DOMAIN NAMES AND INTELLECTUAL PROPERTY: LAW AND ECONOMICS REFLECTIONS ON DISPUTE SETTLEMENT

Abstract

Cybersquatting is the registration in bad faith of a domain name containing a third party’s trademark to later resell it to its legitimate holder. In order to curb this harmful practice, the Internet Corporation for Assigned Names and Numbers (ICANN) created a widespread dispute settlement system, which Brazil has rejected due to the peculiarities of its disputes. Based upon a Law and Economics perspective, this paper analyzes the efficiency of the Internet Conflict Administrative System (SACI-Adm) in comparison with that of the Superior Court of Justice (STJ). We found a clear preference for the former, which has issued 297 decisions that repeat the pro-complainant bias seen in the ICANN system. The six STJ cases, on the other hand, reveal a uniform jurisprudence centered around four main theses. The utilitarian philosophy underlying trademark protection appears only marginally in these decisions, as the Court prefers to investigate the bad faith of the domain owner emphasizing the moral dimension of Justice, despite the economic effects of cybersquatting. We conclude that SACI-Adm is the most effective system, given its lower costs, its quick decisions (40-days average), and its low judicialization rates.

Cybersquatting; trademarks; SACI-Adm; Superior Court of Justice; Law and Economics