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Entitlement to Short Letter Domain Names

Claims of cybersquatting for registering and holding two and three letter domain names have a history dating back to the first year of the operation of the UDRP. The earliest examples are <daf.com>, Tenenhaus Philippe v. Telepathy, Inc, 94355 (Nat. Arb. Forum May 17, 2000), and <kis.com> Kis v. Anything.com Ltd, D2000-0770 (WIPO November 20, 2000). It was recognized almost as soon as the Internet became operational that “[s]ome domain names . . . are valuable assets . . . irrespective of any goodwill which might be attached to them. . . . Indeed, there is a lucrative market for certain generic or clever domain names that do not violate a trademark or other right or interest, but are otherwise extremely valuable to Internet entrepreneurs.” Dorer v Arel, 60 F. Supp. 558 (E.D. Va 1999). See also USU AG v. DMP Enterprises, D2009-0761 (WIPO August 17, 2009) (<usu.com>. “A 3-letter domain name is a valuable asset and the Respondent was quite at liberty to attempt to sell this asset especially in view of the Panel’s finding of Respondent’s use of the domain name in connection with its business”).

Panels in the two UDRP cases from 2000 confirmed that Respondents had legitimate interests in the short letter domain names. In the many later cases that followed Panels rejected complainants’ contentions of bad faith principally because complainants failed to offer substantive proof it was they, in particular, who were being targeted for their trademarks’ goodwill and reputation. The short letter domain names could easily be claimed by many other businesses. This was one spoke of Respondent’s argument in SK Lubricants Americas v. Andrea Sabatini, Webservice Limited, D2015-1566 (WIPO November 23, 2015) and a significant factor in its favor. The Panel observes with approval that Respondent

identifies the original owner of the Domain Name which was Zenith Insurance Company. Additionally, he says many third parties identify themselves with the “ZIC” acronym such as: Zic News; Zanzibar Insurance Company; Siplast-Zic System; Zulia Industrial Constructions; Crist, Sears & Zic, LLP (and many other individuals with the last name Zic). The Complainant also says that a search of the United States Patent and Trademark Office Database shows at least 12 other third party trademarks that claim rights to “Zic” which belies the Complainant’s claim to exclusive use and enjoyment of the acronym.

I highlight Respondent’s research on other entities specifically (and, I think the Panel may have done so also for the same reason) to comment on the kinds of evidence respondent would be expected to marshal to rebut complainants’ contentions of abusive registration. Respondent had to do this in SK Lubricants because while Complainant had priority in the marketplace it shot itself in the foot, which I’ll explain in a moment. SK Lubricants is an example of failure of proof by Complainant. It can be contrasted with Gulf DTH LDC v. Mohammed Alsayed, DAE2015-0003 (WIPO November 27, 2015) (<osn.ae>. The TLD is United Arab Emirates) which illustrates the reverse, marshaling of proof by Complainant and a failure of proof by Respondent (who defaulted in appearance): “there is no showing by the Respondent of a business model in which he registers such domain names for their ‘intrinsic value.’” If Respondent had done in GulfDTH what Respondent did in SK Lubricants the ending would have been different.

In many of these claims for short letter domain names complainants’ trademarks either did not exist when respondents registered the accused domain names or if they did exist they were not well-known or famous. In SK Lubricants Complainant had priority; Respondent was the successful bidder at a recent auction:

So far as the Domain Name is concerned the Respondent says that Domain Name was registered in 1994 by its first owner Zenith Insurance Company, then re-registered in 2003 by its second owner, who at some point between 2003 and 2015 either transferred or secured the domain asset with Domain Capital, who then listed the Domain Name for auction with Heritage Auctions which sold the Domain Name to the Respondent in February, 2015, the Respondent being the winning bidder in a public auction process.

Of course, obtaining a document name by public auction in no way immunizes the registrant if it was motivated to take advantage of complainant’s trademark. While there “may be circumstances where a registrant (or a purchaser) of a domain name which is a generic word or an acronym has knowledge of the rights of the trademark owner in a way which could raise issues as to the good faith or otherwise of the registrant . . . it is incumbent upon a complainant to explain to a UDRP panel, with appropriate supporting evidence, why it is that a registrant should be considered to have actual knowledge of the complainant and/or the complainant’s rights (or deemed knowledge if that is the complainant’s case).

Here, Complainant made “no attempt whatsoever” to establish its case. Not only is the “Complaint . . . extraordinarily short [there was no more than a ‘bare assertion that the ZIC branded product exists and is sold in a number of countries’] and appears to have been prepared on the mistaken assumption that all that is required to achieve its desired remedy is to complete a form with the minimal amount of information necessary and to have entered something, however short, under each applicable heading,” but it left the Panel in the dark as to Complainant’s trademark:

the Panel has no knowledge at all of how well known the Complainant’s trademark is, what sales its trademarked products enjoy, what advertising or marketing is carried out in relation to such products, or as to any other of the multitude of possible factors that may go to show that a Respondent was (or possibly should have been) aware of the Complainant’s rights.

In addition to these deficiencies, the Complainant undermined its position further by misstating the law in a letter prior to the initiation of the UDRP:

It is not clear to the Panel whether the above email was formulated with the benefit of legal advice but it does not matter – the statement that an offer to sell a domain name which corresponds to a trademark is itself evidence of bad faith is simply wrong. Carrying on business in registering descriptive or generic domain names is not of itself objectionable.

If Complainant had taken “competent legal advice it should have appreciated” it could not succeed. But, it appears that Complainant did not seek competent legal advice—implying that if it did have legal advice, it was incompetent. Ergo: “]i]n all the circumstances the Panel agrees with the Respondent that the Complaint was brought in bad faith and constitutes an abuse of the administrative proceeding.”

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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