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Renewal of Registration of Domain Names Used in Bad Faith

Whether renewal of registration of domain names used in bad faith is actionable is an urgent question for complainants who either acquired their marks later than domain name registration; or if earlier are unable to prove respondents had any knowledge of their marks when the domain names were registered. Under UDRP jurisprudence the consensus view is that abusive registration––which means proof of conjunctive bad faith––is measured from registration, not from renewal of registration. One result of this is that if bad faith use commences after a mark accrues a reputation in the marketplace and the bad faith continues after renewal there is no remedy for complainant’s grievance in an administrative proceeding if there is no proof of registration in bad faith. The remedy lies in an action for statutory cybersquatting.

The issue of restarting the clock upon renewal of registration where there is bad faith use surfaces in two recent decisions that are worth notice: Squirrels LLC v. Giorgio Uzonian, D2014-1434 (WIPO October 28, 2014) and Avenue 81, Inc. v. Karl Payne, D2014-1825 (WIPO January 19, 2015). Panels in both cases denied Complainants relief but appear to endorse the view expressed in Eastman Group LLC v. Jim and Kenny, D2009-1688 (WIPO March 1, 2010) (<sporto.com>) in which the Panel formulated the following test that would justify forfeiture for bad faith use commenced before and continuing after renewal of registration:

– Respondent intentionally changed its use of the disputed domain name.

– The new use is unrelated to Respondent’s earlier business.

– The new use is textbook cybersquatting.

– The new use occurred prior to the renewal held to be a registration subject to for purposes of paragraph 4(a)(iii).

– There has been no legitimate use since renewal.

The consensus view does not support Eastman. WIPO Overview at paragraph 3.7 states: “[A] mere renewal of a domain name does not amount to registration for the purposes of determining bad faith. Registration in bad faith must occur at the time the current registrant took possession of the domain name” (emphasis added).

There is certainly no question in Eastman that Respondent was infringing Complainant’s statutory rights by its use of the domain name:

Respondent intentionally changed its use of the disputed domain name. The new use is unrelated to Respondent’s earlier business. The new use is textbook cybersquatting. The new use occurred prior to the renewal held to be a registration subject to for purposes of paragraph 4(a)(iii). There has been no legitimate use since renewal.

However, ruling in Complainant’s favor and releasing Complainant from the burden of having to prove bad faith registration “at the time the current registrant took possession of the domain name” the Eastman Panel introduced a factor that more properly belongs in a civil action under the ACPA. Reflecting on the Eastman test the Panel in Avenue 81 directly and Squirrels less directly nevertheless appear to endorse its reasoning: “[E]ven though … trademark rights were nonexistent at the time of the initial domain name registration, [renewal of registration] may depending on the facts and circumstances of a given case reflect bad faith registration and use within the meaning of paragraph 4(a)(iii) of the Policy” (emphasis added).

In neither Squirrels nor Avenue 81 did those “facts and circumstances” exist––“[t]he Complainant indirectly invokes Sporto, relying on the Respondent’s renewal of the disputed domain name after becoming aware of the Complainant’s trademark rights. The Panel finds this reliance misplaced, and in the circumstances of this case disingenuous––but the Panels nevertheless open the door to the possibility that renewal should be treated as a new registration that restarts respondent’s warranty under Paragraph 2 under the right facts and circumstances. If this were to happen it would undermine the conjunctive requirement for forfeiture, a point made by the Panel in BioClin B.V v. MG USA, D2010-0046 (WIPO March 22, 2010).

The Avenue 81 Panel attempted to reduce the apparent impact of Eastman by explaining that the earlier Panel did not mean that “any renewal of a domain name in any circumstances automatically restarts the clock on evaluating registration in bad faith” (emphasis added). This is true. The Panel in Eastman only intended its holding to have limited application. As formulated the Eastman test would apply to all renewals where the bad faith use is found to have commenced prior to renewal and continues after it. In Eastman, the “Sporto respondent, after years of use of the disputed domain name in various manners unrelated to the complainant or its marks, consciously changed the content of its website to a use (a hyperlink farm with links to the complainant and its competitors) almost uniformly deemed bad faith.”

But, there is a question whether the Eastman rule should have any application at all. Whether this test has any viability for any class of violators is questionable; it certainly has not been followed and in some notable cases Panels have denied relief on the grounds that the issue belongs in civil court. Interestingly, the Eastman Panel (as sole panelist) was a member (although not the Chair) of the Avenue 81 Panel so it can be stated authoritatively that the Eastman formulation does not apply to all renewals wholesale.

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. (2015, 558 pages). Learn more about the book at Legal Corner Press. Available from Amazon and Barnes & Noble.  Ongoing Supplement here

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