Principles, Factors, and Elements that Promote or Undermine the Outcome of UDRP Cases

By Gerald M. Levine
Gerald M. Levine

Panels adjudicating cybersquatting claims, defenses, and rebuttals under the Uniform Domain Name Dispute Resolution Policy (UDRP) expect parties to prove their contentions, and this means having a working understanding of what this entails. There is, first, a set of fundamental rules or principles — such as pending applications for a mark do not constitute a right, or recognizing unregistered marks as constituting rights under paragraph 4(a)(i) of the Policy; or accepting a prima facie showing that respondent lacks rights or legitimate interests as conclusive under paragraph 4(a)(ii) absent persuasive evidence to the contrary; or use in bad faith is not limited to active websites, paragraph 4(a)(iii). The development of principles was contemplated by the WIPO Final Report, 150(5):

[I]t is desirable that the use of the administrative procedure should lead to the construction of a body of consistent principles that may provide guidance for the future."

This has, in fact, come about.

In addition to principles, there is a set of factors which I like to think of as hinges because ultimately claims, defenses, and rebuttals hinge on them. Factors include strength or weakness of marks and their lexical compositions (dictionary words, descriptive phrases, acronyms); the location of the parties; the timing of the respective acquisitions of domain names and marks. Marks composed of lexical strings that are not particularly associated with complainants cannot possibly be in violation of the Policy. Thus, Blue Star Limited v. Blue Star International, CAC 101582 (ADR.eu August 22, 2017) for descriptive phrases and NTI Cadcenter A/S v. Domain Admin, Ashantiplc Limited, CAC 101591 (ADR.eu September 21, 2017) for random letters. In the case of NTI Complainant claimed a common law right in the three letters but lacked proof of any reputation that would have put Respondent on notice of its right. Establishing a reputation is a factor, a hinge; a party may have a present reputation but none when the domain name was registered.

A third set consists of elements. These are found within the Policy requirements. For example, the domain name has to be identical or confusingly similar to the mark. If it is neither complainant has no standing to complain — Fabricators & Manufacturers Association, International v. NameFind, FA 1728625 (Forum June 1, 2017) (THE FABRICATOR and <fabricator.com>). Other elements include the circumstances spelled out in subparagraphs 4(b)(i — iv) and 4(c)(i — iii) of the Policy. For example, offering the domain name for sale to the mark owner is evidence of abusive registration under subparagraph 4(b)(i) (although it is not bad faith if the complainant approaches respondent to negotiate a sale) while evidence of fair use (as criticism) supports lawful registration under subparagraph 4(c)(iii) of the Policy.

Particularly with factors parties, must recognize what they are for the specific factual matrix of their cases if they are to prevail. Complainants do not succeed by having trademarks (BLUE STAR); and respondents do not forfeit their domain names by defaulting in appearance (Ajnaware Pty Ltd v. Domain Administrator, FA170800 1744102 (Forum September 25, 2017).

I do not mean to suggest that these sets are hermetically sealed; some principles are also factors and factors can also be thought of as elements (even though not specifically demanded in the Policy).

The first UDRP complaint was filed in December 1999, World Wrestling Federation Entertainment, Inc. v. Michael Bosman, D1099-0001 (WIPO January 14, 2000). It is the plainest of plain vanilla cases: the second level domain was identical to Complainant's mark, Respondent (who did not appear) offered to sell the domain name to Complaint, and the proof established cybersquatting. What is memorable about the case is that the Panel ruled that to prevail in a UDRP dispute complainant must prove both registrations in bad faith and use in bad faith. This conjunctive requirement can be thought of as the first principle of domain name jurisprudence, namely that bad faith registration alone is insufficient to support cybersquatting although it can be inferred from bad faith use.

World Wrestling was also plain vanilla in that the mark was well-known and distinctive when Respondent registered the domain name. Cases of this kind represent 90% or more of the UDRP docket; respondents rarely appear, there is no counter-narrative, and the domain names are canceled or transferred. Examples drawn at random are Comerica Bank v. Micheal Ard, D2017-1487 (WIPO September 14, 2017) (COMERICA and <comericacashloans.com>); Ubisoft Entertainment v. Josephine Smith, D2017-1402 (WIPO September 4,2017) (JUST DANCE and <justdancelive.com>) The additions of "cash loans" and "live" do not create new associations (which could be a factor in determining rights or legitimate interests) but reinforces Complainants' products or services).

Moving away from the plain vanilla are disputes in which marks are distinctive but not well-known or, well-know but unregistered. The factors are strength and composition of marks, respective locations of the parties, reputation of the mark when domain name was registered, the kinds of goods or services offered, and the content of the resolving website. In the absence of a strong showing of goodwill and reputation, a respondent's explanation for its acquisition can make a difference to the outcome of the dispute. This is the gist of the Panel's findings in Real Estate Edge, LLC. v. Rodney Campbell, D2017-1366 (WIPO September 5, 2017) (GREATER AUSTIN REALTY and <greateraustinrealty.com>):

As viewed by the Panel, the Complaint does not make out a particularly strong case. The Complainant's service mark does not appear to be especially well-known within Austin, Texas, that both the Complainant and the Respondent inhabit. Moreover, being composed of one geographical and two dictionary terms, the mark is not particularly strong on its own. Furthermore, even though it has established valid service mark rights, the Complainant has presented neither assertions nor any evidence whatsoever of the extent to which it has used the GREATER AUSTIN REALTY mark for business purposes.

The Panel concluded that having proof of these facts is "critical if the Panel is to assess rights and interests in a domain name relative to such a descriptive service mark." Complainants of weak and unregistered marks must show the domain names were registered with them specifically "in mind," which is difficult if the marks are composed of generic and descriptive elements.

The same issues are raised in Altamira Asset Management, S.A. v. Luis G. Mota, D2017-1298 (WIPO September 11, 2017) (ALTAMIRA and <altamirarealestate.com>). The parties reside on different continents (a factor) and there was no evidence the registration was capitalizing on the mark (another factor). The "distance" factor was not considered, but without addressing it Complainant could not possibly prevail.

As long as complainants' marks predate domain name registrations complainants have actionable claims, but none if the marks postdate the registration. These complaints must fail because of the first principle, conjunctive bad faith, and first factor, namely priority. Ajnaware, supra (Respondent did not appear but prevailed); FIBO Consulting, LTD v. MohammadReza FakhrMoghaddam, FA1708001744548 (Forum September 15, 2017) (FIBO and <fibogroup.org>); Shesafe Pty Ltd v. DomainMarket.com, D2017-1330 (WIPO August 22, 2017) (SHESAFE and <shesafe.com>).

Shesafe also illuminates other factors. When Respondent (an investor) registered the domain name Complainant had no market presence, but even it had an earlier use in commerce with a common law mark, infringement of a right depends on the infringer having knowledge of the mark's existence. "Knowledge" or "awareness" of the mark is a critical factor. The Panel held that it could not "discern any basis for finding that the Domain Name was registered in bad faith." On the contrary, it found that "the Domain Name was acquired bona fide by the Respondent as a domain name that might be of value on account of its descriptive elements" (my emphasis).

Before Respondent-investor received the complaint, it was offering the domain name for around $10,000 dollars. Following denial of the complaint, the value of the domain name escalated into the stratosphere as graphically described in a post on DomainGang:

Since the decision, Mike Mann has jacked up the price tenfold, seeking now no less than $94,888 dollars! (Bold in the original).

"Jacking up" the price is only a factor when the registration of the domain name is unlawful, but is not a factor when the domain names is acquired "for its descriptive elements." The situation would have been different if Complainant had proved unregistered rights. That sound you hear is Complainant gnashing its teeth.

It must be a party's first duty to ask itself, what do I have to prove? What factors will a Panel be expecting me to prove? If I don't have a registered mark can I prevail on a common law theory? It is not just "first use" in commerce that has to be proved but reputation. (Complainant in Shesafe did not consider the critical factors so presumably, it had no common law rights).

As marks descend to the weaker end of the classification scale, complainants must work harder on the factors. Dictionary words, alone or combined, and descriptive strings of characters as marks are particularly vulnerable. In Blue Star, supra Complainant did not have the evidence it needed to persuade the Panel that was registered in bad faith. The Panel pointed out that there is "a very wide range of uses of the phrase BLUE STAR in commerce . . . by (it appears) the Respondent, and by many others." Even though Respondent did not appear there was evidence on the resolving website that undercut Complainant's allegations:

[T]he Complainant makes an expansive and not wholly persuasive case regarding the uniqueness of the phrase and the existence of common law rights. The Complainant appears unaware of the great number of other marks containing the text BLUE STAR in a range of industries and trademark classes around the world.

Complainant failed to pay attention to two factors, namely "ubiquity" in the use of an adjectival phrase adopted as a mark and protection of its credibility by making easily refutable statements. The claim for "uniqueness" is undercut by use "in a range of industries and trademark classes around the world." There is no evidence Respondent chose the domain name with Complainant's mark in mind. The Panel denied the complaint on credibility grounds for (among other reasons):

contrary to the assertion of the Complainant, a website is and has been [in] operation at the disputed domain name throughout the period of registration, providing what appears to be accurate information regarding the activities of a company with the same name as that used in the disputed domain name.

I have focused particularly on factors because, as I mention, they are the hinges that determine cybersquatting or lawful registration of domain names. There's a kind of inevitability in the adjudication of disputes, that when the record is silent on proving certain factors, the party that must present them will lose.

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, Law, UDRP

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