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Exception to the Post Dated Trademark Rule

Putting aside the question as to whether a particular corporate name is registrable as a trademark, or is simply a trade name not actionable under the UDRP, the Panel in Applied Technology Holdings, Inc. v. u-Logic, Dan Stirling, D2010-0042 (WIPO February 17, 2010) held that the Complainant (ipso facto) owned a common law trademark in APPLIED TECHNOLOGY HOLDINGS. While it is clear that the Respondent – a former officer and director of Complainant – breached his fiduciary duty to the Complainant and has no right or legitimate interest in the domain name, less clear is jurisdiction under the UDRP. There is no doubt that jurisdictional space has grown to include abusive practices, and this may be the Panel’s rationale in Applied Technology for holding the case and deciding in the Complainant’s favor.

Ordinarily, a domain name registered prior to the complainant acquiring a trademark right cannot logically have infringed a right nonexistent at the time of registration. There is an exception to this rule set forth in the WIPO Overview at paragraph 3.1, which applies to a situation in which an insider takes advantage of a corporate opportunity: “In certain situations, when the respondent is clearly aware of the complainant, and it is clear that the aim of the registration was to take advantage of the confusion between the domain name and any potential complainant rights, bad faith can be found.”

The Respondent in Applied Technology argued “that its paying for registration and renewal of the disputed domain names creates such a right.” However, to succeed on this argument a respondent has the burden of proof on the issue of consent. The issue was specifically addressed in Igor Lognikov v. Web Ventures, Nerdec, Inc. and Charles Edmunds, D2009-1684 (WIPO January 29, 2010) (“If save for consent, the facts suggest that a domainname had been registered and used in bad faith, then it is the respondent that bears the burden of proof that the Complainant consented to that activity.”) Secret acts do not support consent any more than they would acquiescence.

This is the case in Applied Technology. The Respondent acted secretly. He “offer[ed] no proof of … such authority, nor any proof that Complainant was even aware of its registration of them in Respondent’s rather than Complainant’s name at any time during his service as Complainant’s officer and director.” And, “[w]ithout express consent to the contrary, Mr. Sterling’s registration of the disputed domain names in anything other than his beneficiary’s name was thus made in bad faith.” Unauthorized acquisition of a corporate opportunity by an officer and director imposes on that person a constructive trust in favor of the corporation.

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