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Abuse of Process in a UDRP Proceeding

Abuse of process in a UDRP proceeding carries risk for reverse domain name hijacking if respondent appears and proves complainant has falsified the facts. There have undoubtedly been cases in which complainant prevails solely because respondent has defaulted — let us call it the “no show” strategum — where a defense may have changed the result. There are a number of recent examples of complainants relying on the trategum where respondent show up. Statistically, respondents default approximately 85% of the time and mainly prevail. Of the 15% of respondents who appear and defend a significant percentage of complaints are dismissed.

There is good reason in many of these disputes for “no show.” This is indicated by a quick review of the domain names incorporating well known and famous trademarks or if lesser known populating websites with links to goods or services competitive with complainant: <chevronpetroleum.com.co> (doubling the tlds), <huffingtonpost.xyz> (adding a newly approved tld), <morganstanleysinc.com> (typosquatting with an extra “s”), <novarti.com> (typosquatting by omitting the “s”), <lifecellbeauty.com> (adding a dictionary word to the trademark appropriate for the goods complainant offers), etc.

This compares with respondents holding domain names composed of dictionary words [<verb.com>], geographic locations [<puket.com>] or phrases applied to their own businesses [<clearwatersystems.net> and <globeway.com>] where there is no evidence of targeting. Complainant in one of the four cases discussed here commenced the proceeding by betting respondent will default so its false facts would remain hidden. The other cases illustrate overreaching, leading to findings of reverse domain name hijacking. These cases are representative. In the past week several other examples have been added.

The four matters involving dictionary and geographic words and generic phrases illustrate the kind of overreaching frequently found in UDRP cases. In IMB Textil S.A. v.Domain Administrator, Name Administrator Inc. (BVI), D2014-1057 (WIPO September 5, 2014) Respondent told Complainant in a pre-filing communication after unsuccessful negotitions to purchase the domain name that “Puket” was an alternative spelling to “Phuket” a geographical location of a well-known resort island in Thailand. The panel questioned why IMB Textil failed to address the use of Puket.com to provide links to topics related to the place, even after being advised of this defense:

Thus, the Complainant was warned before it filed the Complaint what the Respondent’s defence would be. Having received that warning, the Complainant could have taken fairly rudimentary steps to investigate the Respondent’s claims.

For example,

At a minimum, it could have verified how the disputed domain name was in fact being used. A properly advised complainant should also have taken steps to investigate the claim that the Respondent had been using the disputed domain name in an unobjectionable way “for a very long time”. For example, The Wayback Machine maintained at “www.archive.org” is a well-known resource which can often provide some indication about how a domain name has been used at points in time in the past.

Complainant’s complaint included correspondence with its attorney discussing the reason it elicited a purchase price which was to file a UDRP complaint in the expectation (as typically happens) respondents would not “show up”. This sealed the RDNH against Complainant. The complaint should never have been filed.

In Verb Products Inc.; Verb Hair Products Canada Inc.; Moroccanoil Israel Ltd. v. Richard Bloxham, D2014-1023 (WIPO September 2, 2014) <verb.com> was registered 9 years before Complainant acquired its trademark. It claimed to have an unregistered right in VERB. However,

the Complaint does not allege or show that the Complainant used the alleged VERB mark … in any fashion at the time of registration of the Domain Name in 2002 or for nine years thereafter. Unquestionably the Complainant had no registered or unregistered rights in a VERB trademark at the time of registration of the Domain Name of which the Complainant could have been aware of or upon which he could have intended to capitalize.

Not only are the allegations of the complaint clearly insufficient to support a claim for abusive registration “the Complainant (represented by counsel) should never have filed this baseless Complaint.” It was as Respondent pointed out “a foolish waste of time involving a dictionary word in which the Respondent has a decade of seniority over the Complainant’s junior claim in hair care products.”

In the third case, Clearwater Systems, Inc. v. Glenn Johnson / Clear Water Systems of Remington Inc., D2014-0878 (WIPO August 5, 2014) the Panel declined to rule whether Complainant proved a “right” to maintain the proceedings because the evidence supported Respondent’s rebuttal that it registered <clearwatersystems.net> in good faith. The parties were not competitors, sold different types of equipment and operated in different geographic markets. Complainant’s counsel should have been aware that its contentions put this case outside the scope of the Policy. She structured the allegations around trademark infringement:

In the Panel’s view the Complainant’s counsel should have been aware of or informed herself of the fundamental differences between Policy proceedings and US trademark litigation before filing this case.

While the UDRP is concerned with infringement it has a different mandate than the Lanham Act. Trademark infringement is a strict liability tort; the UDRP is not. To prevail under the UDRP complainant must prove respondent intended to take advantage of the trademark’s reputation and good will. In Clearwater Systems Complainant’s counsel did not even attempt to present evidence of intention. What should be noted about this decision is that the Panel “on its own initiative … [found] the Complainant committed an abuse of process.”

In Globeway LLC v. Domain Administrator/Vertical Axis Inc., FA1407001571651 (Nat. Arb. Forum September 5, 2014) the complaint was so thin the Complainant moved to withdraw it. The three member Panel rejected this approach. “The clear thrust of Complainant’s argument was that Respondent had registered the domain name to frustrate Complainant’s new business venture and to make money improperly by selling the domain name.” Of course, this not the law. The Panel held

All of those allegations, in so as far as they concerned Respondent were false and contrary to the facts that could easily have been obtained. Moreover, perhaps the most egregious aspect of the way in which Complainant presented its case is that its allegations were said to be based on “searches” and “research” when in fact the root cause of its problems is the apparent lack of any research having been done at all.

This conduct is sanctionable not just for failing to perform the reasonably expected research and the dishonesty but also because “abusive complaints risk diminishing the credibility of the entire UDRP process.”

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