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Registered in Good Faith, Using in Bad Faith; Liability Under UDRP and ACPA

The UDRP is more forgiving than the Anticybersquatting Consumer Protection Act (ACPA) in that the complainant must plead and prove both registration and use in bad faith. So that, while (under the UDRP) bad faith registration presupposes bad faith use, bad faith use is not (at least, has not generally been found to be) conclusive of bad faith registration. In contrast, the ACPA clearly spells out a disjunctive requirement – “registers, traffics in, or uses a domain name”protected as a mark, 15 U.S.C. § 1125(d)(1)(A)(ii). This either/or model has also been adopted in country code policies. Although the “disjunctive approach to bad faith … has much to recommend it,” Editions Milan v. Secureplus, Inc., D2010-0606 (WIPO June 10, 2010), it is “not importable into the UDRP.”

The conjunctive requirement, however, is coming under increasing attack, as is clear in Jappy GmbH v. Satoshi Shimoshita, D2010-1001 (WIPO September 28, 2010) in which the 3-member Panel announced that “and” can mean “or,” quoting Lord Salmon’s [Federal Steam Navigation Co Ltd v. Department of Trade [1974] All ER 97 at 112] W.S. Gilbert observation about these two words: “My Lords, I do not suppose that any two words in the English language have more often been used interchangeably than ‘and’ and ‘or’. However unfortunate or incorrect this practice may be, many examples of it are to be found in all manner of documents and statutes. There are many reported cases which turn upon whether, in its particular context, the word ‘or’ is to be read conjunctively or the word ‘and’ disjunctively.” The Jappy construction which rests on the Octogen line of cases and defies 10 years of precedent will be discussed in a later Note.

The precedential construction which Jappy opposes rests on the accepted definitions of “and” and “or”. The less forgiving ACPA model — the “either/or” model — is illustrated by the decision in DSPT International v. Nahum, 08-55062 (9th Cir. 10-27-2010). The Court made it clear that a registrant’s use of a domain name to leverage a benefit in a business dispute violates the statute even though it may have been registeredin good faith. “Nahum could not have reasonably believed that he could lawfully use ‘eq-Italy’ when he no longer worked for DSPT.” The Court continued “Factor VI may fairly be read to mean that it is bad faith to hold a domain name for ransom … where the holder uses it to get money from the owner of the trademark rather than to sell goods.” So 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.

Under this reading it is not necessary to have any “direct evidence of an explicit offer to sell the domain to DSPT for a specified amount [.] [T]he jury could infer the intent to give back the site to DSPT only if DSPT paid Nahum the disputed commissions.” The ACPA Factor VI [roughly similar to paragraph 4(b)(i) and negativing 4(c)(i) of the Policy] provides that it is “indicative” of a “bad faith intent to profit” from the mark “if the person offering to transfer the domain name to the owner of the mark has never actually used or intended to use the domain name for bona fide sales of goods.” The logic of this conclusion which dovetails with the Octogen and Jappy analysis is that using a trademark incorporated domain name (paragraph 4(b)(iv) of the Policy) would a fortiori be bad faith regardless of the registrant’s innocense in putting up the website.

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

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