Domain names are not literally owned, but possessed for variable lengths of time pursuant to registration agreements that must be periodically renewed. The better analogy is with a valuable leasehold interest with unlimited options to renew that can be lost if renewal is not timely exercised. Owners of “strong” trademarks have a higher degree of security from inadvertent lapse because trademarks are property in the full sense of the term. Trademark owners do not lose their statutory priority over respondents registering lapsed domain names. However, holders of trademarks on the lower end of the classification scale and those claiming unregistered rights carry a heavier burden. Although equally protected in theory, in practice complainants’ ability to reclaim lapsed domain names incorporating lesser known and unregistered marks cannot succeed without proof of respondents’ actual knowledge of them and their trademark.
The heavier burden principle is illustrated in Paper Denim & Cloth, LLC v. Pete Helvey, FA1201001425020 (Nat. Arb. Forum March 5, 2012) and Rusta AB v. Daruna, LLC., D2011 -1887 (WIPO February 2, 2012). Although Complainant’s trademark is registered on the Principal Register of the USPTO it is comprised of three common words “paper,” “denim” and “cloth.” The Panel held that
Complainant has provided no evidence that its mark … is sufficiently well-known as to enable the inference to be drawn that Respondent must have had that mark in mind when he registered the Domain Name. Nor is there any other evidence from which the Panel can conclude that Respondent had Complainant or its trademark in mind when he registered the Domain Name.
Panels have taken one of three positions when the complainant fails inadvertently to re-register its domain name: 1) favoring the fanciful and arbitrary and perhaps the suggestive, Donna Karan Studio v. Raymond Donn, D2001-0587 (WIPO June 27, 2001) (); 2) disfavoring the generic and descriptive, Paper Denim & Coth and Rusta; and 3) rejecting excuses altogether, Corbis Corporation v. Zest, FA0107000098441 (Nat. Arb. Forum September 12, 2001) (Three member Panel: “There is an element of ‘finders keepers, losers weepers’ in this decision. We believe that is as it should be.”). In Rusta, the Complainant waited almost 11 years before challenging Respondent’s registration of the lapsed domain name.
The third category, “weepers-losers” has been criticized as a “quaint and classing saying” but “an oversimplification of the underlying law.” World Wide Commerce Corporation v. WebContents, Inc., FA0712001124467 (Nat. Arb. Forum February 13, 2008). The fact that a domain name registration has expired and inadvertently lapsed “does not mean that the respondent has any right to use a well-known trademark as its domain name when such use could cause confusion to consumers and damage to the owner of the trademark.” Donna Karan Studio. The loser’s right is enhanced or undermined by the nature and relative strength of the mark in the context of “rights in the domain name” and “bad faith.”
Although trademark owners do not lose their statutory priority over respondents registering lapsed domain names, FBomb Clothing c/o Joel Jordan v. Domainly.com, FA0902001245522 (Nat. Arb. Forum March 16, 2009), argument that registration alone is sufficient to put respondents on notice of third party rights has been rejected: the UDRP does not embrace the doctrine of “constructive knowledge.” As the Panel explains in Paper Denim and Cloth,
Despite some Panel decisions to the contrary, there is no place for the concept of constructive knowledge under the Policy, the essence of the complaint being bad faith targeted at the complainant, necessarily involving the cybersquatter having actual knowledge of the existence of the complainant, the trade mark owner: Way Int’l Inc. v. Peters, D2003-0264 (WIPO May 29, 2003).
As prior Panels have also explained: “The Policy was not intended to permit a party who elects to register or use a common term as a trademark to bar others from using the common term in a domain name, unless it is clear that the use involved is seeking to capitalize on the goodwill created by the trademark owner”. Harvard Lampoon, Inc. v. Reflex Publishing Inc., D2011-0716 (WIPO July 26, 2011), citing Match.com, LP v. Bill Zag and NWLAWS.ORG, D2004-0230 (WIPO June 2, 2004).