it has not submitted itself to its
authority) and wishing to bring a lawsuit, may also do so before the ordinary
courts, mainly before the Municipal Court of Budapest as the one court
exclusively competent in deciding trademark infringement cases. The ordinary
court would bring its judgment applying the relevant legal rules, but it cannot
be stated for sure that it would also apply the Principles of Registration, as
these rules are not legal rules and they are not signed by the applicant
either. Nevertheless, the current general practice of the courts, when cases
can last for years, will probably be a strong argument for parties to choose
the Arbitration court instead of ordinary courts.
The legal framework for the protection of domain names indeed exists in Hungary
and there are various ways and forums that enable a company to step out for the
protection of its business interest. Nevertheless, one must also be aware that
the Internet prefers and requires swift responses and the traditional measures
of the old economy are not always sufficient. Therefore, the awareness of the
rightholder concerning domain names is a crucial factor and preventing the
problem becomes even more important as the damage that may be caused exceed the
scope that is expectable in the non-Internet related business.