The Case of Trademarks Rights Coming into Existence After Registration of the Domain Name

There appears to be an uptick in the number of cases brought by owners who acquired their trademarks after the registration of the domain name. These complainants have standing but no actionable claim under the UDRP, for the reasons stated in the WIPO Overview 2.0: “Generally speaking, although a trademark can form a basis for a UDRP action under the first element irrespective of its date … 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.”

One of the differences between the UDRP and the Anticybersquatting Consumer Protection Act (ACPA) is the threshold of standing. Under the UDRP the complainant only has to demonstrate that it has a right when it files the complaint. With the ACPA, the mark has to be “distinctive [or, in the case of a famous mark, famous] at the time of registration of the domain name.” 15 U.S.C. §1125(d)(1) (A). The timing of distinctiveness was an early issue under the UDRP. Some panelists took the position that the timing of the right determined standing. This is illustrated, for example, in Firstgate Internet A.G. .v. David Soung, D2000-1311 (WIPO January 29, 2001):

Whilst the Panel agree that this issue [of the timing of distinctiveness] is not necessary to its Decision, given its view on complainant’s failure to satisfy the third element of paragraph 4(a) of the Policy, they disagree as to when trademark rights must exist for the requirements of paragraph 4 (a)(i) of the Policy. The Presiding Panelist and Panelist Chrocziel believe that such trademark rights must be in existence at the time the domain name is registered, i.e. here March 6, 2000. Panelist Creel believes that such trademark rights need only exist at the time of the Complaint.

Panelist Creel’s view prevailed as we see in the WIPO Overview.

The losing complainant in a year-plus old decision has just filed a federal complaint alleging as it did in the UDRP proceeding that (in effect) it has a better claim to the domain name than does the holder. BidPal, Inc. v. InterMediaOne, FA121000146833 (Nat. Arb. Forum December 14, 2012). Its federal action was filed February 5, 2014, 14-cv-00168 (S.D. of Indiana). The UDRP decision was by a unanimous three member Panel. Complainant alleged that the “disputed domain name simply resolves to a placeholder page with the Registrar and contain no original content. The Panel’s unsurprising response to this is that “even if [the Respondent] had not been able to prove the use of the Disputed Domain Name, [it] finds that it is not considered a violation of the Policy just to register a domain name and not give it an active use.”

In the federal action, the plaintiff takes a new tack: “The Infringing Domain Names were Registered and/or Renewed in Bad Faith.” The consensus under the UDRP is that renewal does not equal registration but is a continuation of it. There appears to be a split on this issue under the ACPA between the Third and Ninth Circuits. See Twitter, Inc. v. Geigo, Inc., D2011-1210 (WIPO November 2, 2011) (3-member Panel). The Panel observed that

A UDRP panel owes great deference to the national courts. Their rulings may well be part of “applicable law” that a panel must consider (Rules, paragraph 15(a)), may become directly relevant in relation to mutual jurisdiction in the event of a court challenge (Policy, paragraph 4(k)), and are forged upon a record developed through full adversary proceedings. Nevertheless there are occasions when a Policy panel may decline to follow a court’s interpretation. The Schmidheimy case [Schmidheiny v. Weber, 319 F.3d 581 (3rd Cir. 2003)] cited but not followed by the Ninth Circuit and its reasoning [in GOPETS Ltd. v. Hise, Digital Overture, Inc., 657 F.3d 1024 (9th Cir. 2011)] offer grounds for this Panel to follow the Third Circuit’s holding. These two courts are co-equal; any difference in their rulings can only be resolved by the Supreme Court of the United States or superseding legislation. This Panel finds the Third Circuit’s reasoning in Schmidheimy more convincing than the Ninth Circuit’s in GoPets.”

An unresolved issue is whether the renewal of a domain name initially registered before the existence of a trademark–therefore no bad faith–is subject to forfeiture after renewal of registration for subsequently using the domain name in bad faith. There are several circuit decisions that have found for the owner where the trademark predated a disputed domain name that was originally registered and used in good faith but was subsequently used in bad faith, then renewed. The district court in which BidPal has filed its complainant, Indiana, is in the Seventh Circuit. This will be an interesting case to follow!

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