A respondent’s admission that the complainant is the beneficial owner of domain names is proof that she lacks rights or legitimate interests in them but not that she acquired them in bad faith. Abusive purpose where the parties have or had a business relationship depends on their history. In Club 1948, an Illinois not for profit corporation v. Sari Zats, FA0908001277416 (Nat. Arb. Forum September 23, 2009) the Respondent acquired domain names with the Complainant knowledge and consent using her own funds. “[T]he circumstances surrounding the acquisition of the disputed domain names by respondent can be critical.” Employees and agents exhibit bad faith when their actions are inconsistent with their duties. Conduct, however, is a two way street.

Implicit in the transaction in Club 1948 and not denied by the Complainant was an agreement to reimburse the Respondent her out-of-pocket expenses. The domain names were originally acquired by one of the founders of the Complainant who after several months “ended his association with Complainant under less than friendly circumstances.” The Respondent negotiated on the Complainant’s behalf to transfer the domain names. The Panel’s decision turns not on the Respondent’s decision to withhold the domain names (a contractual issue outside its jurisdiction) but on the Complainant’s acquiescence in the acquisition. That is, registering a domain name with complainant’s knowledge and consent precludes bad faith registration. “When a respondent acquires a disputed domain name with the complainant’s consent that does not constitute bad faith under the Policy,” citing Thread.com, LLC v. Pop off, D2000-1470 (WIPO January 5, 2001).

Club 1948 is distinguished from cases involving faithless employees, Sunset Bronson Entertainment Properties LLC v. Jon Winston Hauer & J Winston & Company, FA0906001268209 (Nat. Arb. Forum July 31, 2009) and dishonest agents, Alain-Martin Pierret d/b/a Bordeaux West v. Sierra Technology Group, LLC., FA 0505000472135 (Nat. Arb. Forum July 1, 2005) whose purpose is to derive commercial gain from registering and withholding domain names. In the Club 1948 class of case, it is the Complainant who comes into the proceeding with unclean hands in refusing to reimburse the Respondent. “Complainant asserts that Respondent has attempted to demand sums in excess of [her] out-of-pocket expenses.” While this would support a finding of bad faith, it “does not negate the more significant point … that said Disputed domain Names were not initially acquired in bad faith.” In any event, the “amounts demanded in excess are relatively minor” and not conclusive that the Respondent was guilty of abusive registration.