Inadvertent Lapse of Both Trademark Registration and Domain Name

Falling out of the trademark registry for failure to file a section 8 affidavit may be embarrassing but not fatal; losing a domain name for inadvertence may be fatal depending on the strength or weakness of the trademark. In the canon of defenses, however, lapse does not prejudice a complainant’s standing to challenge a domain name holder. In Department of General Services, State of Maryland v. Domain Privacy Group, FA130300 1488524 (Nat. Arb. Forum April 2, 2013) Complainant’s trademark EMARYLAND MARKETPLACE was cancelled on October 5, 2012: the cause, “changeover in State personnel.” The Maryland Department of General Services re-applied for the trademark on February 13, 2013. Respondent jumped on the expired domain name immediately upon lapse.

In response to a cease and desist letter from the Department dated October 17, 2012, Respondent took a position that failure to renew a domain name was fatal: “all ownership rights [said the Respondent] are thereby relinquished and the name is placed back into the public pool of names – which are then available for purchase by anyone choosing to pay for such ownership and all the rights which accompany same.” As the Panel rightly pointed out acquiring domain names following their non renewal is not unusual, but

a party in the position of Complainant, or indeed any other party that believes it has a right to the domain name [as a trademark owner] is still able to file a Complaint under the UDRP and such a claim is then judged on its merits. That is the process that is presently under way.

A second prong of Respondent’s argument that Complainant has no trademark because it was cancelled is equally meritless. Cancelled trademark registrations do not cancel established trademark rights, even though it may make a party vulnerable.  This is so for the reason stated by the Panel:

[I]t is now well established that under the UDRP a party can make out a claim for a common law or unregistered trademark and that is what has happened in the present case. It is not always easy to see if a common law or unregistered trademark has been made out, but in the present case the Panel has concluded that a case can be made out, mainly because the registered service marks, while they were registered, were widely used and over a considerable period of time and must have become known in the commercial community as they means by which the State of Maryland provided one of its important services, namely procurement. Moreover, it should be noted that EMARYLAND MARKETPLACE has been legislated for by name and the Panel should not lightly disregard that fact.

The third prong of Respondent’s argument addresses concern of the State of Maryland that use of the disputed domain name may “be misleading to consumers, be in violation of federal cyberpiracy law, or an infringement of the trademark held by the State of Maryland”:

Respondent in that regard argues that it intends to use the domain name for other purposes, that it is not misleading internet users, email traffic is redirected to a new State of Maryland website and that it has put a disclaimer on its website.

The Panel’s response is that while

[e]ach of these steps has its own value … the difficulty with all of them is that they do not rebut the concern, which is really that Respondent is holding a domain name that would be understood by many people to be a State instrumentality providing State services, whereas at the present it appears to be a private service offering clearly commercial services and services that the State is not permitted to offer. It should be added that the disclaimer is not of much effect because of its position on the website.

It may be true that under certain circumstances a purchaser of an expired registration is given the benefit of the doubt particularly where the parties are distant from each other and the trademark is descriptive of generic products or services. There are many examples of this in the UDRP database, but not where the evidence establishes that the trademark is anchored to services in a particular geographic location in which both parties reside. To intend to develop around an acquired domain name a “‘stealth’ start up company” directed to the same community of businesses who formerly used it immediately falls foul of paragraph 4(b)(iv) because any use “creat[es] a likelihood of confusion with the complainant’s mark as to the source, sponsorship, affiliation, or endorsement” of respondent’s product or service. “Intentionality” can be inferred from intended use where the trademark is well-known at the time complainant’s registration inadvertently lapsed.

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