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Registering Domain Name for Legitimate Business Purpose

There can be no violation of owner’s trademark rights where there is a legitimate business purpose for registering the disputed domain name. Anti-cybersquatting proscriptions apply to unfair business practices and deception, hence the intense focus on purpose for registering a particular combination of words. A good illustration is presented in Maria Guadalupe Arvizú Ramírez v. Jennifer DeGrave, Water Tec of Tucson, D2013-1467 (WIPO October 9, 2013) involving two domain names incorporating a geographical location, <watertecdemexico> and <watertecmexico.com>. Complainant is a Mexican company; Respondent a U.S. company located in Tuscan, Arizona with operations in Mexico. Both parties use WATER TEC as a trademark; Complainant has a Mexico registration, Respondent has an Arizona State trademark registration. If a respondent’s assertions are consistent with the provable facts and the registrations make business sense then the affirmative proof for abusive registration must be particularly strong.

The Policy is not intended to suppress legitimate competition or restrain commerce. The general outlines for good and bad faith conduct took shape in the opening months of the regime: “As the commercial value of such domain names has increased, brokers … have seized the opportunity to sell such domain names to the highest bidder. In principle, such a practice may constitute use of the domain name in connection with a bona fide offering of goods or services (i.e. the sale of the domain name itself).” Allocation Network GmbH v. Steve Gregory, D2000-0016 (WIPO March 24, 2000). Registrations of domain names are not abusive merely because they happen to be identical or confusingly similar to a trademark. Something more is required such as taking advantageous of a party’s mark for commercial gain, which requires proof that respondent had complainant’s mark “in mind.” The issue of abusive registration is reached in two stages: whether the respondent has any right or legitimate interest in using or passively holding the domain name and if it does not whether the registration and use are in bad faith.

Paragraph 4(a)(ii) is written in the present tense. “You [respondent in this mandatory proceeding] have no rights or legitimate interests in respect of the domain name.” The “right” or “legitimate interest” to which this paragraph refers requires complainant to prove a negative; that is, respondent lacks either “at the time of the complaint” whether or not it may have had one or the other in time past. A. Nattermann & Cie. GmbH and Sanofi-aventis v. Watson Pharmaceuticals, Inc., D2010-0800 (WIPO August 31, 2010). For respondent, a right or legitimate interest implies either the existence of a continuum of use from past to present, or an intention manifested by “demonstrable preparations” to use the disputed domain name. The absence of past use except as provided in paragraph 4(c)(iii) for fair use protected speech is inconsistent with good faith registration. The disjunctive “or” underlines a distinction between “right” and “legitimate interest” although in practice a present right to a domain name can be both a legal right and a legitimate interest or either depending on the factual circumstances. As one Panel explains: “The intention was that, first, if the registrant had an actual legal right to the domain name, that would defeat the trademark owner’s claim by itself. But, secondly, the Policy went further and added another criterion, that of legitimate interest.” International E-Z UP, Inc. v. PNH Enterprises, Inc., FA0609000808341 (Nat. Arb. Forum November 15, 2006).

Timing of domain name registration and trademark acquisition and content of the website are critical factors in deducing respondent’s intention. Registrations of domain names are not abusive merely because they happen to be identical or confusingly similar to a trademark. The “mere fact that the previously-registered disputed domain name prevents complainant from reflecting its subsequently registered trademark in a corresponding domain name does not give rise to any inference that this was the Respondent’s purpose in registering the disputed domain name.” Eclipse International N.V. v. Luma, Inc. , D2009-0380 (WIPO May 22, 2009) (<luma.com>). Something more is required such as taking advantageous of a party’s mark for commercial gain, which requires proof that respondent had complainant’s mark “in mind.” Timing of domain name registration and trademark acquisition and content of the website are expressly identified as critical factors in deducing respondent’s intention.

In Maria Guadalupe Respondent has other domain names that include its trademark and persuasively demonstrated it had a legitimate business purpose for joining a geographic designation to WATER TEC without violating the Policy. The Panel accepted “the concept of trademark owners defensively registering a variety of versions of domain names which may be extensions of their registered trademarks in order to protect them from being registered by third parties,” citing Shoeby Franchise B.V. v. Shoebuy Inc. SHOEBUY.COM, D2010-2142 (WIPO March 20, 2011). It found that the geographic designation was “a logical extension of the Respondent’s rights to the WATER TEC trademark as used by Respondent in Mexico.” In Shoeby Respondent registered <shoeby.com> as well as “many other variants of its primary domain name [<shoebuy.com>]” to protect its business interests.

Protecting a trademark by registering variations that by happenstance include domain names identical to another’s trademark makes good business sense, which is why in Maria Guadalupe and Shoeby the factual circumstances are persuasive in Complainants’ favor.

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