In denying relief to a trademark holder for a claim that exceeds the Policy’s scope Panels explain that “the decision should not be read as a substantive decision on the merits of any trademark infringement claim,” Intertek Group Plc. v. ADFA Co., D2010-2128 (WIPO March 8, 2011). This is because the UDRP proceeding is not a trademark court; at least not formally. Its limited jurisdiction extends only to the issue of cybersquatting. It is conceivable for a respondent to have a right or legitimate interest in a domain name under UDRP jurisprudence, yet be an infringer under the Lanham Act of which the Anticybersquatting Consumer Protection Act is part and parcel. The Panel in Intertek concluded that the “Complainant has failed to establish that Respondent is not an authorized user of Complainant’s marks.”
This raises an interesting point about the UDRP. While it is true that it is not a trademark court, it is not entirely true. A cybersquatter is a registrant who knowingly occupies a trademark holder’s reserved space. The representation and warranty provisions of the registration agreement and paragraph 2 of the Policy could not be more clear about a respondent’s choice. Paragraph 2 reads in part “It is your responsibility to determine whether your domain name registration infringes or violates someone else’s rights.” Thus, in effect the Panel determines what a court of law would, namely that the respondent has or has not “infringe[d] or violate[d] someone else’s rights.”
Now, this determination may not be the last word because the losing respondent has a right to challenge it in a court of law. However, for the prevailing trademark holder the Panel is a surrogate judge. It should be quickly noted that for the most part losing respondents also lose under the ACPA. The most recent specimen of this is Lahoti v. Vericheck which had two rounds in the 9th Circuit both favoring the trademark holder and affirming the district court’s finding that the plaintiff acted willfully in registering and using the domain name. In the second round decided on February 16, 2011 the Court held: “In light of our conclusion that the VERICHECK mark is distinctive, the district court’s conclusion that Lahoti violated the ACPA is also AFFIRMED,” no citation as yet. The Court also affirmed attorney’s fees as well as statutory damages. Not a pretty outcome for the domain name registrant and likely to be a disincentive for other respondents thinking about their chances in federal court.
So, to return to the issue of the UDRP as a trademark court. If the finding favors the trademark holder it is a proto-trademark court; a first go through of the evidence of bad faith registration and use. The UDRP is not a proto-trademark court, however, when the finding exculpates the respondent of cybersquatting. In Intertek, the Complainant failed to rebut an inference of authorization. “Respondent may be acting pursuant to authorization that was granted to it by Complainant which has never formally been terminated.” In these situations the Panel acts modestly, which is the reason for its comment that the “Complainant [may] ultimately … choose to bring” the issue of trademark infringement to court, because in the presence of a genuine issue of material fact that is the only proper venue.