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Denying Relief When the Complex of Facts Exceeds the Scope of UDRP

The UDRP forum is available to trademark holders to resolve disputes of cybersquatting, but not for commercial disputes in which domain names are merely incidental to other claims. Claims for breaches of contract and fiduciary duty that require the Panel to delve into the parties’ legal relations are generally outside the scope of the Policy. There has to be a clean and persuasive record. “Although the Panel has broad discretion to make a determination where there is a dispute over ownership … [the Complainant has] to come forward with sufficient proof to satisfy the panel that a UDRP determination is appropriate without making a legal determination over the parties’ contract rights or the enforcement of the various legal proceedings,” Kyowa America Corporation v. Quilite International L.L.C., FA1103001376292 (Nat. Arb. Forum May 17, 2011).

The term “cybersquatting” may be narrow when measured against the universe of claims involving domain names, but jurisdiction under the Policy includes claims for the more inclusive cause for abusive registration. Cybersquatting and abusive registration are theoretically synonymous, but cybersquatting carries a meaning implicitly narrower. A complainant is entitled to relief if it presents a persuasive record of bad faith in the wider sense. The record was not persuasive in Kyowa America. Subject matter jurisdiction will not be found to extend to a complainant’s demand for transfer of a domain name which it alleges passed by contract but which the right is contested and the facts inconclusive owing to alleged collateral disputes.

The Complainant in Kyowa America argued that it acquired its rights to the domain name by a settlement and security agreement with Respondent which it perfected by foreclosing under the Uniform Commercial Code the defaulting Respondent’s interests in its trademark and other intellectual property. “Complainant alleges that it subsequently took ownership of Respondent’s intellectual property pursuant to a Bill of Sale and Assignment Agreement, which Complainant recorded against Respondent’s registered trademarks and patents with the USPTO.” However, the Respondent took a different view of the parties’ rights to the domain name, <quilite.com>. It “argues that there are ongoing commercial disputes between itself and Complainant, denies the QUILITE mark was ever transferred to Complainant, and Complainant has no rights or legitimate interests which would justify it to bring this Complaint.” There is precedent for resolving these issues.

Where the parties differ markedly with respect to the basic facts and the dispute involves serious contractual issues that raise questions of governing law and proper forum “courts are better equipped to take evidence and to evaluate [parties’] credibility,” Love v. Barnett, FA 944826 (Nat. Arb. Forum May 14, 2007). The “Policy’s purpose is to combat abusive domain name registrations and not to provide a prescriptive code for resolving more complex trade mark disputes,” Luvilon Industries NV v. Top Serve Tennis Pty Ltd., DAU2005-0004 (WIPO September 6, 2005). In this respect, the nature of the dispute and the serious contractual issues put the claim in Kyowa America outside the scope of the Policy.

Determining subject matter jurisdiction rests with the Panel. However, even when the Panel finds jurisdiction it also has the discretion to terminate the proceedings if there is a prior pending action. In Kyowa America the parties were already before a court. Rule 18(a), which I will discuss in the next Note, authorizes the Panel to terminate the UDRP proceeding for that reason.

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