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Appearing Respondents Called Out as Cybersquatters

Gerald M. Levine

UDRP complainants prevail in the range of 85% to 90% which approximately correlates with the percentage that respondents default in responding to complaints. The annual number of complaints administered by ICANN providers has been hovering around 4,000 +. Astonishingly, the number has remained steady for a good number of years despite the phenomenal increase in the number of registered domain names (7 million in 2000 and 340 million today). Compared to the whole, there are a relatively small number of contested disputes, perhaps in the annual range of 400 to 500, and of those a larger percentage are called out as cybersquatters.

Since the UDRP is essentially an in rem proceeding for control of accused domain names non-appearance is not determinative in favor of complainant. It is not an issue because unlike court proceedings default is not an admission of material allegations; complainants have the burden of proving their claims. There is no such thing in arbitration as a default award as there is in court, a default judgment. That is why, in an appreciable (although not a significant) number of uncontested cases, complainants lose to non-appearing respondents who either have priority of domain name registration or legitimate interests that are apparent from the record. But with rare exceptions uncontested complaints generally lose.

Looking at the daily list of awards from WIPO and the Forum, it's puzzling why respondents go to the trouble of acquiring accused domain names if they fold their tents when challenged by defaulting. Of the uncontested matters, steady targets include automobile, banking, cigarette, clothing, financial, hotel, entertainment, sports, securities, and technology brands. Celebrities are a low but steady target.

Of the contested matters, roughly 25% – 30% of respondents have solid arguments and proof they hold the domain names legitimately or by priority of right. The priority issue comes up in defense against a low but steady number of complainants whose trademarks postdate domain name registrations; these trademark owners have no actionable claim for cybersquatting but, since they have nothing to lose by initiating proceedings (because there's no risk of monetary penalties under the UDRP), they go for it! See earlier post at CircleID, "Corresponding to Trademarks, but Nonactionable Claims for Cybersquatting."

The other 70% to 75% also have no viable defenses but go for it, and lose! It is a lesson of sorts to set out what these registrants argue to justify their registrations. Appearing respondents (mostly pro se) have no idea what the law is or why their registrations are unlawful. Typical arguments include "the domain name was available" or "the trademarks owners had the opportunity to acquire them, and didn't." To take a typical example, Respondent in L-com, Inc. v. Neddal Fayyad, FA1611001703680 (Forum December 5, 2016) had a three-tier argument: (1) "[t]he lack of a hyphen, taken together with the inclusion of the word 'store' in the <lcomstore.com> domain name, adequately differentiates it from Complainant's L-COM mark", (2) "[m]any domain names contain the word 'store,' and there is now a '.store' generic Top Level Domain," and (3) "[he] has rights in the domain name because it is allowed to register available domain names."

First point about domain names being available is that registrars are not gatekeepers. Putting in or taking out a hyphen from a mark (any more than adding or subtracting a letter) does not improve an argument or differentiate the accused domain name from the mark. If to the ordinary observer the accused domain name is confusingly similar the analysis proceeds to the second and third limbs of the Policy. If the domain name is confusingly similar to a mark adding or subtracting characters can rarely amount to a distinguishable expression. What's added cannot rise to the dignity of dominance as Respondent learned in Google Inc. v. J Renz, FA1609001694123 (Forum October 28, 2016). He argued that <googleqq.com>. He argued the domain name "is not confusingly similar to the GOOGLE mark as the "QQ" part of the domain name is the dominant portion." The Panel disagreed. As marks rise on the classification scale from suggestive to arbitrary and fanciful they will always be dominant.

There creeps into many responses a tone of indignation implying that respondents are being put upon by overreaching mark owners. Typical is the Respondent in Eastman Kodak Company v. free enda / upot, FA1610001698767 (Forum November 23, 2016) (<freekodak.us>) although not necessarily expressed in such rich language. He failed to submit a formal Response but sent an email that reads: "whats [sic] going on, if you want the domain i can sell it to you but this bullshit your [sic] doing isnt [sic] getting you anywhere."

The various "defensive positions" ("I registered the name because it was available" or blaming the mark owner for not thinking up the name first and registering it) come about in part because, as I say, Registrars are not gatekeepers. The sole gatekeeper of sorts (although more of a "warner" than a gatekeeper) but only for new gTLDs is ICANN's Trademark Clearinghouse (TMCH) which essentially discourages prospective registrants by warning of potential mark infringement. In MAK Capital One L.L.C. v. Nicholas Nader, FA1609001693995 (Forum October 21, 2016) (<makcapitalfunding.com> Respondent protests that "he had no idea this was a trademark protected name and he just wanted to buy a domain name. He was under the impression that if the Registrar allowed him to buy the domain name he was not doing anything wrong."

Another form of defense is that the domain name, although to ordinary observers it may spell the mark, is actually not the mark if read as respondent would have the Panel read it. For example, in Coachella Music Festival, LLC v. Titus Watson, FA1610001699866 (Forum December 2, 2016) Respondent "intends to use in 2017 to create a website to promote a team of tee ball players. Therefore, the terms of the website correlate to the site's intended use: 'Coach Ella' representing Coach Ellan (or Ellen) Foster, and 'tees' representing the tee ballers Ellan (or Ellen) Foster will coach." The Panel would have nothing of it:

Last but not least this Panel dismisses Respondent's arguments that the purported use of the domain name under dispute <coachellatees.com> referred to a Coach Ellen Foster as far as the COACHELLA part of the domain name under dispute is concerned, as the foregoing makes no spelling sense. If indeed the intended name to be reflected in the sense the Respondent wanted was Coach Ellen Foster, in that case the domain name registered would have been <coachellentees.com> or <coachellantees.com> instead of the current <coachellatees.com>.

The Respondent in World Wrestling Entertainment, Inc. v. IU OR, FA1611001701122 (Forum November 30, 2016) (<wwe.promo>) "[o]ffered to sell domain name for $900,000 and threatened to sell the domain name to a third party if Complainant would not pay." In rich but ungrammatical language in an email (not in a response) he continues,

My domain is no working Properly and what is disputes issue .I want to use this domain for fair use who is WWE Company I don't know. But i do know i bought wwe.promo. Its my domain it (sic) no one can take this from me. How to file law suit again WWE and Godaddy and Suggestion (sic).

And

First i want to tell you that i have no bad faith for this domain. For Diverting your traffic or anything .I always registered domain not posting my own name and details about me because i don't want to pay for privacy it cost 15$ something. That's why i hide all details about me because you know about haters. Now I read that all Complaint ... What should i need to do to save my domain or sell you for a reasonable price. Take this domain how much you will pay me If any. Or what will happened (sic) to domain i don't know.

There's continuing confusion among domain buyers (not likely to be professional investors) that dictionary words are "generic" therefore available to the first to register them. That's not the case at all. There are numerous trademarks composed of common words; weak perhaps, and vulnerable when combined with other common words but nevertheless protectable with sufficient proof of bad faith. In Retail Royalty Company and AE Direct Co LLC v. Daniel Cormier, FA1610001698852 (Forum November 23, 2016) the Respondent argued that "the primary term of <aeried.com> is a common dictionary word, aeried, and that therefore, Respondent is as free as Complainant to use the term on the Internet." Complainant was the registered owner of AERIE so the added "d" to its mark representing typosquatting. In parsing Respondent's argument, the Panel observed,

That might be so if Respondent could actually show a registration prior to Complainant's, and use or intent to use that did not encroach on Complainant's protected commercial area. The Panel does not agree with Respondent's contention here because Respondent has no use or planned use to support such a claim.

In Grabtaxi Holdings PTE Ltd. v. Syed Javed Hussain, D2016-1855 (WIPO November 21, 2016) (<grabrental.com>, <grabtaxi.me>, <mygrabcar.com>, <mytaxigrab.com>, <sggrabcar.com>, <teksigrab.com>) the Respondent argued that "All of our so called 'disputed domains' are generic and phrased on Common English words." And in Bloomberg Finance L.P. v. Nathan Chapman / None / Website, FA1610001697377 (Forum November 16, 2016) (<bloombergcf.com> and <bloombergcrowdfunding.com>) the Respondent argued that "he intends to make a noncommercial fair use of the disputed domain names as crowdfunding is not part of Complainant's field of activity and had ample time to register the disputed domain names had they been of interest to Complainant." The belief that the act of registering a domain name cannot be evidence of bad faith when it isn't used (that is, doesn't resolve to a website) is totally misplaced.

My last example of surreality is the Respondent's argument in another Bloomberg matter, Bloomberg Finance L.P. v. Robert Drust, FA1609001694567 (Forum October 19, 2016) (<bloombergtrading.com>) that his intended use of <bloombergtrading.com> is "for discussing and teaching individuals the basics of gardening." Well, the manure didn't work!

By Gerald M. Levine, Intellectual Property, Arbitrator/Mediator at Levine Samuel LLP Information about the firm can be found on the Firm’s website at iplegalcorner.com. Mr. Levine has a litigation and counseling practice representing clients in Intellectual Property rights and management, Internet and Cyberspace issues, domain names and cybersquatting.
Related topics: Domain Management, Domain Names, UDRP
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Promoted Post

Buying or Selling IPv4 Addresses?

Watch this video to discover how ACCELR/8, a transformative trading platform developed by industry veterans Marc Lindsey and Janine Goodman, enables organizations to buy or sell IPv4 blocks as small as /20s.