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Corresponding to Trademarks, But Nonactionable Claims for Cybersquatting

The threshold for an actionable claim under the Uniform Domain Name Dispute Resolution Policy (UDRP) is a trademark in which complainant has rights.” “Rights” means a trademark that could have been newly minted a moment before filing the complaint. This is different from the Anticybersquatting Consumer Protection Act (ACPA) in which trademark owners must have a “mark that is distinctive at the time of registration of the domain name.” The difference is important because it gives rise to an anomaly under the UDRP that although complainant may have standing it has no actionable claim, while under the ACPA trademark owner cannot even get to first base (at least under a cybersquatting theory).

Even though claims are nonactionable in the UDRP forum where registrants have priority, complainants continue to initiate proceedings for cybersquatting. Centroamerica Comercial, Sociedad Anonima de Capital Variable (CAMCO) v. Michael Mann, D2016-1709 (WIPO October 3, 2016) (Complainant represented by counsel for <dollarcity.com>); GWG Holdings, Inc. v. Jeff Burgar, Alberta Hot Rods, D2016-1420 (WIPO October 13, 2016) (Complainant represented “internally” for <gwg.com>); Whispering Smith Limited v. Domain Administrator, Tfourh, LLC, D2016-1175 (WIPO September 27, 2016) (Complainant represented by counsel for <bravesoul.com>). Representation by professionals is not a guarantee they are familiar with the jurisprudence or the UDRP process.

The effort in some cases to create priority by claiming respondent renewed the domain name with knowledge of complainant’s trademark is not availing. The reason for this is that bad faith registration is measured from the original registration, not renewal of registration. Patricks Universal Export Pty Ltd. v. David Greenblatt, D2016-0653 (WIPO June 21, 2016) (<patricks.com>) (Renewal not considered as equivalent to a new registration). An owner’s recourse (if the facts support infringement) is under the Lanham Act.

Three reasons stand out for initiating complaints that cannot possible succeed, namely 1) ignorance of the law, 2) use of the Policy as a strategy for obtaining a better deal, and 3) punishment by compelling respondent to defend itself against a meritless claim. Because there are no attorney’s fees under the UDRP the worst that can happen to complainant for overreaching its statutory right is a finding of reverse domain name hijacking.The three cases cited above concluded with sanctions.

In contrast under the ACPA the worst is a magnitude  greater, namely damages up to $100,000 per domain name and attorney’s fees to the prevailing party. A couple of cases are presently moving through federal courts for awards of damages; in a number of other cases trademark owners have agreed to voluntary dismissal with prejudice, and in a couple of other cases the stipulations of dismissal included trademark owners paying to exit the case.

To prevail in a UDRP proceeding complainant must ultimately prove respondent registered the accused domain name in bad faith (which it cannot show if respondent has priority since knowledge is measured from the original registration) and has used or is using the domain name in bad faith (which complainant they may be able to show but it’s not enough), so it adds nothing to the merits that respondent lacks rights or legitimate interests in the domain name. Since trademarks postdating registration of accused domain names cannot succeed, what then do these complainants allege that could possibly be persuasive of merit? Arguing for the renewal date as the measure is not the answer, and the consensus does not support the theory.

Maybe it’s hope over experience they can succeed where other have fallen! It could be argued that granting standing to complainants with rights postdating the registration of the domain name encourages hope. If so, the consensus needs to change or ICANN amend the UDRP to follow the ACPA model.

A good illustration of the kinds of allegations complainants and their counsel conjure up are made in GWG Holdings. Here’s a list of Complainant’s allegations:

— [It] never authorized the Respondent to use the GWG trademark;
—  Respondent does not have any trademark rights in the disputed domain name;
— Respondent has not used, or prepared to use the disputed domain name in connection with any bona fide offering of goods or services, but remains parked with no content.
— Respondent has not made a legitimate noncommercial use or fair use of it.
— Respondent did not respond to Complainant’s offer in 2015 to purchase the domain name.
— Complainant tried again in 2016 to purchase the domain name and (this time) Respondent refused.
— Respondent has not used or made preparations to use the disputed domain name,
— Respondent has not acquired any public reputation in association with the disputed domain name, and is not known by the disputed domain name, therefore,Complainant alleges Respondent’s refusal to sell the domain name is to tarnish Complainant’s GWG trademark.

This repertory of allegations could be possibly support a claim for cybersquatting, but are otherwise are persuasive against domain name holders with priority.  In determining that Complainant had engaged in reverse domain name hijacking in GWG Holdings, the Panel noted four reasons for reverse domain name hijacking:

  1. “[A] complete absence of evidence or any facts from which an inference could reasonably be drawn that the Respondent registered the disputed domain name [to take advantage of Complainant’s trademark];
  2. Since Respondent registered the disputed domain name some eleven years before the Complainant was incorporated it was “impossible for the Respondent to have known of the Complainant or to have been motivated by bad faith towards a non-existent company when it registered the disputed domain name.”
  3. “[T]he disputed domain name is clearly an abbreviation of the business name ‘General Web Group’ which, the evidence shows, is the name of the Respondent’s business and in connection with which it used the disputed domain name for many years before even the Complainant’s stated first use of the GWG trademark in commerce.”

Lastly (and the 4th reason), the Panel repeats a philosophical message for sanctioning Complainant’s abusive conduct, namely the “importance of preserving the integrity of the UDRP for legitimate claims, an objective that is not enhanced by declining to make a finding of RDNH in an appropriate case, of which this is one.” See concurring decision in Tip Vy Spots LLC Vy v. Super Privacy Service c/o Dynadot, D2016-0872 (WIPO June 29, 2016) (<reveel.com>).

It would nevertheless be prudent, even in open and shut cases, to leave nothing to chance. The Respondent in GWG Holdings has priority and is not using the disputed domain name; it’s parked with no content. But, it’s important to both rebut complainants’ contentions and support respondents’ counter narratives with proof.

One of the great benefits of having a database of decisions is to educate parties on the evidentiary demands of the forum. There are two messages. One, is to take UDRP seriously; the other, is to have counsel familiar with the jurisprudence (“settled Policy precedent,” Patricks in which the Panel concludes thatComplainant is represented by counsel. Professional representatives of parties in UDRP proceedings are expected to be aware of or at least familiarize themselves with the Policy and Policy precedent, and to abide by the Policy and Rules.”)

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. (Legal Corner Press, 2015); Supplement and Update through August 2016 (2016). Learn more about the treatise at Legal Corner Press. Available from Amazon and Barnes & Noble.  The Supplement and Update is also available in pdf format free from the publisher’s website at www.legalcornerpress.com/dna-supplement.

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