A minority view has emerged, indeed is greatly insistent and inarguably articulate even if not persuasive, that questions a bedrock consensus of UDRP jurisprudence. Panelists of the earliest decided cases concluded that for the complainant to succeed it must plead and prove that the respondent registered (intent) and is using (present conduct) the domain name in bad faith. One consequence of this binary concept is that respondents who take advantage of later acquired trademarks are permitted retain their infringing domain names. The binary concept (the minority view insists) allows the respondent to continue its bad faith use and to confuse and deceive the Internet public. The criticized consensus is said by these panelists to be based on misinterpretation of an admired early decision that formulated a bedrock principle for assessing good faith of passively held domain names, Telstra Corporation Limited v. Nuclear Marshmallows, D2000-0003 (WIPO February 13, 2000). A reconsideration of the consensus (the misgivers would say) is therefore necessary to correct this wrong. The label “retroactive bad faith” is a misnomer because the concept does not necessarily attribute bad faith to the registration, which could be innocent but justifies forfeiture of the domain name for continuing, knowing infringement of the trademark.
When the minority view first emerged in 1999 in a duo of cases, the first misgiver (who happens to be the panelist who decided the very first UDRP case and was the first to remark on the complainant’s burden) lamented that he and other panelists “seem to have largely overlooked the language of the Policy regarding the respondent’s representations and warranties,” City Views Limited v. Moniker Privacy Services / Xander, Jeduyu, ALGEBRALIVE, D2009-0643 (WIPO July 3, 2009) (known as the “Mummygold” case), complaint denied but the same panelist applied his underlying rethought analysis in Octogen Pharmacal Company, Inc. v. Domains By Proxy, Inc. / Rich Sanders and Octogen e-Solutions, D2009-0786 (WIPO August 19, 2009) to find abusive registration. The binary construction is a path wrongly taken.
The latest conversation on the binary versus unitary concept is between the majority and dissent in Alibaba Group Holding Limited V. Digital Domains MEPE, HK-1100361 (ADNDRC July 26, 2011). The dissent in Alibaba is the Mummygold panelist. It is worth listening into the conversation between panelists of the different views. It should be quickly noted that articulate though the unitary analysts are their concept has not gained transaction. Torus Insurance Holdings Limited v. Torus Computer Resources, D2009-1455 (WIPO January 10, 2010) (it “seems to this Panel that such evidence of bad faith use would need to be found to co-exist with bad faith intent regarding the act of registration in order to satisfy the requirement of paragraph 4(a)(iii) of the Policy.”) For the Panel in Mile, Inc. V. Michael Burg, D2010-2011 (WIPO February 11, 2011) the unitary concept “does not seem … to be an attractive answer … [nor could it] find a compelling Policy or legal basis for retroactively characterizing later abuses as bad faith in the ‘registration’ of a domain name.”
Part of the problem here is that the binary construction has been applied from UDRP’s start. The value of a jurisprudence to those engaged in dispute resolution is predictability, which comes from adherence to consistency. The WIPO Overview has given the binary view black letter status (paragraph 3.1). The Alibaba majority holds to the consensus, namely that the subsequent use in bad faith is not to be read retrospectively to find registration in bad faith. This does not mean to say that an inference of bad faith registration cannot be drawn in certain instances, but the proof cannot rest solely on infringing use. There would be a different outcome under the Anticybersquatting Consumer Protection Act, but the parties in Alibaba are not U.S. based and there is no information about the location of the registry and registrar.
To the dissent in Alibaba, precedent is not sacrosanct: courts have reversed and overruled precedent in “order to reach the correct result.” He continues
The dissenting panelist agrees with the majority that, although the UDRPis not a precedential system, where it is possible to respect prior panel decisions without controverting the intent of the Policy, than prior panel decisions should be respected. The intent of the Policy is to prevent consumers from being misled as to the source of products or services they are seeking on the Internet. It is contrary to the intent of the Policy to allow a registrant who has apparently registered a domain name innocently to later use that domain name to deliberately mislead Internet users. Yet, under the consensus view, there are many decisions which sanction just such conduct.
If courts of law have reversed and overruled bad principles then “[s]urely UDRP panelists are even more free to determine that prior panel decisions, no matter how well intended, do not comport with the Policy.”
Briefly, the difference between the binary and unitary views is night and day. The unitary view holds that subsequent bad faith use – at least that which is spectacularly egregious – supports a conclusion that the respondent violates the Policy by taking advantage of the complainant’s reputation and “deliberately mislead[ing] Internet users.” Continuing infringing use is a violation of the respondent’s representation and warranty under both its registration agreement and paragraph 2 of the Policy, which essentially states the “thou shalt nots” which includes renewals: “By applying to register a domain name, or asking us to renew a domain name registration, you hereby represent and warrant to us that [etc.]” (emphasis added).