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Patterns of Registering Domain Names Legitimate Practice

Acquiring domain names as assets – for selling, financing, monetizing, trading and warehousing – has been part of the culture of the Internet from the beginning. Merchants in the domain business simply pitched their stalls alongside the more traditional sellers of goods and services in the new souk, sometimes creating such friction with their neighbors that lightens the days of readers of domain name decisions. The Complainant in Pantaloon Retail India Limited v. RareNames, WebReg, D2010-0587 (WIPO June 21, 2010) is the trademark holder of PANTALOON in India. The Respondent’s base of operations is the United States. It acquired <pantaloons.com> in 2002 after a prior registrant unconnected with the Complainant allowed it to lapse. It is not as though the Respondent is actually selling pantaloons or, strictly, in competition with the Complainant. “Clearly, from the evidence provided, Respondent is not itself offering pantaloons for sale, it is merely providing links to eBay and other sites where such offers are made.”

It cannot be denied that the Respondent is in the domain name business and doing what souk merchants do. It has, as the Complainant alleges, an established pattern of registering generic domain names. However, there is “a substantial consensus among panelists that the acquisition and offering for sale of domain names and/or using them to provide links to other sites may well (provided it is not directed at trademark misuse in breach of the Policy) be a legitimate business.” There is no illegality in having a stall with a name identical or confusingly similar to its trademark holding neighbor. “Whether that consensus [in holding that a respondent in the domain name business] is justified may be a matter for debate, but in the opinion of the Panel there is a strong body of precedent which, though not binding, is strongly persuasive.”

The value of a jurisprudence lies in the consistency of its rulings which in the case of the UDRP is achieved through “a strong body of precedent.” Readers of UDRP decisions will note that it is a rare case in which the panelist does not anchor his or her opinion with citations, even though, technically, precedent in UDRP jurisprudence (according to the WIPO Overview) is not binding. The question in Pantaloon and similar cases involving common words in the English (or any other) language is “whether the acquisition and use of the disputed domain name for that purpose constitutes a bona fide offering for sale.” The question “is intimately linked with the question of whether or not the acquisition and use is in good faith.” In regard to this, the Panel continues

the general approach among panelists appears to be to divide the cases into two categories; those in which the concerned trademark is fanciful or non-generic, and those in which the relevant trademark comprises a common generic word, particularly where the word is a word germane to the goods or services in respect of which the disputed domain name is used.

In assessing whether a respondent’s use constitutes a bona fide offering of goods or services, the Panel in Zerospam Security Inc. v. Internet Retail Billing Inc., Host Master, D2009-1276 (WIPO December 18, 2009) suggested that the determination lies in the answers to the following questions. Does “(i) the respondent regularly engage[] in the business of registering and reselling domain names and/or using them to display advertising links; (ii) the respondent make[] good faith efforts to avoid registering and using domain names that are identical or confusingly similar to marks held by others; (iii) [is] the domain name in question … a “dictionary word” or a generic or descriptive phrase; (iv) [is] the domain name … identical or confusingly similar to a famous or distinctive trademark; and (v) ***is [there any] evidence that the respondent had actual knowledge of the complainant’s mark.”

In Pantaloon, “criteria (i) and (iii) are clearly satisfied and so too, in the Panel’s view, is criterion (v). As to criterion (iv), the Panel is satisfied that Complainant’s mark is famous and distinctive in India, however there is no evidence that it is well-known outside that country and in particular, in the United States, where Respondent is located.” This raises the interesting issue of geographic distance and the question of “knowledge.” “There is no evidence that Complainant’s Pantaloon trademark is registered outside India or that it is known or used outside India.” For trademarks on the lower end of the classification scale the complainant needs significantly more evidence of its reputation at the time the domain name was registered. It cannot rest on its present reputation in a far country.

Levine Samuel, LLP. <researchtheworld.com>
Gerald M. Levine <udrpcommentaries.com>
E-Mail gmlevine@researchtheworld.com

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