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Defending Legitimate Interests: Common Words, Prejudice and Lapse of Time

We appear to have reached a stage on the Internet in which every dictionary word and many combinations have been spoken for as domain names. So much is this so that owners of newly minted trademarks composed of common words (who have not investigated domain name availability) find themselves having to buy the corresponding domain names from holders who have anticipated them. Although there have been quixotic proceedings to capture domain names, those acquired prior to trademark acquisition cannot by definition have been registered in bad faith. There are also situations in which long-standing trademark owners of common words and combinations wake up to find that others latterly registered domain names corresponding to their trademarks.

Capturing domain names identical or confusingly similar to trademarks held by someone else depends on the particular facts of each case, but the longer a trademark owner waits the less likely it is to prevail even if the trademark predates the registration of the domain name. Instrumentation Northwest, Inc. v. INW.COM c/o Telepathy, Inc., D2012-0454 (WIPO June 1, 2012) is a representative illustration. Complainant’s trademark, INW was registered on the Principal Register in 1989 with a first use in commerce 1986. Respondent acquired in 2007 as part of a purchase of more than 70 domain names comprised of three letters in the second-level domain. The Domain Name had originally been registered by another party in May 1997 and “apparently changed hands once before Respondent registered it, along with 70 other ‘three letter dot domains’ Respondent registered that year.”

While a complainant’s delay in initiating a proceeding to claim an infringing domain name may be consequential, UDRP Panels have generally rejected laches as an affirmative defense. 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 197. In fact, a “time bar” was rejected in a coda to “Time Limitations for Bringing Claims.” This is the view accepted by Panelists in the formative decisions. They held that “there is 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).

Nevertheless, as Instrumentation Northwest and numerous other cases illustrate dilatoriness has consequences. Delay favors respondents who over time have either established legitimate interests in the domain name, paragraph 4(c)(i) of the Policy, or against whom complainants can marshal no proof of bad faith registration. It has always been understood that the lengthier the period elapsing between domain name registration and commencing a proceeding the harder it is for a complainant to prove bad faith. As a result, Complainants are defeated by time (lack of proof) rather than laches (equitable bar).

The unavailability of laches has been increasingly questioned. In Instrumentation Northwest, the majority would have accepted the defense but “declines to rule on Respondent’s laches defense here, since it is unnecessary to do so in view of the Panel’s other rulings.” The decision continues:

Having said that, a majority of the Panel would have been prepared to apply the laches defense here, given the fact that Complainant sat on its perceived rights for many years (indeed, 15 years if one goes back to the original registration of the Domain Name). Because laches requires not only an untoward delay but also prejudice to the party asserting the defense, the Panel majority would also have to conclude that Respondent suffered prejudice as a result of the delay.

The heterodoxy that laches should be available as a defense first appears to have been articulated by a dissenting panelist in 2009. Vanguard Trademark Holdings USA LLC v. Nett Corp., FA1262162 (Nat. Arb. Forum July 26, 2009) (9 years, but the domain name was identical to the trademark). It reappeared in a unanimous 3-member Panel decision in the following year without reference to the dissenting analysis. The three member Panel in The New York Times Company v. Name Administration Inc. (BVI), FA1009001349045 (Nat. Arb. Forum November 17, 2010) allowed the defense (Complaint slept for six years) . Making reference to The New York Times, the 3-Member Panel in Harvard Lampoon, Inc. v. Reflex Publishing Inc., D2011-0716 (WIPO July 26, 2011) noted that although it has not applied the defense of laches it “has taken Complainant’s inaction [13 years] into account in deciding certain of the issues above.” The Panel’s view in The New York Times is that laches “should be expressly recognized as a valid defense in any domain dispute where the facts so warrant.” The Panel continued that there appears to be no “sound basis for ignoring the potential defense.”

The Panel in Instrumentation Northwest concluded that INW was a common word used by a Complainant in a niche market, therefore plausible that Respondent had no knowledge of its being a trademark. In addition, a Google search discovered that “inw” could be claimed by a number of businesses, a finding that undermines Complainant’s claim of bad faith registration.

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