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Charting the Balance between Trademark Owners and Domain Name Holders: A Jurisprudential Overview

Gerald M. Levine

Efforts to combat cybersquatting began in earnest in 1998 when the World Intellectual Property Organization (WIPO) (at the request of the United States Government supported by all member states) began an extensive process of international consultations "to address cross-border trademark-abusive domain name registrations." I'm quoting from WIPO's newly released Third Edition of the Overview of WIPO Panel Views on Selected UDRP Questions: ("WIPO Jurisprudential Overview 3.0") (May 2017). The extensive process concluded in the Spring of 1999 with WIPO publishing a detailed report, The Management of Internet Names and Addresses: Intellectual Property Issues, Final Report of the World Intellectual Property Organization Internet Domain Name Process (April 30, 1999) (Final Report) followed in the Fall by the Internet Corporation for Assigned Names and Numbers (ICANN) adopting and implementing the Uniform Domain Name Dispute Resolution Policy (UDRP).

The UDRP is a simple-worded, non-territorial, specialized forum for adjudicating claims of cybersquatting. It is conducted wholly online. It is not a trademark court. If there's any analogy with litigation, it is that the complaint should be treated as a motion for summary judgment. Whether there is cybersquatting depends on arbitrators (called Panels) applying core principles to the particular facts that have been brought to their attention. The record is paramount; silence (failure to make a case) is deadly.

On UDRP's emergence, the meaning of its prescriptions/proscriptions meant only what could either be construed from its language or drawn from the consensus reflected in the Final Report. Thus, for example, in the very first decision in January 2000, the Panel construed Paragraph 4(a)(iii) of the Policy as requiring the complainant to prove respondent (that is the registrant of the domain name) both registered the domain name in bad faith and used it in bad faith. In 2009 the same panelist changed his mind. But it was already too late because the construction had hardened into the jurisprudence we now have. The consensus among panelists is that conjunctive bad faith was for the better. I tried to explain this in a recent essay, Core Principles of Domain Name Law). The conjunctive model was the oxygen needed to create a totally new market in domain names. (Oddly, the phrase "conjunctive bad faith" is not found in the Third Edition).

What WIPO gives us in the Third Edition is a synthesis and restatement of Panel views on a limited number of issues. What should be understood is that the jurisprudence didn't come fully formed and it's not finished. It is the creative work of many panelists construing the simple commands of the Policy. The Third Edition calls itself a "Jurisprudential Overview" and weighs in at 155 pages. It significantly expands on the Second (2011) (26 pages) and First or Original (2005) (a mere 14 pages) editions. While it expressly "supersedes" it does not literally replace the Original and Second Editions; both remain available online.If I have complaints or express a preference for some language in the Second Edition or point out editorial decisions that I think should be rethought it is not in criticism because overall the Third Edition is a welcome addition to WIPO's palette of research tools.

As the editors point out in the Introduction to the Third Edition, "the UDRP does not operate on a strict doctrine of binding precedent." Nevertheless, "it is important for the overall credibility of the UDRP system that filing parties can reasonably anticipate the result of their case." This tension is accommodated by a consensus that relies heavily on precedent. No trademark owner prevails because it owns a trademark; and no domain name holder loses because it holds a domain name identical or confusingly similar to a mark in which a complainant has a right. The concept of the UDRP is a balancing of rights.

The editors do not (as they did in the Original and less so in the Second) emphasize that on some issues panelists differ in their views. In the area of free speech, for example, there was a View 1 and a View 2; and on other issues, there were "majority" and "minority" views. These classifications are missing from the Third Edition, and I think this omission should be rethought. It is important for parties to understand there are different views.

In the Original Edition, these different views were clearly marked. So, for example:

1.1 Does ownership of a registered trademark to which the domain name is confusingly similar automatically satisfy the requirements under paragraph 4(a)(i) of the UDRP?

Consensus view: If the complainant owns a registered trademark then it satisfies the threshold requirement of having trademark rights. The location of the registered trademark and the goods and/or services it is registered for are irrelevant when finding rights in a mark.

1.3 Is a domain name consisting of a trademark and a negative term confusingly similar to the complainant's trademark? ("sucks cases")

Majority view: A domain name consisting of a trademark and a negative term is confusingly similar to the complainant's mark. Confusing similarity has been found because the domain name contains a trademark and a dictionary word; or because the disputed domain name is highly similar to the trademark; or because the domain name may not be recognized as negative; or because the domain name may be viewed by non-fluent English language speakers, who may not recognize the negative connotations of the word that is attached to the trademark.

Minority view: A domain name consisting of a trademark and a negative term is not confusingly similar because Internet users are not likely to associate the trademark holder with a domain name consisting of the trademark and a negative term.

Because Panels continue to express these different views, I think the classifications would be helpful. There can be no dispute that on some issues it makes a difference which Panel is drawn. We have seen this most spectacularly with UDRP awards that have met different fates under the Anticybersquatting Consumer Protection Act (ACPA). Parties should know that different Panels have different views. View 1 of paragraph 2.4 (criticism) reads: "The right to criticize does not extend to registering a domain name that is identical or confusingly similar to the owner's registered trademark or conveys an association with the mark," while View 2 reads: "Irrespective of whether the domain name as such connotes criticism, the respondent has a legitimate interest in using the trademark as part of the domain name of a criticism site if the use is fair and non-commercial." I sorely miss the classifications in the Third Edition.

I miss also not having an index. While the interior hyperlinks in the Third Edition help navigate terms online, they are not helpful with a paper copy. There are also some missing terms that I would have liked to see such as (not a complete list) "opportunistic" and "conjunctive" (in third group), and "certification" (in the procedural group). Complainants have lost for false and unreflective certification, and respondents have kept their registrations for complainant's failure to prove conjunctive bad faith.

I also looked for "theatre" under identity or confusing similarity (paragraph 1.2 Second Edition) and "Plan B" under reverse domain name hijacking (Paragraph 4.16) (there's no reference in the Second Edition because Panels only began using the term in 2016). I miss the "theatre" discussion (letters corresponding to a mark within the domain names, here it would have been HEAT). Arguably, this one is a little bit whimsical. However, one hopes "conjunctive," "opportunistic" (or "opportunism"), "certification", and Plan B will make it into the Fourth Edition, and please restore "theatre."

As in the earlier editions, there are four groups of questions, namely "First UDRP Element," "Second UDRP Element," "Third UDRP Element," and "Procedural Questions." (Substantive questions are answered in the first three groups). My comments will be limited to the first three groups:

In the first group, there are two different either/or possibilities: domain names are either identical or confusingly similar to trademarks in which complainants have rights; or complainants either have rights or they do not. The first either/or includes the possibility that domain names may be similar to trademarks but not confusingly similar. That is, they may share grammatical parts without being actionable. For the second either/or the editors of the Third Edition have tweaked the Second as follows:

[Second] 3.1 Can bad faith be found if the disputed domain name was registered before the trademark was registered or before unregistered trademark rights were acquired?

Consensus view: Generally speaking, although a trademark can form a basis for a UDRP action under the first element irrespective of its date [see further paragraph 1.4 above], when a domain name is registered by the respondent before the complainant's relied-upon trademark right is shown to have been first established (whether on a registered or unregistered basis), the registration of the domain name would not have been in bad faith because the registrant could not have contemplated the complainant's then non-existent right.

[Third]

3.8.1 Domain names registered before a complainant accrues trademark rights

Subject to scenarios described in 3.8.2 below, where a respondent registers a domain name before the complainant's trademark rights accrue, panels will not normally find bad faith on the part of the respondent. (This would not, however, impact a panel's assessment of a complainant's standing under the first UDRP element.)

Unless the justification is established (3.8.2), the complainant will have standing but no actionable claim. This differs from the Anticybersquatting Consumer Protection Act that requires the mark to be distinctive before the registration of the domain name.

The second group focuses on the issue of rights or legitimate interests. A respondent either has or has not one or the other. Generally, Panels do not differentiate between "rights" and "legitimate interests", and neither does the Third Edition, but there is a difference even if in most circumstances it is a difference without consequence. Respondents may be found to have neither rights nor legitimate interests, but that is not conclusive of bad faith; that must independently proved. A particularly important difference between the Second and Third Editions is its treatment of investors. Third Edition Paragraph 2.1 acknowledges as the Second Edition does not that "generally speaking, panels have accepted that aggregating and holding domain names (usually for resale) consisting of acronyms, dictionary words, or common phrases can be bone fide and is not per se illegitimate under the UDRP." Further examples are given in 2.10.

The third group focuses on the issue of bad faith. In this group, there is no either/or. The model demands proof of conjunctive bad faith. If there is no bad faith registration, the complaint must be dismissed. The Second Edition gave prominence to a concept that over the past several years has been roundly rejected, An important withdrawal of support concerns a concept known as "retroactive bad faith" which the Second Edition gave prominent attention to (Paragraph3.1):

Furthermore: Irrespective of whether the domain name was registered before the relevant trademark was registered or acquired, a small number of panels have begun to consider the effect of the requirement of paragraph 2 of the UDRP, which states: "By applying to register a domain name, or by asking us to maintain or renew a domain name registration, you hereby represent and warrant to us that . . . (d) you will not knowingly use the domain name in violation of any applicable laws or regulations. It is your responsibility to determine whether your domain name registration infringes or violates someone else's rights." Some panels have regarded this as a warranty at the time of registration that the domain name will not be used in bad faith, finding that, by breaching such warranty, use in bad faith may render the registration in bad faith. Other panels have looked at the totality of the circumstances in assessing "registration and use in bad faith," as a unitary concept, given that some of the circumstances listed as evidence of bad faith registration and use in paragraph 4(b) of the UDRP appear to discuss only use and not registration. Still, other panels that have considered these approaches have instead reaffirmed the "literal" interpretation of bad faith registration and bad faith use regardless of paragraphs 2 or 4(b) of the UDRP. This is a developing area of UDRP jurisprudence.

In the Third Edition this prominence is reduced to the following statement:

NB, a number of cases in 2009 and 2010 (including Mummygold, Octogen, Parvi, and Jappy) explored application of registrant representations in UDRP paragraph 2 in finding so-called "retroactive" bad faith registration; while this particular concept has not been followed in subsequent cases, UDRP paragraph 2 may be relevant on its own terms.

In fact, the retrospective bad faith concept as articulated in Mummygold and Octogen is a dead end.

All in all, though, the Third Edition is welcome. It takes time and effort to understand the jurisprudence and what is fully demanded of a party in terms of the evidentiary requirements. It is not an easy task to explain this. That is why this synthesis of views is so important. It is a continuing attempt to open up dark areas of substantive and procedural law as it applies to domain name claims.

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: Cybersquatting, Domain Names, UDRP

 
   

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