Paragraph 4 of the Policy describes the arbitral procedure as a “mandatory administrative proceeding.” This should not be misunderstood to mean that the respondent is compelled to appear. Indeed, statistically respondents default 85% of the time. The term “mandatory” is used in the sense that respondents are “obliged by virtue of the [registration] agreement to recognize the validity of a proceeding initiated by a third-party claimant,” Storey v. Cello Holdings, L.L.C., 347 F.3d 370, 381 (2nd Cir. 2003). It also doesnot mean that the respondent has no jurisdictional alternative. The first sentence of paragraph 4(k) of the Policy provides that “the mandatory administrative proceeding requirements set forth in Paragraph 4 shall not prevent either you or the complainant from submitting the dispute to a court of competent jurisdiction for independent resolution before such mandatory administrative proceeding is commenced or after such proceeding is concluded.”
The term mandatory administrative proceeding refers to the respondent’s contractual agreement to submit the claim to an impartial or neutral arbitrator to determine the merits of the complaint. “It is these Rules with which all applicants for the registration of domain names agree to be bound,” Cimcities, LLC v. John Zuccarini D/B/A Cupcake Patrol, D2001-0491 (WIPO May 31, 2001). Respondent is also bound by its representations and warranties to the Registrar, Carolina Herrera, Ltd. v. Alberto Rincon Garcia, D2002-0806 (WIPO October 16, 2002).
While it is not “mandatory” to appear in a proceeding, default in answering a complaint has consequences even though not tantamount as it is in a court of law to an admission of abusive registration. However, failure to explain or submit exculpatory evidence is as much a part of the record as that which is offered and even though the burden of proof remains with the complainant throughout the proceeding, silence (metaphorically) speaks. This being said, a complainant is not entitled to relief simply because it has a trademark and a respondent does not suffer forfeit of the domain name simply because it defaults. It is not bad faith to speculatively register domain names for presumed future value. A holder of a future acquired trademark, for example, has no legal right to an earlier registered corresponding domain name. Nor is it cybersquatting to register a domain name found to be identical or confusingly similar to a complainant’s trademark, as long as the domain name is not registered to take economic advantage of an existing trademark.
Non-appearance raises an issue that goes to the “validity of a proceeding”, namely proper service of the complaint. However, once compliance with due process has been determined, the ultimate goal of the UDRP proceeding is the disposition of the domain name. Respondents have three options upon service of a complaint: to answer, default or commence a proceeding in a court of law. The Whois database is the primary resource for identifying the registrant and its contact information. Indeed, “the integrity and effectiveness of the Policy, and of its dispute resolution mechanism, depend on registrants providing honest, complete, and accurate contact information,” Dell Computer Corporation v. Clinical Evaluations, D2002-0423 (WIPO June 30, 2002). Inaccurate or false contact information supports the conclusion that the respondent is hiding itself, which in turn supports bad faith registration.