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Forfeiting Domain Name for Subsequent Bad Faith Use

A finding of bad faith use is only one half of abusive registration, regardless of its egregiousness. While renewal of a metamorphosed domain is not a new act of registration (the date from which bad faith is measured) a transferee inherits its transferor’s bad faith use and (with some exceptions) will be deprived of the domain name. There have been recent attempts to promote a new construction for abusive registration – to unify or disjoin the two elements of bad faith – but the consensus remains that abusive registration requires bad faith in the conjunctive. Nevertheless, the dialogue among panelists stubbornly continues. The latest entry is dueling views A. Nattermann & Cie. GmbH and Sanofi-aventis v. Watson Pharmaceuticals, Inc., D2010-0800 (WIPO August 31, 2010).

Although the majority in A. Nattermann & Cie was unpersuaded by the dissent’s analysis there is precedent for the proposition that

when the use of a trademark in a domain name is conditional on the performance of certain provisions of agreements entered into between Complainant and Respondent or where the use of a trademark in a domain name is conditional upon the continued relationship established by the parties under those agreements, the failure to perform those condition or the termination of that relationship and the continued use of the trademark in the domain name constitutes registration of the domain name in bad faith.

The theory underlying this precedent is that a right or legitimate interest created by contract “clearly cannot last forever,” International E-Z UP, Inc. v. PNH Enterprises, Inc., FA0609000808341 (Nat. Arb. Forum November 15, 2006). Analysis of rights post-termination is traceable to UVA Solar GmbH & Co K.G .v. Mads Kragh, D2001-0373 (WIPO May 7, 2001). In that case the Panel held that a “registration of a domain name can lose its bona fides if the registrant subsequently breaches one of the terms upon which he was authorized to register it.” Thus, while it is possible for a complainant to succeed under paragraph 4(a)(ii) the existence of an express provision under the UVA Solar line of cases is generally fatal to the respondent’s good faith under paragraphs 4(a)(iii) and 4(b)(iv) of the Policy.

Decisions that go the other way stand for a related but opposite proposition, namely that a respondent’s good faith registration may survive expiration where the contract is silent on the post-termination use of the domain name. Cases on this issue include The Prudential Insurance Company and Urbani Tartufi s.n.c. v. Urbani U.S.A., D2003-0090 (WIPO April 7, 2003) (<urbani.com>) and Sheri Jones, FA0510000584625 (Nat. Arb. Forum December 19, 2005) (<prudentialmontana>). If the respondent registered the domain name pursuant to agreement without the complainant expressly reserving rights for its return at the expiration of the contract, then the respondent’s continued use after termination of its business relationship is arguably legitimate for the reason that the registration was in good faith.

The majority in A. Nattermann & Cie essentially adopted the Prudential Insurance view in light of the contract’s silence on the domain name. However, as the dissent pointedly noted the contract was not silent on the trademark. It read “[Complainant] hereby grants to [Respondent] during the term of this Agreement and subject to the terms and conditions hereof, the exclusive right to use the Trademark in [Respondent’s] territory.” Where the factual circumstances align with Prudential Insurance the UDRP is not a proper vehicle for the sought after remedy. For that, the complainant must bring its claim as a civil action under trademark law.

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

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