Parties to a UDRP proceeding must include a certification similar in U.S. practice to Rule 11 of the Federal Rules of Civil Procedure (and undoubtedly a feature in procedural codes in other judicial jurisdictions) “that the information contained in this [Complaint or Response] is to the best of [Complainant’s or Respondent’s] knowledge complete and accurate, that this [Complaint or Response] is not being presented for any improper purpose, such as to harass, and that the assertions in this [Complaint or Response] are warranted under these Rules and under applicable law, as it now exists or as it may be extended by a good-faith and reasonable argument” Rules 3(xiii) and 5(viii).

Facially false and clearly abusive of the Policy are certifications by complainants alleging nonactionable or overreaching claims of cybersquatting and by respondents alleging meritorious defenses when there are none. Certifications of these kinds naturally undermine parties’ credibility, with unsurprising consequences; although it should also be pointed out that there are disputes in which panelists have reached one result and courts of competent jurisdiction another. I’ll reserve this for a future discussion, but the most recent in favor of trademark owner under the Anticybersquatting Consumer Protection Act, decided August 10, 2016 is Bulbs 4 East Side, Inc., d/b/a/ Just Bulbs v. Ricks, 14-cv-1472 (S.D. Texas, Huston Division).

On certifications by complainants, however, there is one circumstance that cannot be redeemed, namely claiming cybersquatting for trademarks that lack marketplace presence when domain names were original registered. Priority is a threshold factor (not for standing under the UDRP, but for establishing bad faith). Respondents’ false certifications similarly rest on unprovable contentions or disqualifying facts. However, there are also instances of disputes in which Panels have rejected truthful respondent certifications, of which only a few (a couple noted below) have been contested in courts of competent jurisdiction. The issue of overreaching and Panel determination to transfer domain names is discussed by a prominent domain name investor, Nat Cohen in a recent article posted on Domain Name Wire (“Small Businesses and Investors Losing Domain Names in Flawed UDRP Decisions”).

First, false complainant certifications.  The Respondent in Skyline Communications NV v. WebMagic Staff, WebMagic Ventures LLC, D2016-1667 (WIPO October 25, 2016) registered <dataminer.com> years before Complainant had any presence in the marketplace. The UDRP was commenced after Complainant registered its trademark. The Panel found

several of the Complainant’s factual and legal contentions that border on the misleading. As an example the Panel mentions the incomplete quote of the holding in the Torus case, as pointed out by the Respondent; mischaracterizing the Respondent’s business (see Response, Annexes 5 and 6); referring to the Respondent’s activities as “cybersquatting” on no more authority than its own judgment (a search by the Panel found no case in which the Respondent was a respondent on the WIPO data base and only two cases on the National Arbitration Forum data base, in both of which the complaint was denied); and calling its mark “not descriptive”.

Certification should mean that clients or their representatives have determined (in the words of Rule 11) that “after an inquiry reasonable under the circumstances” the claim is truthful and not frivolous. When there is no inquiry at all and there’s no supporting evidence of bad faith, then the claim is frivolous and should never have been commend, this is why in most of these cases false certification generally results in reverse domain name highjacking.

Even if an argument could be mounted that complainant is entitled to the domain name because its trademark had a presence in the marketplace before domain name registration it can be undermined by a weak trademark and lack of proof of bad faith. This is particularly seen with strings of characters that spell dictionary words or descriptive phrases. In Hôpitaux Universitaires de Genève v. Aydin Karadeniz, D2016-1620 (WIPO October 10, 2016) (<hug.com>, <hug.net> and <hug.org>) the Panel explained

the Complainant did not send any cease-and-desist letter or put any allegation of misconduct to the Respondent before filing the Complaint; and, on the other hand, it does not appear that the Complainant carried out any investigation itself before filing the Complaint that might have revealed whether the Respondent was acting in good or bad faith. This suggests at best a reckless disregard of the respondent’s possible entitlement to retain the disputed domain name.

While a party believing the rightness of its claim is a good starting point it does not necessarily survive objective investigation of the merits; and if demonstrable, the proof must be submitted in support of the contentions. In Avasant Global Holdings, Inc. v. Gary Norton, FA160700 1683813 (Forum September 29, 2016) (<avisant.com>) the Panel explained that “despite Complainant’s allegation regarding Respondent’s prior knowledge of Complainant’s business, no evidence was filed in that regard. Hence, the Panel cannot consider that Respondent knew of Complainant’s business prior to the opposition to the registration of the trademark AVASANT, as informed by Respondent (Annex 4 to the Response).”  “Avisant” is not “Avasant.”

Another offense to certification is complainants misleading Panels of the material facts.  An example is Whispering Smith Limited v. Domain Administrator, Tfourh, LLC, D2016-1175 (WIPO September 27, 2016) (<bravesoul.com>) in which  the Panel found the “Complainant (or rather, its attorney) has tried to mislead the Panel by mischaracterizing its trademark rights along with having made unsupported arguments under the third element of the UDRP Policy.” In the absence of evidence, Panels are authorized to draw adverse inferences that there is none.

Turning to respondent certifications, the issue only applies to respondents who appear and defend which is a small percentage of UDRP disputes. Statistically the default rate is in the region of 85% to 90% of the time. In two exemplary cases—exemplary because Respondents challenged the UDRP awards that were subsequently set aside or vacated in ACPA actions—Austin Pain Association v. Domain Admin / THIS DOMAIN IS FOR SALE / HugeDomains.com, FA1312001536356 (Forum March 18, 2014) (Hugedomains.com, LLC. v. Wills, 14-cv-00946 (D. Colorado July 21, 2015) and Camilla Australia Pty Ltd v. Domain Admin, Mrs Jello, LLC, D2015-1593 (WIPO November 30, 2015) (Mrs. Jello, LLC v. Camilla Australia Pty Ltd. 15-cv-08753 (D. NJ 8/1/2016).  In both disputes, the Panels rejected respondents’ defenses, which raises questions about either mis-application of law or preconceived notions of what constitutes bad faith. Correspondence to weak trademarks is the common thread in both disputes.

In the Camilla Australia dispute a three-member Panel applied a contentious “retrospective bad faith” theory of liability that imposes on the registrant a continuing obligation under Paragraph 2 of the Policy to “ensure that after registration the disputed domain name is not used in a deceptive or confusing manner with new or developing trademarks.” The introducer of the retrospective bad faith theory is one of the Camilla panelists. The Panel explained that

Although a trademark might not be known at the time of registration, if it is subsequently brought to the attention of the registrant, for example by the complaint of the trademark owner itself, then the registrant must ensure that advertising links or other use do not take advantage of the newly acquired trademark significance of the common term.

Important to underline is that the retrospective bad faith theory is not supported by consensus, but there are obviously panelists who continue to subscribe to it, which in the UDRP ecosystem is a bias in favor of trademark owners. In finding for Complainant the Panel found no fault with the certification but only with the argument:

The Respondent argues that its current use of the disputed domain name for PPC revenue predates the Complainant’s rights and is unchanged from this time, and so cannot be in bad faith. It is true that what has changed is not the Respondent’s use, but the emergence of the Complainant’s new and powerful trademark. The Respondent’s argument therefore raises the question of the obligations of the owners of domain names used to generate PPC revenue to the owners of new, emerging, trademarks.

But Respondent’s statement of facts is truthful and not unlawful (ACPA test) otherwise the prevailing trademark owner would not have stipulated to “vacate[ ] [the award] in its entirety.” Mrs. Jello’s decision to challenge the UDRP award in federal court and the stipulation withdrawing the complaint should clarify the law as it ought to be applied in UDRP disputes.

This is also the case with the Austin Pain award. In the ACPA challenge the Court (also on stipulation of the parties) set aside the award in a judgment for permanent injunction with defendant paying plaintiff $25,000.

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.  Ongoing Supplement and Update here.  Supplement and Update through August 2016 will be available in e-book format on October 1, 2016; the print format will be published on November 1, 2016. The Supplement and Update is also available in pdf format free on    the publisher’s website, www.legalcornerpress.com/dna-supplement.