São Paulo Court of Justice Decision on Starlink.com.br Domain Rekindles Debate on Industrial Property and Competitive Ethics in the Digital Environment.
The recent ruling by the São Paulo Court of Justice[1] in the SpaceX vs. Starlink.com.br case reignites the debate on the limits of the first come, first served principle, which governs domain name registration, in light of cybersquatting practices—an increasingly common misuse of third-party names in the digital environment.
The dispute began with an administrative decision by NIC.br (Brazilian Network Information Center) in an internal procedure that ordered the transfer of the domain Starlink.com.br to SpaceX, recognizing signs of bad faith in the registration maintained by a Brazilian company.
Dissatisfied, the domain holder filed a lawsuit to annul the administrative decision and declare the absence of bad faith. The trial court granted the request, ruling that the registration complied with the priority rule (first come, first served) and that there was no evidence of improper exploitation of the trademark.
However, the São Paulo Court of Justice, through the 1st Reserved Chamber of Business Law, partially overturned the judgment, reinstating the administrative decision and recognizing that the conduct demonstrated bad faith, while rejecting SpaceX’s counterclaim for damages due to unfair competition.
The controversy involved the domain Starlink.com.br, registered in 2016 by a Brazilian company before SpaceX applied for the “Starlink” trademark with the Brazilian Patent and Trademark Office (INPI) in 2018.
At first glance—and as decided by the trial court—the ownership appeared legitimate, since Resolution No. 008/2008 of the Internet Steering Committee (CGI.br) establishes that domains are granted to the first applicant[2], applying the first come, first served principle.
Nevertheless, the São Paulo Court of Justice reversed the trial court’s decision, reinstating NIC.br’s administrative ruling that ordered the transfer of the domain to SpaceX, recognizing clear evidence of bad faith.
As highlighted by the court, the registration occurred after the international launch of the Starlink project, and the registrants operated in the same industry (telecommunications), making it implausible to claim ignorance of the global project. Furthermore, the domain remained inactive for years and was later offered to SpaceX for R$ 50 million.
The decision is emblematic in affirming that the principle of priority does not legitimize opportunistic behavior. The court established an important ethical safeguard against predatory appropriation of distinctive signs, emphasizing that the race for domains cannot serve as a tool for unjust enrichment, diversion of clientele, or market confusion.
Like trademarks, domains form part of a company’s intangible assets, functioning as a digital extension of the business establishment—an asset that conveys reputation, origin, and trustworthiness.
From a legal perspective, the ruling reinforces the need to interpret domain regulations in harmony with the Industrial Property Law (LPI), particularly Articles 124(V)[3] and 129[4], which guarantee exclusive trademark use and prohibit the reproduction of distinctive signs likely to mislead consumers. Trademark protection is not limited to formal registration; it also derives from use and market notoriety.
The court also reaffirmed the Superior Court of Justice’s settled understanding that, although first come, first served applies in Brazil, registration may be challenged if bad faith is proven—characterized by unethical conduct aimed at exploiting another’s reputation.
As established in REsp 658.789/RS[5], “The legitimacy of a domain name registration obtained by the first applicant may be contested by the holder of a similar or identical distinctive sign previously registered—whether a trade name or trademark. […] Such a claim, however, requires proof of bad faith, assessed case by case, which, if confirmed, may lead to cancellation or transfer of the domain name and liability for damages.”
Similarly, in REsp 1.804.035/DF[6], “This Court has also held that […] a party harmed by a conflicting domain name may contest it if they hold a registration for an identical or similar distinctive sign. Such a challenge should only be upheld if bad faith is established, which, in cases like this, is characterized by unethical, opportunistic acts aimed at causing consumer confusion, diverting clientele, or parasitic exploitation.”
In the case at hand, factors such as the prior international trademark use, prolonged inactivity of the Brazilian domain, and the exorbitant price demanded for its transfer constituted a textbook example of cybersquatting—a practice that threatens fair competition and undermines the identifying function of distinctive signs by misappropriating third-party names, increasingly common in the digital environment.
From a business standpoint, the ruling underscores an important principle: domain name disputes have become a strategic component of intangible asset management. Trademarks, patents, and electronic addresses now form an ecosystem of value where digital identity overlaps with market presence.
For multinational companies, failing to secure preventive domain registrations can lead to reputational risks and costly litigation. For small entrepreneurs, the case illustrates that good faith and respect for the economic function of trademarks are imperatives that transcend mere technical formalities.
Ultimately, the São Paulo Court of Justice reaffirmed a civilizing principle: in the digital environment, the right to exclusivity is not a privilege but a consequence of legitimate and ethical use. While first come, first served ensures legal certainty, it should not shield speculative behavior.
Thus, the rise of the digital economy demands a new balance between registration freedom and competitive responsibility—a balance that Brazilian courts are beginning to shape.
Autor: Fernanda Regina Negro de Oliveira • email: fernanda.oliveira@ernestoborges.com.br
