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Trademark Rights Paramount to Contract Rights for Domain Names

UDRP decisions come down from providers (principally from WIPO and the Forum) at the rate of 7 to 10 a day. Complainants mostly prevail; this is because in 90% of the cases (more or less that percentage) respondents have no plausible defense and generally don’t bother appearing, although default alone is not conclusive of cybersquatting; there must be evidence of infringement. When complainants do not prevail, it is not because they lack rights; it is because in the balancing of rights, complainants either do not have sufficient evidence of bad faith, or respondents have persuasive arguments that their registrations are lawful.

The reason for stressing that trademark rights are paramount to contracts for domain names rests on the value societies attach to identifiers of source and the universal policy of governments to protect the integrity of marks from being used opportunistically for gain at the expense of mark owners and the public. This does not diminish contract rights lawfully acquired, although the challenge of rights demands proof.

In challenging registrants complainants start with two advantages, namely 1) the UDRP is a rights protection mechanism designed for them; and 2) they own statutorily protected marks while registrants have only contractual rights to their domain names. The legal challenge can be mounted at any time, regardless the length of holding, and when challenged registrants have no choice (other than defaulting or removing the dispute to a court of competent jurisdiction) except to protect their interests in a UDRP proceeding. (Removal to a court of competent jurisdiction is extremely rare, incidentally although losing registrants have prevailed in actions under the ACPA).

The 90% forfeiture rate mostly involves domain names incorporating marks distinctive—not just, or not only because they are necessarily well-known or famous, but because knowledge of them (directly or inferentially) cannot plausibly be denied. However, as marks descend on the classification scale, complainants’ proof of cybersquatting must correspondingly be of higher quality. The reverse is true as marks ascend on the classification scale, there is a correspondingly higher demand on respondents to explain their registrations.

It may come as a hard lesson for respondents insistent of their contract rights that they may be inferior to complainants’ rights if they cannot convincingly explain their lexical and numeric choices or if their explanations lack credibility. The issue comes into focus in two recent cases. There are (one would think) rules for acquiring domain names.  One rule is that the acquirer should undertake due deligence before making a purchase, or risk losing both the domain name and the purchase price.

In National Cable Satellite Corporation, d/b/a C-SPAN vs.  Michael Mann / Omar Rivero, FA1707001741966 (Forum September 20, 2017) the real party in interest (Rivero) acquired from a well-known investor (Mann) for $75,000. Mann acquired the domain name many years earlier, although the acquisition postdated Complainant’s WASHINGTON JOURNAL mark by many years (registration, 1997). (There is no indication in the record of any due diligence before Rivero purchased the domain name, and if not it violates the first rule of acquiring property).

Respondent contended that

Complainant does not have the exclusive rights in the terms WASHINGTON JOURNAL, and there are several other registrations that contain or bear the precise terms “WASHINGTON” and “JOURNAL.” [Respondent gave as an example WASHINGTON BUSINESS JOURNAL].

And

It is clear that the Complainant does not have the exclusive rights in the terms WASHINGTON JOURNAL across a broad range of goods and/or services. Without the exclusive rights in the terms WASHINGTON JOURNAL, it is impossible for Complainant to allege that the “USPTO alone sufficiently establishes the NSCS’s rights to the name pursuant to Policy 4(a)(1).” Rivero also contends “…it is obvious that the USPTO did not intend for Complainant to have exclusive rights in the terms WASHINGTON JOURNAL or the [Domain Name] incorporating those terms.

The Panel (unanimous) was not persuaded:

[Respondent] is a Cornell University graduate and a Founder and Editor-In-Chief of an organization called Occupy Democrats. Moreover, he states that he acquired the Domain Name specifically to launch a website to disseminate political news. Given Rivero’s background and the political news hosted on his website, the Panel finds that Rivero, on the evidence presented, was aware of Complainant’s WASHINGTON JOURNAL mark and that he was aware that confusion between his website and Complainant’s registered mark would help jump-start the launch of his website.

Even if Rivero neglected to perform due diligence (a case of not paying attention to Complainant’s statutory rights!) given the “length and prominence of Complainant’s use” use in commerce it was simply “not credible” that he

was unfamiliar with Complainant’s mark, especially given that he is using the Domain Name for political news. Rivero does not deny knowledge of the mark, but instead, merely notes that Complainant has not proven his knowledge. Here, given these facts, that knowledge is easy to infer.

(Although not quite the same facts because the domain names were built on generic terms, Respondent in a 2016 case paid $175,000 dollars and forfeited <halifaxcarfinance.com>, <halifax.com> and <halifaxliving.org>, Bank of Scotland Plc v. Shelley Roberts, Diversity Network, D2015-2310 (WIPO February 15, 2016) because it violated another cardinal rule, namely offering the domain names to Complainant. I’ll return to this case in a moment).

Claiming to be harassed or bullied by brand owners into giving up domain names incorporating their marks is entertaining but a not good defense, any more than offering to settle a proceeding in exchange for payment. In  PayPal, Inc. v. David Weiss / Paybyweb, Inc., FA1707001740061 (Forum August 17, 2017) (<paypals.com>) the Respondent stated

[it] only redirected the website to a gripe site after it was harassed by Complainant and believed that the diversion was necessary to prevent Complainant from taking the disputed domain name.

But, the Panel was not impressed:  “More importantly, one does not establish good faith merely by changing the content of a site in an attempt to make it non-infringing, especially after the receipt of a cease and desist letter.” Respondent also breached the same cardinal rule of offering to sell the domain name to Complaianant.

In Airbnb, Inc. v. Norman King / Target Marketing Group, FA1707001738345 (Forum July 27, 2017) involving <air-bnb.com> Respondent was indignant at being called out as a cybersquatter and made no bones that the domain name was “available for sale at $25,000” (and had in fact been offered to Complainant). Moreover,

This domain name was offered to both Brian Chesky and airbnb.com several months ago, along with Jonathan Mildenhall and Joe Gibbia and each one declined the offer and they further indicated in their response that they were not interested in the domain name. They said it was not important to airbnb.com and they were cool with that decision. I thought they must be crazy? Now suddenly you are interested… Or maybe you simply intend to Bully us into submission with your lawyers, your huge might and your 30 Billion Dollar Valuation. (Emphasis added).

Moreover,

If you continue to Bully me I promise you that I will attach copies of all the emails between myself and Brian Chesky and Jonathan Mildenhall and I will publish this complaint on all Public Forums on the Internet. I will publicly post my response and all documents filed in this dispute will be published on ALL public forums. I am an SEO expert so I expect to rank these articles on Page One of Google. So, To make a long story short… If you wanted this domain you should have bought it 10 years ago.

Length of time could be a factor but not for well-known marks, and not even for those marks composed of generic terms (the “Halifax” domain names noted above) where respondents are found to have offered the domain names to complainants in violation of paragraph 4(b)(i) of the Policy, although it is also true as the Panel in Bank of Scotland noted

had the evidence shown that this disputed domain name was acquired and used in connection with such a purpose [for its geographical associations with City of Halifax] then this would have been sufficient to demonstrate the Respondent’s rights and legitimate interests under the Policy.

Trademarks are not paramount when the strings of lexical characters can be purposed for non-infringing products or services. Their rights extend only so far.  Notwithstanding respondent exclamations they are sometimes right. One is reminded, for example, of cases respondents lose in the UDRP proceedings against Complainants with weak marks but prevail in ACPA actions. The mark in Blue Ridge Fiberboard, Inc. v. Domain Administrator/Domain Asset Holdings, LLC., FA1602001661150 (Forum March 29, 2016) is SOUND STOP; the mark in Camilla Australia Pty Ltd v. Domain Admin, Mrs Jello, LLC., D2015-1593 (WIPO November 30, 2015) is CAMILLA. These cases are not alone in challenging UDRP awards. In both Blue Ridge and Camilla Complainants (defendants in the subsequent actions) settled without gaining control of the domain names.

I think no one would disagree that there is a marked difference between PAYPAL and SOUND STOP even though both are composed of dictionary words. (But what marks are NOT composed of dictionary words? Few I think are totally made-up). The only plausible defense to claims for brand infringement is either active use of the word or phrase for its ordinary or semantic meaning, or non use but offering a credible explanation for acquiring the domain name for its ordinary meaning and plausible non mark value.

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. (Legal Corner Press, 2015). Learn more about the book at Legal Corner Press. Available from Amazon and Barnes & Noble. Supplement and Update through August 2016 published January 2017. The Supplement and Update is also available in pdf format free on the publisher’s website, www.legalcornerpress.com/dna-supplement.

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