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Registration and Re-Registration: Measuring Bad Faith

Panels have long put to rest the argument that re-registration (or renewal of) is equivalent to registration, although there continue to be panelists holding that view. It is illustrated in Eastman Sporto Group LLC v. Jim and Kenny, D2009-1688 (WIPO March 1, 2010) (“Based upon the record in this proceeding… [the] Panel deems Respondent’s 2009 renewal of the disputed domain name to be the date on which to measure whether the disputed domain name was registered and used in bad faith.”). One rationale for rejecting the argument is consistency. The Panel in PAA Laboratories GmbH v. Printing Arts America, D2004-0338 (WIPO July 13, 2004), although sympathetic to the re-registration as registration view explained that “[i]n making its finding, the Panel wishes to clarify that its decision under this element is based on the need for consistency and comity in domain name dispute ‘jurisprudence’.” But for “the persuasive force of the cited decisions, this Panel would have expressed the view that paragraph 2 of the Policy demonstrates that references to ‘registration’ in the Policy were probably intended to be references to registration or renewal of registration.”

In 2003, the Third Circuit Court of Appeals held in Schmidheiny v. Weber, 319 F.3d 581, 66 U.S.P.Q.2d 1062 (2003) that it did “not consider the ‘creation date’ of a domain name to control whether a registration is subject to the Anti-cybersquatting Act, and we believe that the plain meaning of the word ‘registration’ is not limited to ‘creation registration’.” UDRP Panels reached a contrary view as early as 2000. Renewal (they said) was not the equivalent of a registration, but was treated by the registrar rather “as a ministerial function,” Substance Abuse Management, Inc. v. Screen Actors Modesl [sic] International, Inc. (SAMI), D2001-0782 (August 14, 2001). The Panel cites a number of cases and the WIPO Final Report in support of the proposition that there was never an intention “to extend the definition of abusive registration ‘to include domain names originally registered in good faith’.” As the rule has come down the earliest expression of it was made by the Panel in Smart Design LLC v. Carolyn Hughes, D2000-0993 (WIPO October 18, 2000), namely that “registration of a domain name that at conception did not breach Rule 4(a)(iii) but is found later to be used in bad faith does not fall foul of Rule 4(a)(iii).” See also WIPO Overview, paragraph 3.7 on this issue.

Another Circuit has now entered the conversation. The Ninth disagrees with the Third Circuit’s holding in Schmidheiny. The Court has held in GOPETS Ltd. v. Hise, Digital Overture, Inc., 08-56114 (9th Cir. September 22, 2011) that “re-registration [by which it means renewal of registration] is not a ‘registration’ within the meaning of § 1125(d)(1).” Interestingly, as part of its decision, the Ninth Circuit took a further step in defining domain names as property when it announced that “[n]othing in the text or structure of the statute indicates that Congress intended that rights in domain names should be inalienable.” The general rule is that a property owner may sell all of the rights he holds in property, whether “the alienation is by gift, inheritance, sale, or other form of transfer.”

The Third Circuit’s decision in Schmidheiny (which incidentally reversed the district court’s holding) assumed that “the defendant’s initial registration of schmidheiny.com was not covered by § 8131(1)(A) because it had been made before the passage of ACPA.” The Ninth Circuit concluded that this assumption was erroneous. The better view is that “§1125(d)(1)—and, by extension, § 8131(1)(A)—apply to registrations made before the passage of ACPA.”

Holding that a renewal of registration is ministerial and not a “registration” does not conclude the parties’ rights. Remember that the ACPS model is either/or registration in bad faith or use in bad faith, disjunctive rather than conjunctive as under the UDRP. Use in bad faith whether from the inception or later exposes the respondent to forfeiture. However, in GOPETS even though there was a transfer to the individual holder’s corporate entity (not a successor holder) there was no proof of bad faith use for <gopets.com> and no basis for giving the domain name to the complainant. “Transfer” to a related entity which the 9th Circuit appears to allow has lethal consequences under UDRP, an issue that I leave for discussion at a later time.

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