There are predatory-domain name registrants; and there are registrants engaged in the legitimate business of acquiring, monetizing, and reselling domain names. That there are more of the first than the second is evident from proceedings under the Uniform Domain Name Dispute Resolution Policy (UDRP). “Given the human capacity for mischief in all its forms, the Policy sensibly takes an open-ended approach to bad faith, listing some examples without attempting to exhaustively enumerate all its varieties. Worldcom Exchange, Inc v. Wei.com, Inc., D2004-0955 (WIPO January 5, 2005). But, it is also evident that the Policy is even-handed, and that some of the “mischief” comes from mark owners. Metamark (UK) Limited v. Andrew Longton / Metamark Corporation, FA190900 1864151 (Forum September 30, 2019) (METAGLIDE and <metamark.com> in which the Complainant not only failed to prove the domain name was identical or confusingly similar to its mark, but the domain name was registered 20 years before the mark came into existence).
The question to be answered in UDRP proceedings, and no less so in actions under the Anticybersquatting Consumer Protection Act (ACPA), is whether a challenged registrant knowingly registered a domain name corresponding to a mark with the unlawful purpose of taking advantage of its goodwill and reputation. Mark owners may be irked that certain words and combinations are already registered, but they forget there are competing interests in the cyber marketplace, and getting there first is a time honored practice. It is not unlawful to have registered (before the existence of a mark) or to register domain names (after it) identical or confusingly similar to marks if there is neither intention to target nor knowledge of the mark. Sarah Lonsdale & Stuart Clark t/a RocknCrystals v. Domain Admin / This Domain is For Sale, HugeDomains.com, D2019-1584 (WIPO September 6, 2019) (<rockncrystals.com>).
The UDRP jurisprudence that has developed over the past twenty years confirms three points: a) that a mark owner’s exclusive rights are no greater than the law allows, b) that the facts will be weighed (as one would expect in an adjudicative proceeding) to determine the lawfulness of domain name registrations, and c) that the law is no less protective of respondent as it is of complainant. In FPK Services LLC DBA HealthLabs.com v. Contact Privacy Inc. Customer 1241257718 / Michael Gillam, D2019-1483 (WIPO October 10, 2019) Complainant’s mark predated <healthlab.com>, but “there is nothing in the record to indicate that Respondent was aware of Complainant or its alleged mark at the time the Domain Name was acquired in 2017). One of the factors Panels take into account is the strength or weakness of the mark; as the Panel points out, descriptive marks are not inherently distinctive absent proof of secondary meaning.
Both the UDRP and the ACPA are crafted to combat cybersquatting and to some extent have overlapping jurisdictions, although there are good reasons for filing a claim in federal court for the opportunity of pleading in the alternative for trademark infringement. The UDRP is not a trademark court and for cybersquatting it should not be assumed that the outcomes will be the same in both fora. A Panel’s judgment applying UDRP law may be different from a Judge’s under the ACPA.
Take, for example, a claim mis-labeled as cybersquatting which is more likely actionable (if actionable at all) for trademark infringement. That which is outside the scope of the UDRP can be within the scope of the ACPA;, or if not that, of the Lanham Act § 43(a). The Panel in Ascension Health Alliance v. Prateek Sinha, Ascension Healthcare Inc., D2018-2775 (WIPO January 25, 2019) (<ascension healthcare.com>) suggests the claim is in the wrong forum: “[a]lthough Complainant may have the starting ingredients of an ordinary, trademark infringement case against Respondent, the Complainant has not demonstrated to the satisfaction of the Panel that Respondent is not making a bona fide offering of services.” See also Trivago N.V. v. Adam Smith, D2019-1957 (WIPO October 20, 2019) (<TRIVAGO and <traveltrow.com>. “Complainant [may very well have] a valid trademark infringement or unfair competition cause of action against Respondent in a court of law.”)
The reason for different results begins with the different evidentiary requirements. Under the UDRP a trademark complainant prevails only on proof of bad faith registration and bad faith use; bad faith use alone is insufficient (the conjunctive model). In contrast, the ACPA is satisfied on either/or proof: bad faith registration or bad faith use or trafficking in in bad faith (the disjunctive model), with the result that mark owners can lose in the UDRP and prevail in the ACPA. Two cases illustrating this point are Newport News Holdings Corporation v. Virtual City Vision, Incorporated, d/b/a Van James Bond Tran, 650 F3d 423 (4th Cir. 2011) for <Newport news.com>; and Bulbs 4 E. Side, Inc. v. Ricks, 199 F.Supp.3d 1151 (S.D. Tex., Houston Div. August 10, 2016) for <justbulbs.com>).
In the earlier UDRP Newport News proceeding, the Respondent had successfully argued it had rights or legitimate interests because it was using the domain name in good faith to “disseminate city information in an effort to increase tourism and other visitor traffic to the city”; but years after the UDRP defendant changed its use to compete with Plaintiff. It would not have been actionable in a new UDRP but became actionable under the ACPA. The “just bulbs” Plaintiff was unsuccessful in two UDRP complaints before it prevailed on summary judgement on the ACPA claim; its trademark infringement motion was denied on a finding of genuine issues of material fact.
There is also another, related difference in the jurisprudence applied in UDRP proceedings and court actions. Under the UDRP, a renewal of registration of a domain name arguably used in bad faith but registered in good faith is not actionable, while under the ACPA and the Lanham Act it is. Under UDRP renewal is simply regarded as a continuation of the registrant’s holding, not a new registration. (Bad faith is measured from the registration of the domain name by the challenged registrant). In Tergus Pharma, LLC v. Domain Administrator, DomainMarket.com, D2019-1787 (WIPO September 24, 2019) (<tergus.com>) the Panel noted that
the clear consensus view of WIPO UDRP panels is that the mere renewal of the domain name registration is not the relevant point in time to assess if there was bad faith in the “registration” of the domain name for purposes of the Policy, paragraph 4(a)(iii).
This is so, even though the Respondent appears subsequently to be using the domain name in bad faith: “[F]or whatever reasons, [Respondent] mentions the Complainant on the web page advertising the Domain Name on the [its] website. Far from enhancing the value of the Domain Name, this may serve to warn a prudent bidder that it could be buying a lawsuit or a UDRP action.” The UDRP consensus is described in WIPO Overview 3.0 at section 3.9.
Contrast for renewal as bad faith an ACPA decision (direct action in federal court), Jysk Bedn Linen v. Dutta-Roy, 810 F.3d 767, 777 (2015) the court noted that “[i]n a sense, the cybersquatter muddies the clear pool of the trademark owner’s goodwill and then profits off the resulting murkiness.” Re-registration with knowledge of the trademark is a key factor in determining bad faith. In this particular case.
[w]hen Dutta-Roy re-registered bydesignfurniture.com under his own name rather than Jysk’s, he was expressing his intent or ability to infringe on Jysk’s trademark. He admitted that he never had used the domain names in the bona fide offering of any goods or services. His demand for money can be looked at in two ways, and they are two sides of the same coin. First, the amount of money demanded could show how much he believes the domain name smudges the goodwill of the trademark — that is, how much money Jysk would lose out on if Dutta-Roy were to use the domain names to misdirect Jysk’s customers. Second, the amount of money demanded could show how much value he believes Jysk puts on the domain names. In either case, bad-faith intent abounds.
It would be nonsensical to exempt the bad-faith re-registration of a domain name simply because the bad-faith behavior occurred during a noninitial registration, thereby allowing the exact behavior that Congress sought to prevent.
There can be no safe harbor for domain name holder, 15 U.S.C. § 1125(d)(1)(B)(ii), where it has no legal basis for re-registering the domain name.
The benefit of filing a complaint in federal court is that plaintiffs are not confined to cyber-piracy claims; they can plead in the alternative for relief under the Lanham Act, § 43(a). As noted in the Ascension Health Alliance and Trivago cases, it is not as though Complainants are entirely wrong in challenging unlawfully registered domain names, but their remedy may lie in federal court under the Lanham Act as a backup to their cyber-piracy claims.
This brings us to a more recent federal case that illustrates the benefit. In ZP_314_v_ ILM_Capital., 1:16-cv-00521-B (S.D. Alabama September 30, 2019) the court found plaintiff was entitled to relief for trademark infringement on summary judgment but not its ACPA claim, (My thanks to Evan Brown for bringing this case to my attention in one of his blog posts). In an earlier decision on competing summary judgment motions reported at 335 F.Supp.3d 1242 (2018) the Court concluded that Plaintiff stated a claim under the ACPA:
As a preliminary matter, the undersigned notes that the parties dispute whether Defendants’ re-registration of the subject domain names in March 2017 and May 2018 constitutes an actionable offense under the ACPA…. The Eleventh Circuit firmly resolved this issue when it held that, “[t]he plain meaning of register includes a re-registration[,]” such that re-registration falls under the purview of the ACPA. Jysk, 810 F.3d at 777 (“It would be nonsensical to exempt the bad-faith re-registration of a domain name simply because the bad-faith behavior occurred during a noninitial registration, thereby allowing the exact behavior that Congress sought to prevent.”)
But there is a difference between having an actionable claim for bad faith use and proving the elements for it on trial. For an ACPA claim, the “only element requiring proof at trial was bad faith intent to profit” (15 U.S.C. § 1125(d)(1)(A). The phrase “intent to profit” is not found in the UDRP, although implicit in Paragraph 4(b)(iv): “by using the domain name, you have intentionally attempted to attract, for commercial gain, Internet users to your web site or other on-line location, by creating a likelihood of confusion with the complainant’s mark as to the source, sponsorship, affiliation, or endorsement of your web site or location or of a product or service on your web site or location.”
In ZP No. 314 (trial decision, page 35) the Court distinguishes “bad faith intent to profit” from mere bad faith:
Without question, the factors enumerated above [referring to the statutory nine factors of the ACPA] strongly suggest bad faith on the part of Defendants. This finding is bolstered by evidence from which it reasonably can be inferred that Defendants’ conduct in registering domain names that are identical or confusingly similar to the marks of ZP, their direct competitor, was not an isolated occurrence, but appears to be Defendants’ mode of operation.
“Mere bad faith” is sufficient for a UDRP award, but not in court: “proving mere bad faith is not enough” because “[a] defendant is liable only where a plaintiff can establish that the defendant had a ‘bad faith intent to profit.’” 15 U.S.C. §1125(d) (emphasis in original), citing Southern Grouts & Mortars, Inc. V. 3M Company, 575 F.3d 1235, 1246 (11th Cir. July 23, 2009). Under the UDRP, “mere bad faith” is sufficient if coupled with bad faith registration.
Having resolved the ACPA claim by dismissing it, the Court then turned to the § 43(a) claim. It found that the “only question that remained at trial was whether Defendants’ use of the marks after July 2017 constituted ‘use in commerce.’” Here, the Court distinguishes between cyber-piracy and trademark infringement (pages 24):
In the present case, the Court previously found as a matter of law that the domain names at issue were confusingly similar to ZP’s marks and that ZP had acquired secondary meaning (i.e., had a protectible interest in the marks) after July 2017…. Therefore, the only question that remained at trial [the 43(a) claim] was whether Defendants’ use of the marks after July 2017 constituted “use in commerce.”
And the Court found that Plaintiff proved it was (page 27):
Based on the foregoing, the Court finds that Defendants’ use and re-registration of the eight infringing domain names after July 2017 (when ZP had obtained trademarks on “One Ten” and “One Ten Student Living”), which included “parking” eight infringing domain name webpages with ZP’s marks prominently displayed at the top of the page, with click through links to various other vendors’ goods and services, constituted use in commerce under common law and the Lanham Act.
Jysk and ZP No. 314 the factual circumstances are outside the scope of the UDRP because in Jysk the bad faith follows a re-registration of the domain name and in ZP there is insufficient evidence in the summary judgment submission to support cybersquatting.
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, 2nd Edition 2019). The treatise is available on Amazon and Barnes & Noble. If you purchased the First Edition, you can buy the Second Edition 50% off list price by contacting inquiries@legal cornerpress.com or email@example.com. The discount will not be available from Amazon and Barnes & Noble.