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No Time Bar for Cybersquatting Claims Under UDRP

Headline in TheDomains.com, June 18, 2016: “Wow: 20 Year Old Domain Name WorldTrade Center.com Lost in UDRP.”  For those who don’t follow UDRP decisions carefully this may elicit, how can this be? Well, surprised or not, and assuming complainant has priority in the string of characters that is both a domain name and a trademark —Complainant in World Trade Centers Association, Inc. v. Earth Plaza, CAC 101209 (ADR.eu. June 14, 2016) had 10 years priority over Respondent’s registration of the domain name and there was evidence of its being used in bad faith—delay is not a factor in prevailing on cybersquatting claims when there is an alignment of other factors; although there may be laches-like consequences for waiting too long in the absence of those other factors.

What consequences of delay mean is explained by the Panel in 4imprint, Inc. v. FOUR COLOR IMPRINTS , LTD., FA1605001674403 (Forum June 16, 2016) (<4imprints.com>):

To be clear, the Panel is not relying on laches to come to its conclusion [denying the complaint]. Laches arguments have no place in UDRP cases as Panelists lack equitable powers…. This is simply an issue of whether, with no evidence, it is reasonable to believe Complainant when it claims registration of the disputed domain name that happened 14 years ago was done in bad faith.

On the other side of the ledger, Respondent in CNU Online Holdings, LLC v. Kenneth Bolam, D2016-0358 (WIPO May 1, 2016) defended its right to <cashnetworkusa.com> on the grounds that Complainant could have objected to its registration and use sooner and not waited for five years. In effect (quoting the Panel), this “place[s] the burden on Complainant to have objected to Respondent’s use,” but the evidence was inconclusive “at best” and even if the objection could have been made earlier Respondent did not “adequately answer[ ] … why he chose the particular Domain Name [that is confusingly similar to the trademark] in the first place.”

The same ploy was also tried in Dollar Bank, Federal Savings Bank v. Paul Stapleton, The New Media Factory, D2016-0518 (WIPO April 24, 2016) to no avail:

Respondent argues that the Complaint in this proceeding should be barred by laches since Complainant is a 161-year-old financial institution managing over USD 7 billion, has outside legal counsel, is sophisticated with regard to trademark law, Internet presence and business in general, and that Complainant would have taken action in a timelier manner had the disputed domain name been disruptive or confusing.

The consensus reported in the WIPO Overview at paragraph 4.10 (Does delay in bringing a complaint prevent a complainant from filing under the UDRP?”) is that there is no time bar for cancelling or taking possession of infringing domain names. Laches is not a defense. The rationale (quoting from the Overview) is that

the remedies under the UDRP are injunctive rather than compensatory in nature, and that a principal concern is to avoid ongoing or future confusion as to the source of communications, goods, or services.

However, panelists

have also noted that a delay in bringing a complaint under the UDRP may make it more difficult for a complainant to establish its case on the merits, particularly in relation to the second and third elements requiring the complainant to establish that the respondent lacks rights and legitimate interests and that the respondent registered and used the domain name in bad faith.”

Strength of trademark obviously works to owner’s advantage (Dollar Bank); weakness, to respondent’s advantage (“4Imprints” and “Meryl”). The dispute over <meryl.com> is particularly interesting because it was initially owned by Complainant and either lapsed or was abandoned. NYLSTAR S.A. v. Domain Administrator, Meryl Blog, D2016-0561 (WIPO June 13, 2016). Respondent argued that the complaint is barred under the doctrine of laches. The Majority accepted that “it is not unreasonable that relevant delay can be taken into account. It seems extreme to say as some panels have said that it is irrelevant and cannot even be looked at.” Although concurring with the result, the Dissent disagreed: “it is more appropriate to address such issues squarely within the terms of 4(a)(ii) and 4(a)(iii) of the Policy.”

While Panels may not call their reasons for dismissing complaints laches the fact is many complaints are dismissed for the reason already noted. What is not accepted under the Policy, or for that matter under the ACPA, is to dismiss complaints under a defense that the claim is barred by the statute of limitations. However, on delay (the dissent in NYLStar notwithstanding) there is no reason to be rigid in accepting it or rejecting it. It makes sense that a stale cybersquatting claim is vulnerable to dismissal because, as a result of the passage of time, complainant cannot marshal evidence that respondent registered the domain name in bad faith. That is the essential explanation in NYLStar. In concurring, the Panel as a whole agreed that Respondent “provided a sufficient explanation and justification for the use of the Domain Name” to satisfy paragraph 4(a)(ii) of the Policy.

It should also be pointed out that when a complaint moves from the UDRP to the ACPA delay is not an issue. In DSPT International v. Nahum, 624 F.3d 1213 (9th Cir. 2010) the Court held that “[e]ven if a domain name was put up innocently and used properly for years, a person is liable under 15 U.S.C. §1125(d) if he subsequently uses the domain name with a bad faith intent to profit from the protected mark by holding the domain name for ransom.” An even more dramatic example is Newport News Holdings Corporation v. Virtual City Vision, Incorporated, d/b/a Van James Bond Tran, 650 F3d 423 (4th Cir. 2011). In an earlier UDRP proceeding, Newport News, Inc. v. Vcv Internet, AF-0238 (eResolution July 18, 2000), the Respondent was found to have registered the domain name in good faith but lost it in the ACPA action for subsequently using the domain name in bad faith.

Finally, there should be no confusion between delay and bar of claim. In Guidry v. Louisiana Lightning, LLC, et al, civ-15-6714 (E.D. LA June 2, 2016) the individual defendants moved for summary judgment on the grounds that the cybersquatting claim was untimely. However, they mis-identified the issue by arguing that the statute runs from the first act of infringement rather than the continuing nature of the injury.

Because the Lanham Act does not contain a statute of limitations, courts “look[s] to the most appropriate or the most analogous state statute of limitations.” This is a quotation from a 5th Circuit Court of Appeals, Walker v. Epps, 550 F.3d 407, 415 (2008), but this could be from any circuit. The district court’s analysis in Guidry could also have been from any district court. Defendants argued that Guidry’s ACPA claims fail because their “discrete acts of being listed as the administrative contact for and registering the www.louisiana lightning.com domain name [occurred] more than a year before Guidry filed this action.”

The Guidry court analogized the alleged limitations defense a Louisiana State statute with a one year limitation. However, because defendants “continue to violate the ACPA” not only by maintaining and using the www.louisiana lightning.com domain name but . . . continu[ing] to be listed as the administrative contact . . .Guidry’s ACPA claims against Dufour and Farm Fresh are not perempted, and Dufour and Farm Fresh’s motion to dismiss these claims due to a time bar is DENIED.”

In complaining about cybersquatting or defending against it there are evidentiary demands that must be satisfied. That is the reasoning for the Majority in NYLStar accepting delay as a factor in their decisions and it is logical they do so without in any way offending the Policy.

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. (Legal Corner Press, 2015). Learn more about the book at Legal Corner Press. Available from Amazon and Barnes & Noble.  Ongoing Supplement here.

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