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Assessing “Improper Purpose” in Commencing a UDRP Proceeding

The 3-member Panel in Albir Hills Resort, S.A. v. Telepathy, Inc., D2012-0997 (WIPO July 19, 2012) makes an interesting comment that is central to its finding against Complainant of reverse domain name hijacking:

The Panel considers that the Complainant is represented by an attorney who should have appreciated that the Complaint could not succeed in the present proceeding since the disputed domain name was registered by the Respondent eight years prior to filing the trademark applications for SHA.

I’m underlining twice-over the phrase “represented by counsel who should have [known better].” Pro se complainants may be excused for not appreciating the finer points, and been excused. In commencing a UDRP proceeding the complainant is required to certify,“that the information contained in th[e] Complaint is to the best of [its] knowledge complete and accurate [and] that th[e] Complaint is not being presented for any improper purpose, such as to harass [the respondent].” This is “essentially a certification and expansion of the duty of candor by legal counsel incorporated in ABA Model Rules of Professional Conduct 3.3,” General Media Communications, Inc. v. Crazy Troll c/o CrazyTroll.com, FA0602000651676 (Nat. Arb. Forum May 26, 2006. Compare, Rule 11 of the Federal Rules of Civil Procedure. Rule 3.3 states: “(a) A lawyer shall not knowingly:

(1) make a false statement of fact or law to a tribunal or fail to correct a false statement of material fact or law previously made to the tribunal by the lawyer.

The Panel faults the lawyer on two counts. First, “the registration date of the disputed domain name precedes the dates of the Complainants’ relevant trademark registrations and the evidence shows that the disputed domain name has been used as part of a bona fide business of the Respondent.” Second, the lawyer “has misconceived the nature and the purpose of the Policy according to which the Complaint was brought.” It is not the purpose of the Policy to assist a trademark owner in capturing a domain name registered in good faith that happens to correspond to its trademark. A demand for a price that exceeds the respondent’s out of pocket expense for the domain name is not for that reason alone evidence of bad faith. The fact that the respondent or to remove a domain name from a holder for requesting “an exaggerated offer” for transferring the disputed domain name.

The lawyer for Complainant in Albir Hills Resort demonstrated his ignorance of UDRP jurisprudence by pointing out that

the fact that the [Respondent’s] use is not real produces an obstruction act for my client, because the obvious and logical owner of the domain name is the owner of SHA. That, and furthermore the fact that there are no trademarks ‘SHA’ owned by the respondent, implies a decrease of the reputation of my client’s trademarks.

[After the] the creation of the SHA Wellness Clinic, the Complainant noticed that the disputed domain name <sha.com> was already registered; the Complainant thus attempted to purchase it from the Respondent, but, since the Respondent had requested an ‘exaggerated offer’, the Complainant opted for filing this Complaint.

In failing to understand that a domain name holder does not have to own a trademark and that domain names are assets whose value is determined in the market place the lawyer is hoisted by his own petard.

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