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Balancing Rights: Mark Owners, Emergent Businesses, and Investors

Gerald M. Levine

Is there any act more primary than naming? It comes before all else and makes possible what follows. For the most part, names are drawn from cultural assets: collections of words, geographic locations, family names, etc. They can be valuable, which is why they are guarded, protected, and hoarded. The balancing of rights among those competing for names is a deliberate feature of the Uniform Domain Name Dispute Resolution Policy (UDRP). The jurisprudence is "concerned [quoting from WIPO Final Report at paragraph 13] with defining the boundary between unfair and unjustified appropriation of another's intellectual creations or business identifiers."

While businesses have statutory protection for the names, they use to identify themselves in the marketplace their choices of dictionary words and common expressions (excluding coined words) are nonexclusive. So for example "Prudential," "United," and "American" (to take the most obvious) are shared by many companies in different Classes. Coined words such as Google stand apart. Although it may be said (in a colloquial sense) that dictionary word-marks are "owned", it can never be equated with owning the grammatical constituents from which they are composed. (Virgin Enterprises and Easy Group have no monopoly on the dictionary words "virgin" and "easy" although they and other companies with long and/or deep presences in their marketplaces have been particularly successful in shutting down any use of their dictionary word-marks (combined or not with other grammatical elements) as domain names.)

This sharing of names under the trademark system works because each of the sharers operates in and is confined to Classes that define the metes and bounds of their rights. (Non-shared marks higher on the classification scale can also be lawfully used in combination with other words in both the actual and virtual marketplaces (noted below), so they too are not entirely exclusive.)

Since the Internet is class-less and there are no gatekeepers (as there are in obtaining trademarks), complainants are put to the test of proving breach of registrants' warranties and representations. It is not sufficient merely to show that domain names are identical or confusingly similar to marks in which complainants have rights. For all the successes of major brands in policing their marks, it is not unlawful to register dictionary words or letters as domain names as long as there is no intention to take advantage of or traffic in already established marks.

Just as "sharing" names in commerce is balanced by protecting those with priority of use, so are there tests of rights under the UDRP. Basic to this assessment is a recognition that "[i]n the Internet context, consumers are aware that domain names for different Web sites are quite often similar, because of the need for language economy, and that very small differences matter." Entrepreneur Media, Inc. v. Smith, 279 F.3d 1135, 1147 (9th Cir. 2002).

The boundary that defines "small differences" has been tested in a variety of factual circumstances: dictionary words (<gabs.com> and <reformation.com> and common expressions (such as <orderyour oil.com>) as well as defenses based on nominative fair use or similar concepts under other legal traditions such as "valid and honest competition" discussed below in Franke Technology and Trademark Ltd v. hakan gUlsoy, CAC 101464 (ADR.eu May 11, 2017). The Panel in Gabs S.r.l. v. DOMAIN ADMINISTRATOR — NAME ADMINISTRATION INC. (BVI), CAC 101331 (ADReu February 26, 2017) found that "[t]he word 'gabs' is a common English word based on 'gab', meaning 'talk, prattle, twaddle' (Concise Oxford Dictionary) and it is used to invoke notions such as 'the gift of the gab' and in colloquial words such as 'gabfest' and 'gabble'". It does not strain the language at all to accept that it is used interchangeably as a verb, as in 'talks' or 'prattles.'" Even if the Complainant proved it had priority, it would have nothing to complain about ("the proceeding should never have been brought") because Respondent is not in competition with it and is using a dictionary word for its commonly understood meaning.

In Franke Technology the Panel noted that "no trademark owner (in the EU) . . . has the right to monopolise the servicing or repair or resale (of previously sold) of its products . . . [where another is using the mark to] promote valid and honest competition" citing ECJ_BMW_v_Deenik, C-63/97 (European Court of Justice, 3 December 1998) for the proposition that "the proprietor of a trade mark [is not entitled[ to prohibit a third party from using the mark for the purpose of informing the public that he carries out the repair and maintenance of goods covered by that trade mark.") To be a lawful registration under the UDRP respondents (unauthorized service providers) must meet the test under Oki Data Americas, Inc. v. ASD, Inc, D2001-0903 (WIPO November 6, 2001) (also cited in Franke Technology).

Crossing the boundary (the metes and bounds that define a complainant's rights) is assessed abusive by proof and not by assertion. This principle can be unforgiving.

An example of this is the decision in The Dow Chemical Company and E. I. du Pont de Nemours and Company v. Jung Chang Seap, D2016-0596 (WIPO July 13, 2016) (). The Panel held that "DuPont's rights to DUPONT cannot be reasonably expanded to cover uses of DU alone, a term that can also be viewed as a simple French article. Further, there is no evidence that would suggest that DUPONT is commonly abbreviated or referred to as DU alone."

However one may feel about the holding in Dow Chemical (it has not to my knowledge been challenged in an ACPA action, and there is no evidence of trademark infringement) it exemplifies how the balancing is applied. Complainant has no trademark for "du", and it has no right to monopolize "chemical." In contrast to the Dow Chemical case, there are cases in which complainants are known equally by full as by abbreviated acronymic marks, such as GENERAL ELECTRIC and GE. General Electric Company v. Normina Anstalt a/k/a Igor Fyodorov, D2000-0452 (WIPO July 10, 2000) (<generalelectric.org> and <gewarehouse.com>). The defaulting Respondent is found infringing, and Complainant prevails not because Respondent defaults but because there could be no conceivable explanation for registering domain names identical to Complainant's marks.

Unlike trademark law which precludes competitors from employing an identical mark to one used by another with an earlier presence in the market, under domain name law respondents in the same industry as complainants using dictionary words or common expressions as their monikers (absent proof of direct and knowing competition) can co-exist even though respondent would be unable to get a trademark. Assuming the proper alignment of facts respondents may have rights or legitimate interests to their domain names even though they would be unable to obtain a trademark for the same or similar grammatical constituents. This is illustrated in two recent cases that by happenstance are in the building cleaning area, Anyclean Premium Limited v. Jethro Denahy, Any-Clean, D2017-0581 (WIPO April 28, 2017) (ANY CLEAN and <any-clean.com>) and City Wide Franchise Company, Inc. v. Cheri Quillen / City Wide Janitorial Services, LLC, Claim Number: FA1703001723195 (Forum April 30, 2017) (CITY WIDE and <citywideok.com> the "ok" is for Oklahoma).

In Anyclean Premium, the Panel noted that "the term 'any-clean' comprise two ordinary English words, any' and 'clean'. The Panel considers these could readily be independently derived by a person establishing a cleaning business and sees no reason to doubt the Respondent's account that this is what he did before he had any knowledge of the Complainant, still less of any dispute. The Panel in City Wide similarly concluded that "it is more probable that Respondent, first, did not register or use the domain name with the intention of selling it to Complainant, but rather with the intention of using it for its own business that it was already conducting."

Terms composed of common elements are by definition drawn from the public domain; it is how these terms are employed that determines violation of the UDRP and ACPA. If there is targeting, it must be demonstrated, not simply alleged. In other words, the balancing is achieved by assessing the totality of facts presented by the parties; it is up to the parties to make their case. In Anyclean, the Panel found that "the words 'any' and 'clean' are descriptive when applied to a cleaning business, and in such circumstances the Complainant would need to establish by credible evidence details of it having a significant reputation in those terms before the Panel would be prepared to draw inferences adverse to the Respondent. It has not done so."

The takeaway from these kinds of disputes is that as between marks and domain names there can lawfully be correspondence (confusingly similar if not identical) even if the respondent would be barred from obtaining a trademark. Complainant has the burden of demonstrating the balance tips in its favor.

These evidentiary demands explain the absolute necessity for parties (if they make their case) to fully develop the factual circumstances. Complainants are favored when there is sufficient evidence to conclude that the terms are registered for their trademark values; it favors respondents when the uses indicate otherwise. Unless complainant's proof reaches 51% persuasiveness (a preponderance of the evidence or more probable than not standard), it cannot prevail. Respondents don't have to do anything. But, if the 51% threshold is achievable to avoid forfeiture respondents must themselves offer rebuttal evidence (same standard) sufficient to prevent complainant from crossing the threshold.

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 Names, Intellectual Property, Law

 
   

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