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Default Not An Admission of Material Facts

Respondents default in appearance in a high percentage of cases and in many of them the complainant prevails. However, a complainant is not entitled to relief simply because it has a trademark and a respondent does not suffer forfeit of the domain name because it defaults. This was illustrated most recently in General Electric Company v. Estephens Productions, D2009-1438 (WIPO December 17, 2009) (<>) in which the Panel found that the Respondent was legitimately operating under the name of “Global Executives Entertainment,” a Georgia business registered under the name of G.E. Entertainment, LLC.

It is not cybersquatting to register a domain name identical or confusingly similar to a complainant’s trademark, as long as it is not acquired to take economic advantage of a trademark pre-existing the registration of the domain name. Nor is it bad faith to speculatively register domain names for presumed future value. A holder of a future acquired trademark, for example, has no legal right to an earlier registered corresponding domain name. This principle is copiously applied, most recently in CruiseShipCenters International Inc. v. Leonard Brody, FA0912001297509(Nat. Arb. Forum February 10, 2010) (<>) in which the complainant provided no “arguments or additional supporting documentation regarding the date Complainant first established common law rights in the mark.”

To prevail a complainant must prove that the defaulting respondent has no right or legitimate interest [paragraph 4(a)(ii)] and that it registered and is using the domain name in bad faith [paragraph 4(a)(iii)]. In a small percentage of cases, as indicated in the General Electric and CruiseShip cases, the complainant is unable – in ignorance of the proof requirements – to marshal proof and the domain name stays with the respondent.In other, generally nondescript cases such as Philosophy Inc. v. 1-800-Therapist c/o Donald Hackett, FA0912001297666 (Nat. Arb. Forum February 2, 2010) Panels are authorized to draw inferences. Rule 14 of the Rules of the Policy reads:

(a) In the event that a Party, in the absence of exceptional circumstances, does not comply with any of the time periods established by these Rules or the Panel, the Panel shall proceed to a decision on the complaint.

(b) If a Party, in the absence of exceptional circumstances, does not comply with any provision of, or requirement under, these Rules or any request from the Panel, the Panel shall draw such inferences therefrom as it considers appropriate.

Although default is not an admission of material facts, there are consequences. A respondent put to its proof cannot ignore allegations and evidence that it has no rights or legitimate interests in the disputed domain name. Rule 5(b) requires the respondent to “respond specifically to the statements and allegations contained in the complaint.” Failure to rebut allows the Panel to draw an adverse inference. The reasoning is that if there were evidence, the respondent would have presented it.

The settled rule is that the Panel “is entitled to accept all reasonable allegations and inferences set forth in the Complaint as true unless the evidence is clearly contradictory,” Philosophy. The rule has been expressed in a variety of ways. Thus, if the respondent fails to respond, either because it has not answered or offers no explanation if it has, the Panel will assume that “the evidence would not have been favorable to respondent,” Mary-Lynn Mondich and American Vintage Wine Biscuits, Inc. v. Shane Brown, doing business as Big Daddy’s Antiques, D2000-0004 (WIPO February 16, 2000); again, allegations of fact unopposed that are reasonable, that is, more probable, may be accepted as true, Reuters Limited v. Global Net 2000, Inc., D2000-0441 (WIPO July 13, 2000) (“The Panel draws two inferences where the Respondent has failed to submit a response: (a) ‘the Respondent does not deny the facts which the Complainant asserts’ and (b) ‘the Respondent does not deny the conclusions which the Complainant asserts can be drawn from those facts’). In Philosophy, the Respondent redirected the Internet user to his own domain name <>). This constitutes bad faith under paragraph 4(b)(iv) of the Policy.

Gerald M. Levine, <>

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