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Different Mind-Sets In Inferring Bad Faith Registration from Bad Faith Use

Of the four enumerated circumstances of bad faith in paragraph 4(b) the first three describe bad faith registration while the fourth (4(b)(iv)) describes bad faith use. A respondent may lack rights or legitimate interests in the domain name (4(a)(ii)) but if the evidence is insufficient to support an inference of bad faith registration there is no legal basis for canceling or transferring the domain name to complainant (4(a)(iii)). Bad faith use alone is not ordinarily a “home run.” I feel secure in using a baseball metaphor because “first base” occurs in RapidShare AG, Christian Schmid v. N/A Maxim Tvortsov, D2010-0696 (WIPO June 22, 2010) (“before the Panel [can] consider such questions [as to whether a respondent lacks rights or legitimate interests and if it does whether it registered and is using the domain name in bad faith complainants have] to “get to first baseМ by making out their case under Paragraph 4(a)(i) of the Policy.”

For some panelists the binary concept sits uneasily where the facts are palpably clear respondent is using the domain name in bad faith even though it is equally clear respondent could have had no knowledge of the complainant or its trademark when it purchased the domain because (for among other reasons) the trademark was not then in existence. Nevertheless, there are “home base umpires” who look for reasons to find abusive registration. An example occurs in AgStar Financial Services, ACA v. Ashantiplc Ltd., FA1405001557154 (Nat. Arb. Forum July 1, 2014). The majority dismissed the complaint but the dissent would not have because it would have applied a negative inference from Respondent’s use of a privacy service:

I would hold this gives rise to a rebuttable presumption of bad faith registration and use under the penumbra of Policy ¶ 4(b) in the commercial context. Respondent has done nothing to rebut that presumption by showing a bona fide reason to conceal its true identity from the marketplace.

The disputed domain name in AgStar is <ruralliving.com> which (the majority explains) “apart from ‘banking services’ [is] a common descriptive if not generic term.” Complainant got to ‘first base’ because the domain name is phonetically identical to Complainant’s mark RURALIVING. But, RURALIVING is a weak mark. The majority concluded that even though Respondent lacked rights or legitimate interests in the domain name it registered the domain name “substantially before ComplainantМs trademark was issued by the USPTO.” “Therefore, the Panel continued] Respondent could not have registered the disputed domain name with ComplainantМs mark in mind.П

“Home base umpiring” is a problem when the majority holds the view of the Agstar dissent. This is illustrated in Milly LLC v. Domain Admin, Mrs. Jello, LLC, D2014-0377 (WIPO May 25, 2014) (<milly.com>, Respondent defaulted). The three member Panel concluded “[t]he fact Respondent may have registered the Disputed Domain Name prior to ComplainantМs acquisition of trademark rights does not per se preclude a finding of bad faith under the circumstances of this case for the purposes of paragraph 4(a)(iii).” Unfortunately, there is no further explanation for this holding and no citation to legal authority.

However, there are two possible explanations for the Milly decision. The first is the murkiness of the record as to whether the present Respondent purchased the domain name before or after ComplainantМs use of the trademark in commerce. If murkiness were the case it demonstrates that failing to respond favors Complainant by applying a negative inference, whereas Respondent had appeared and proved the longevity of its holding the decision may likely have gone the other way. Waking up after defaulting is illustrated in the РMy ArtП cases. Complainant took shots at wresting <myart.com> from Respondent.

In the first My Art v. Domain Discreet- MyArt.com, CAC 100281 (ADR.eu July 2011) against the original registrant who appeared and defended the complaint was dismissed. In the second, Respondent failed to answer the complaint in which Complainant alleged Respondent was a successor holder who acquired the domain name after the trademark. Complainant prevailed in My Art v. Mark Mikullitz, CAC 100751 (ADR.eu April 22, 2014) (Transferred on default). However, Respondent then woke up and commenced an ACPA action alleging that he was the original and continuing holder of the domain name. Defendant capitulated upon receiving the complaint, made an offer of settlement to buy itself out of the lawsuit rather than contest the issue and be exposed to significant damages and attorney’s fees for reverse domain name hijacking (Mikullitz v. Mr Art, 14-cv-03276 (S.D.N.Y July 15, 2014).

The second explanation for the Panel holding as it did which is implicit in the Milly decision lies in Complainant’s request that the Panel consider various approaches under the third element considered in previous UDRP cases, such as retroactive bad faith or the unified concept approach. The Panel did just that. In one of the cited cases, Jappy GmbH v. Satoshi Shimoshita, D2010-1001 (WIPO September 28, 2010) the three member Panel included one of the Panel members in Milly. In Jappy the Panel held РIn our opinion, both the context of the Policy and the object and purpose of the Policy makes it clear that the phrase Рhas been registered and is being usedП in paragraph 4(a)(iii) is not a binary concept. Accordingly, in our view the requirement that the domain name Рhas been registered and is being used in bad faithП can, in certain circumstances, be satisfied in the absence of bad faith intent upon initial registration where such registered domain name is being used in bad faith.”

It should be underscored that the decisions in Jappy and Milly are contrary to precedent which holds that paragraph 4(a)(iii) is a unitary concept. These are cases in which the “home run umpires” are of the view that an “out” is an “in.”

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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