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Retrospective Bad Faith, Revisited

To this observer, the most significant decisions in 2009 disputes were those in which Panels lined up on opposite sides in construing paragraphs 4(b) and 4(b)(iv) of the Policy. Those arguing for retrospective bad faith construe the paragraphs in a matrix that includes the representation and warranty provision of the Registration Agreement, paragraph 2 of the Policy (which reiterates the representations and warranties) and Telstra Corporation Limited v. Nuclear Marshmallows, D2000-0003 (WIPO February 18, 2000). The principal mover for the new construction explained his position in two cases City Views Limited v. Moniker Privacy Services / Zander, Jeduyu, ALGEBRAL VE, D2009-0643 (WIPO July 3, 2009) and Octogen Pharmacal Company, Inc. v. Domains By Proxy, Inc. / Rich Sanders and Octogen eSolutions, D2009-0786 (WIPO August 19, 2009) (the “Octogen line of cases”). According to this construction, “A party can register or acquire a domain name in good faith, yet use the domain name in the future in such a way that the representations and warranties that the registrant made as of the time of registration are violated. If a party uses the domain name in the future so as to call into question the party’s compliance with the party’s representations and warranties, this may be deemed to be retroactive bad faith registration.”

The Octogen line of cases has subsequently been endorsed by two or three other panelists, notably in Ville de Paris v. Salient Properties LLC, D2009-1279 (WIPO December 3, 2009) <wifiparis.com>). A three-member Panel in Denver Newspaper Agency v. Jobing.com LLC., FA0908001282148 (Nat. Arb. Forum October 16, 2009), resting its decision on Telstra and citing the Octogen line of cases, held that “registration and use” is used in the policy as a “unified concept.” The expression “unified concept” does not appear in Telstra. The Denver Panel could have exercised some judicial restraint because on the Denver record it was unnecessary to make such an exotic ruling.

The rejecters of this new construction, call it either “retrospective bad faith” or the “unified concept” focus their analysis on the language of paragraphs 4(a)(iii), 4(b) and 4(b)(iv) to demonstrate what was thought to be settled law that the complainant must allege and prove, separately, bad faith registration and bad faith use. The new construction disregards the difference between conjunctive and disjunctive; and by doing so aligns UDRP more closely with the Anticybersquatting Consumer Protection Act. Rejecter panelists simply do not buy this; or in the words of the Panel in Torus Insurance Holdings Limited v. Torus Computer Resources, D2009-1455 (WIPO January 10, 2010) it “does not seem … to be an attractive answer.”  It also is not an attractive answer to the Panel in Validas, LLC v. SMVS Consultancy Private Limited, D2009-1413 (WIPO January 20, 2010) who made it clear that if domain name law was to take a new direction it should rest on an amendment to the Policy. Validas will be discussed further in tomorrow’s Note.

Unquestionably, there are certain types of uses that are either so obvious or egregious that bad faith registration is concomitant. I mentioned two instances in Friday’s Note where respondents were obviously targeting the complainant’s trademark, passing off for advertising and phishing. Telstra is justly “seminal” – the word used by the Denver Panel – in explicating another circumstance, where the respondent incorporates a famous trademark in a domain name and holds it passively. But, not all domain names withheld from active use violate a complainant’s trademark rights.  It depends on a number of factors. Denver did not present such a situation; the domain name was both active and competitive with the Complainant.

Central to the issue sought to be resolved in the Octogen line of cases is whether subsequent bad faith use of a domain name registered in good faith satisfies the high proof requirement for violation of paragraphs 4(a)(iii) and 4(b), particularly 4(b)(iv) of the Policy. Before Octogen, the settled law – as expressed by the Panel in Smart Design LLC v. Carolyn Hughes, D2000-0993 (WIPO October 18, 2000) – was that it did not: “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).”

Gerald M. Levine <udrpcommentaries.com>

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