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Making a Strategic Decision: URS or UDRP?

Gerald M. Levine

A discussion is presently underway about the Uniform Rapid Suspension System (URS) (and in Phase 2 next year of the Uniform Domain Name Resolution Policy (UDRP)), whether it is performing as intended. The URS is less than five years old, and there are not an overwhelming number of decisions. Since 2013, rights holders have filed less than one thousand complaints (with three providers, the Forum being the most active), which translates into less than 170 decisions annually, 10 to 15 monthly (of which 10% or less are denied, and approximately 3% withdrawn) (from the Forum, there were more denials at the beginning, less so now). That filing number is minuscule in comparison with the number of complaints filed under the UDRP — in the region of 4,000 annually (in its first years its total was twice the URS in 4 1/2 years) — but the denial and withdrawal percentages are similar.

There is a question rattling around whether the URS is functioning properly (perhaps dysfunctional?), although I think it is really too early to tell. It seems to be functioning well for the purpose intended if that intention is properly understood. The utilization (or under utilization) is not an issue. Rights holders will make a strategic decision about which rights protection mechanism they will use. Instead of looking at what is wrong, I want to look at what is right about the URS. For an understanding of the progress of the URS it is better to take a closer look, not what the whole roster of Examiners is doing, but at a select number who take the time to pinpoint failures of proof (both persuasion and production) and in this way imprint the DNA for the URS. It must be admitted that not all Examiners are responding to their decision-making tasks equally well; some have too little to say about the reasons for their decisions, and fall back on the formula: citing relevant paragraphs of the URS Procedure followed by "Determined: Finding for Complainant." (It is likely that rapidity in filing decisions coupled with meager compensation encourages less thought, even if the result is correct).

The Internet Corporation for Assigned Names and Numbers (ICANN) describes the URS as complementing the UDRP, but it has a more limited jurisdiction, designed specifically for "rights holders experiencing the most clear-cut cases of infringement" and is only available "against domain names registered in a New gTLD" (URS Procedure, para. 3(f)). The Examiner in Virgin Enterprises Limited v. lawrence fain, FA1402001545807 (Forum March 20, 2014) underscored that the "URS process is a narrow one" and that it is "without prejudice to the Complainant… proceed[ing] with an action in [a] court of competent jurisdiction or under the UDRP." (URS, para. 8.5). Rather than the preponderance of evidence standard for the UDRP, Complainants must prove their case by clear and convincing evidence. (The burden of proof matches the announced purpose of the policy). That burden has tripped up at least two Complainants, one with a very well-known if not famous mark and the other a name famous for the iconic mark of his business, Bloomberg L.P. v. zhang guo jie, FA1703001721683 (Forum March 31, 2017) for <bloomberg.space> and Virgin Enterprises for <branson.guru>).

In Bloomberg L.P. the Examiner explained that the "Complaint is, ... devoid of any allegations or proof of facts tending to show, even prima facie, either that Respondent has no right to or legitimate interest in the <bloomberg.site> domain name, or that the domain name was registered and is being used by Respondent in bad faith. For the same reason, incidentally, the Complainant was denied in a later UDRP case, Bloomberg Finance L.P. v. zhang guo jie, FA1704001727926 (Forum June 8, 2017) (<bloomberg.site>). Both Examiner and Panel came to the same conclusion, namely that "Accordingly, on the record before us, we cannot conclude that Respondent has no right to or legitimate interest in the domain name or that the domain name was registered and is being used by Respondent in bad faith."

There is no question that unexplained holdings fall short of the educational goal expected of filed decisions. The purpose of having accessible decisions (even if not reasoned to the same extent as is the practice of the best UDRP Panels) is to educate parties, their counsel and representatives about the different and stiffer demands of the URS and prepare them for asserting and defending their rights. In this respect, it could be said an unthought-through decision short-changes users (rights holders as well as respondents). However, having said this, there are a good number of explained, thought-through decisions (even if not fully reasoned) like Bloomberg L.P. and Virgin Enterprises that lay a proper foundation for establishing consistency and predictability in the application of the URS.

URS Examiners have a great advantage in not having to reinvent a jurisprudence of domain names. They have ready-made a powerful resource for illuminating the reasons for a party's success or failure of proof by turning to easily accessible, reasoned decisions from UDRP Panels. This has been supplemented since 2005 by an "overview" of the jurisprudence published by the World Intellectual Property Organization (WIPO) — the WIPO Overview of WIPO Panel Views on Selected UDRP Questions, now in its third edition (2015). There is, in fact, a mature jurisprudence of domain names from UDRP decisions, although whether this jurisprudence is transferrable to the URS is an open question that will have to be answered as "probably not."

Certainly, the combination of URS features plays a role in restraining rights holders from using it and favoring the UDRP. But, the URS nevertheless is a remarkable tool for the purposes for which it is intended. I pointed out in a recent essay (What is the Uniform Rapid Suspense System and What is it Good For?), that it can be used as a substitute for a preliminary injunction. In fact, some rights holders have specifically used the URS in this manner by shutting down counterfeit goods websites by having the domain names suspended. W.L. Gore & Associates Inc v. WhoisGuard, Inc. et al., FA1711001758178 (Forum December 6, 2017) (<goretexgiyim.world>. ”[T]he impression created by ... Registrant's website is [that it is] an original online shop of the Complainant with even more convenient prices but offering counterfeit products"); Eli Lilly and Company v. Shaternik et al., FA1705001731038D (Forum June 1, 2017) (Offering counterfeit products on dozens of websites). Also, some phishing and spamming websites have been silenced in this manner, more quickly and less expensively than through the UDRP.

While the URS is quick out of the gate and moves rapidly to award (typically, twenty days) an initial award is subject to being vacated under two circumstances: 1) if post-default the Respondent appears with a meritorious defense or its counter contentions are sufficient to raise a triable issue of fact, and 2) the losing party appeals with new facts and arguments that result in an award being reversed. Reversals are sometimes in Complainant's favor — Aeropostale Procurement Company, Inc. v. Michael Kinsey et al., FA1403001550933 (Forum April 28, 2014) (<aeropostale.uno> Initially denied; reversed and suspended on appeal and LVMH SWISS MANUFACTURES SA v. GiftSMS et al., FA1509001637103 (Forum November 24, 2015) (<tagheuer.digital>. Initially denied; reversed and suspended on appeal: "The Respondent claimed that the disputed domain name was available for purchase in the commercial market once the sunrise period expired.... However, trademark rights are not released or waived as a result of the passage of the Sunrise period or for that matter any other period relating to the registration of domain names. In Aeropostale Procurement the Examiner concluded that "The rule stemming from URS 1.2.6.3 (d) is satisfied since the Respondent admitted that he has registered the domain to take 'an opportunity similar to when .com first came into existence' so purely for a reason of expected gain resulting from using the 'AEROPOSTALE' mark."

Sometimes the initial denial is affirmed in Respondent's favor, for a familiar reason that is well established in UDRP jurisprudence. In Grey Global Group LLC v. i-content Ltd. et al., FA1606001681062 (Forum July 8, 2016) (<grey.email>), the Examiner stated that :

Given that the Domain Name, in fact, corresponds to a generic term, that the Respondent has registered numerous similar generic domain names, such as <white.email>, <martin.email>, <hans.email>, or <one.email>, that the Domain Name was used in connection with a parking website with sponsored links using the term "grey" solely in a descriptive way and not in connection with the Complainant's services, and that the Complainant has not provided evidence as to its business activities in Germany, where the Respondent is located, the Examiner finds that the evidence is not clear and convincing that the domain name was registered in bad faith.

The initial denials in Aeropostale Procurement and Lvmh Swiss Manufactures present an interesting distinction between the URS and UDRP. URS Procedure, para. 12.2 and URS Rules, 19(b) provide that "Appellant shall have a limited right to introduce new admissible evidence that is material to the Determination ... provided the evidence clearly pre-dates the filing of the Complaint” (Emphasis added). Under the UDRP, complainants either get it right the first time or their complaints are dismissed and res judicata as far as returning to the UDRP is concerned.

For Complainants who want instant gratification and have no interest in carrying the expense of maintaining identical or confusing domain names into infinity, the URS supplies it for ninety plus percent of the disputes for which respondents have no defensible right to the domain names and invariably default in appearance. For this class of dispute involving well-known and famous marks, the offending domain names are suspended for the duration of the registration (and for another year at Complainant's option), and if they resolved to active websites, shut down.

What can be said about consensus? Since the URS employs the same language as the UDRP for the tiered requirements: standing, demonstrating Respondent's lack of legitimate rights or interests, and conjunctive bad faith, Examiners can rest on authority from UDRP jurisprudence whether or not they actually cite to it. For the first limb, for example, Complainants can only maintain a proceeding if they have standing; if they are unable to prove registered marks in commercial use, they lose. Example: Sks365 Malta Ltd., MT v. Mansour Ben Khamsa, D5C230DE (MFSD December 28, 2016) failed to show it currently held any trademark rights "on the sign 'planet win 365'") (this link is to a list of a dozen or so decisions wherein there is an internal link to a pdf).

For the second limb, Complainant must prove lack of legitimate interests or rights by clear and convincing evidence (which is two notches higher than the UDRP). This leads to some interesting differences with the UDRP. If the domain name is passively held and can plausibly be used for non-infringing purposes (whether the Respondent appears or defaults) the complaint will be found deficient of clear and convincing evidence. In contrast, UDRP Panels are more likely to move on to the third limb before drawing conclusive inferences. Example: HOLA S.L. v. North Sound Names et al., FA1407001570171 (Forum August 9, 2014) (<hello.photo>) in which the Examiner held (relying on authority from UDRP decisions) that

Previous decisions involving domain names based on generic, commonly used terms are consistently denied, protecting the right of domain registrants to retain such domains against trademark owners." The Examiner than cites a dozen cases before explaining that "for the complainant to prevail, there must be some other proof to evidence bad faith, such as actual notice of trademark prior to registration (<ancestry.com> FA140500 1560028) or evidence of a pattern of registering domains using protected marks ( FA1203001435300).

For the third limb, Complainant must prove conjunctive bad faith. Example: Wikimedia Foundation, Inc. v. WhoisGuard, Inc., FA1804001780755 (Forum April 26, 2018) (<Wikipedia.kim>. The Examiner

deplores the fact that the Complainant has not submitted any evidence supporting its claim of bad faith use and registration. The Examiner would have expected the Complainant to provide evidence of, for instance, the website associated with the disputed domain name. The Examiner notes that the Complainant submitted a screenshot of its own website (associated with its own domain name <Wikipedia.org>), but not of the Respondent's website (associated with the disputed domain name <Wikipedia.kim>").

The cited decisions underscore that the URS 1) delivers on its promises to grant relief rapidly (faster in fact than could ever be expected from a motion for preliminary injunction in shutting down counterfeiting websites or even phishing and spamming under the UDRP) and 2) is severe on Complainants who fail to understand its demands. It is not time for buyer's remorse!

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, as well as a diverse range of legal and business matters from working with client to resolve commercial disputes, to copyright and trademark counseling and registrations. Visit Page
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