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Applying Laches as an Affirmative Defense in UDRP Disputes

Panels in formative cases held there was “no room for general equitable doctrines under the Policy such as would be possessed by Courts in common law jurisdictions.”, Inc. v. Ult. Search Inc., D2001-1319 (WIPO February 1, 2002).  This is consistent with the recommendation in the WIPO Final Report that “a time bar to the bringing of claims in respect of domain names (for example, a bar on claims where the domain name registration has been unchallenged for a designated period of years) should not be introduced.” Paragraph 17. In fact, a “time bar” was rejected in a coda to “Time Limitations for Bringing Claims.” Paragraph 199. One Panel explained that the “remedy available in an Administrative Proceeding under the Policy is not equitable.” The Hebrew University of Jerusalem v. Alberta Hot Rods, D2002-0616 (WIPO October 7, 2002).  Complainant is not barred, but respondent in the cited case prevails on the issue of legitimate interests:

Even if that conclusion be wrong, the facts here do not support a finding that Complainant should be barred from relief in this case by reason of laches. Complainant did not delay unreasonably after first becoming aware in or about January 2002, of Respondent’s registration of the disputed domain name. Further, there is no evidence Respondent has been prejudiced by delay.

The Panel recognizes that while the remedy in a UDRP proceeding is injunctive and not compensatory in damages there is an equity component that is recognized in paragraph 4(c)(i) of the Policy (respondent’s burden to prove good faith as opposed to no evidence of bad faith – insufficiency of evidence under 4(b)). Proof of good faith under paragraphs 4(c)(ii) [commonly known as] and (iii) [fair use] are resolved as issues of law as opposed to the balancing assessment called for under 4(c)(i).

However, a number of panelists have concluded that to deny laches as an affirmative defense cuts against the grain of the Policy. The WIPO Overview (2nd Ed), paragraph 4.10 notes that “[a] small number of panels have also begun to acknowledge the possible applicability, in appropriate and limited circumstances, of a defense of laches under the UDRP where the facts so warrant.” The most recent is Laminex, Inc. v. Yan Smith, FA1211001470990 (Nat. Arb. Forum January 13, 2013) (3-Member Panel), citing both UDRP decisions and opinions from U.S. Courts. The break through case is The New York Times Company v. Name Administration Inc. (BVI), FA1009001349045 (Nat. Arb. Forum November 17, 2010) in which the Panel held that when a Complainant fails to act for a substantial time while a Respondent develops an identical domain name for its own legitimate purposes, “laches should bar that Complainant from turning a Respondent’s detrimental reliance to its own unjust benefit.” Remarkably, the several other cases cited in Laminex for the proposition that laches is applicable in appropriate cases were all decided by unanimous 3-Member Panels whose members have long experience in domain name jurisprudence.

The question raised in a complaint to be resolved by a Panel is answered by its making a declaratory ruling as to which party is entitled to hold the disputed domain name. I have discussed plenty of cases in prior Notes in which complainant waited an excessive period of time to state a claim and lose on insufficiency of proof of bad faith rather than laches, but the dividing line smacks of being artificial. The relief is in the form of a mandatory injunction, that is the kind of injunction that directs another to take a particular action – here, canceling a registration or transferring the disputed domain name to the complainant – rather than prohibiting an action. An injunction is appropriate regardless of whether the claims are legal or equitable in nature (the formula for an injunction is “No adequate remedy at law”).

In Laminex, the Panel notes in concluding that “[d]espite having the opportunity to do so, Complainant has offered no explanation for the 14-year delay in bringing this Complaint. In light of the unexplained delay in bringing this proceeding, and the demonstrable harm to Respondent [which is ordinarily a consideration under 4(c)(i)] should the domain name be transferred, the Panel concludes that under the doctrine of laches, relief should be denied.” The Panel makes a point of quoting from prior UDRP decisions that make express reference to cases decided by United States courts. Allowing a laches defense is appropriate for parties (or, at least complainant) domiciled in the United States. For complainants in other jurisdictions, good and bad faith will rest on the quality of the submitted evidence.

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