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Dueling Constructions of the Policy When Panelists Concur as to Respondent’s Bad Faith Use

In words or substance panelists have stated in thousands of decisions that the UDRP is not a trademark court. Its jurisdiction is limited. It is not convened to determine trademark infringement or passing off claims. To find cybersquatting the trademark holder must prove that the respondent both registered (past tense) and is using (present tense) the domain name in bad faith. The jurisprudence of other dispute resolution policies and the ACPA are different. Some panelists have argued that the UDRP should be construed to eliminate the “and” where bad faith use is found under paragraph 4(b)(iv) of the Policy. Recourse where the respondent registered the domain name in good faith but is using it in bad faith is an action in a court of law. There is no prohibition for a foreign trademark holder to commence an ACPA action against a domestic respondent, although the cost may exceed the benefit – which is one of the reasons for trying the administrative route in the first place.

The dueling constructions of the Policy are presented again in Xbridge Limited v. Marchex Sales, Inc., D2010-2069 (WIPO March 1, 2011). The panelists do not disagree that the Respondent lacks rights or legitimate interests in the domain name:

While using domain names for the purpose of operating PPC websites is not necessarily an illegitimate use of a domain name, it does not automatically confer rights or legitimate interests in domain names by way of a bona fide offering of goods or services. [This is especially so] where links are generated for the purpose of capitalizing on another’s trademark value…. [Under these circumstances such use] will generally amount to [a] misleading diversion of Internet traffic and will not evidence a legitimate interest or right in the relevant domain name. This is [also] especially so where the PPC links divert users to goods and services competitive with the rights holder.

Three member Panels debating the conjunctive as opposed to disjunctive constructions of the Policy disagree that the Respondent registered the domain name in bad faith. The domain name in Xbridge, <> is a common phrase. There is no evidence that it was registered with the Complainant in mind – “At the time of registration, the Respondent could not have contemplated the Complainant’s then non-existent right. In such circumstances, the Respondent (under the name MDNH Inc.) did not acquire or register the disputed domain name in bad faith” – although its subsequent use takes advantage of the Complainant’s trademark.

The divergent views in Xbridge are summarized as follows:

[The Majority] In paragraph 4(a)(iii), it requires that the “domain name has been registered (…).” This includes a temporal requirement, looking back at the time the domain name was registered. One of the requirements of 4(a)(iii) is to consider what has been past conduct, and not merely use.

[The Dissent] The issue in dispute is very simple: it is whether the requirement of paragraph 4(a)(iii) that the domain name “has been registered and is being used in bad faith” must be interpreted as if it actually read “has been registered in bad faith and is being used in bad faith” (i.e., as if the italicized words had been added). I believe it should not be so interpreted. Rather, I believe that the correct interpretation is the one explained in the reasoning of the three-member panel in Jappy GmbH v. Satoshi Shimoshita, WIPO Case No. D2010-1001. As the panel in that case explained, the context of the Policy (including, in particular, paragraphs 4(b) and 2) and the purpose of the Policy (as explained in the Final Report of the WIPO Internet Domain Name Process, paragraph 168) make it clear that the requirement that the domain name “has been registered and is being used in bad faith” can, in certain circumstances (of which paragraph 4(b)(iv) is one), be satisfied in the absence of registration in bad faith.

The voices that support the disjunction model for the Policy would re-engineer it as a trademark court. “If that was the intent of those who crafted the Policy, one wonders why the word ‘or’ was not actually used.”


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