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Certifying to Merit of Cybersquatting Claim Where There is None

There is no merit to the belief held by some trademark owners that domain names corresponding to trademarks infringe their exclusive rights on the Internet regardless the date of registration. For the ACPA the threshold issue is whether the trademark was “distinctive at the time of the registration of the domain name.” Although no such phrasing is found in the UDRP timing is a critical factor; so critical in fact that certifying to the merit of a claim that could not possibly succeed is itself an abuse of process. It is one of the anomalies of the UDRP that complainants are permitted to maintain a proceeding solely on a showing that respondents hold domain names identical or confusingly similar to later acquired trademarks even though they will be unable to prove bad faith registration.

As in actions in federal court parties to a UDRP proceeding and their legal counsel have a duty of candor. Rule 3(b)(xiv) of the Policy (similar to Rule 11 of the Federal Rules of Civil Procedure) reads:

Complainant certifies that the information contained in this Complaint is to the best of Complainant’s knowledge complete and accurate, that this Complaint is not being presented for any improper purpose, such as to harass, and that the assertions in this Complaint are warranted under these Rules and under applicable law, as it now exists or as it may be extended by a good-faith and reasonable argument.

Although violation of Rule 3(b)(xiv) leads to a toothless rebuke of reverse domain name hijacking (in the sense that Panels have no authority to award costs) it has the salutary effect of condemning complainant’s conduct that may give respondent some degree of satisfaction for the time and expense of having to defend itself against a meritless claim. The result is very different under the ACPA where the rebuke takes the form of statutory damages and attorney’s fees. In either forum, where the infringement claim rests solely on the earlier registered domain name corresponding to a later acquired trademark there cannot possibly be a cause of action, and if this is not recognized before filing a complaint there is abuse of process.

The three-member Panel in Dumankaya Yapi Malzemeleri SAN. VE TIC. A.S v. Domain Administrator, Name Administration Inc. (BVI), D2015-1757 (WIPO December 15, 2015) found that Respondent registered <dky.com> many years prior to Complainant acquiring its trademark. Complainant had “standing” to maintain the proceeding only because Panels construe the first requirement of the UDRP as complainant having a trademark right regardless of the timing of its acquisition. Under the ACPA the trademark owner would have no standing for a cybersquatting claim.

Reverse domain name hijacking (RDNH) “means using the Policy in bad faith to attempt to deprive a registered domain-name holder of a domain name.” Rule 15(e) authorizes the Panel “to declare in its decision that the complaint was brought in bad faith and constitutes an abuse of the administrative proceeding . . . [i]f after considering the submissions the Panel finds that the complaint was brought in bad faith.” An element of bad faith is complainant’s knowledge, either actual or in willful disregard of respondent’s right, that it could not succeed on its complaint.

The Panel in Dumankaya found that “[a]buse [of the administrative proceeding] can take several forms, but one of the most egregious examples is where a complainant fails to disclose relevant facts, such as the existence of highly material prior communications involving the relevant domain name.” The abuse in this case goes further, no doubt posited on the false theory that a trademark owner has a better right to the domain name corresponding to its trademark:

Complainant made no attempt to prove the existence of any trade mark rights prior to 2012, yet asserted without any supporting evidence that the Disputed Domain Name was registered in bad faith. The Complainant asserted use in bad faith, but made no proper attempt to justify that assertion. There is nothing in the evidence to suggest that the Respondent has been targeting the Complainant or the Trade Mark.

Further,

The Complaint had no prospect of success and the Complainant or those advising it must have been aware of that fact, but proceeded with the Complaint in the hope, perhaps, that as is so often the case, the Respondent would not bother to respond. That alone would have justified a finding of abuse of process, but to cap it all the Complainant made no mention whatever of its numerous failed attempts to acquire the Disputed Domain Name through a domain name broker for substantial sums of money. . . . In none of that correspondence did the Complainant assert that it had rights to the Disputed Domain Name.

The inference the Panel draws from this evidence is that “Complainant knew that [the] correspondence was fatal to its case and the Panel can only conclude that its failure to disclose it was an attempt to deceive the Panel.” The Panel notes that the “Complaint concludes with a certificate to the effect that the information contained in the Complaint was to the best of the Complainant’s knowledge complete and accurate.” However, “[i]n the Panel’s view, the signatory should never have been permitted to sign and submit that certificate.” Since Complainant was represented by counsel this is a rebuke of the signatory attorney.

As a general rule, Panels have not sua sponte waded into the issue of RDNH unless respondent requests it, presumably on the theory that parties don’t get what they don’t ask for. As a result there have been many cases where the facts would warrant a rebuke but none. comes Nevertheless, increasingly (and, perhaps, moving to consensus), particularly with egregious overreaching there appears to be an inclination to consider complainant’s conduct even without respondent’s request. The reasoning this this was aptly expressed by the three-member Panel in Nucell, LLC. v. Guillaume Pousaz, CAC 101013 (ADR.eu July 7, 2015):

There must now have been hundreds if not thousands of UDRP decisions on the above elements and although they are not precedents in the judicial sense, they are clear guides to parties as to how panelists have correctly interpreted the UDRP and explained what has to be proved. To file a complaint, as in the present case, when essential elements of the claim cannot be proved and where it must be known that they could not be proved and yet to allege bad faith against the Respondent is itself an act of bad faith and constitutes harassment of the Respondent amounting to Reverse Domain Name Hijacking.

The Panel’s view in Dumankaya is that “[i]f abuse is apparent on the face of the case papers, the Panel is under an obligation to declare it.”

Mr. Levine is the author of a treatise on trademarks, domain names, and cybersquatting, Domain Name Arbitration, A Practical Guide to Asserting and Defending Claims of Cybersquatting under the Uniform Domain Name Dispute Resolution Policy. (2015, 558 pages). Learn more about the book at Legal Corner Press. Available from Amazon and Barnes & Noble.  Ongoing Supplement here.

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