There has lately been a number of long-held investor registered domain names transferred to complainants under the Uniform Domain Name Dispute Resolution Policy (UDRP). Two of the domain names were registered 23 years ago. This has provoked several commentators to complain that the UDRP is tilted in favor of mark owners and trademark-friendly panelists expressing hostility to the domain industry. I think we have to dig deeper than this. Although the UDRP was established as a rights protection mechanism for marks (and remains the regime of choice for resolving claims of cybersquatting) it has evolved into a balancing of rights jurisprudence. It is not tilting in either direction that determines who prevails, but the particular facts each brings to the record. In many instances, losing valuable domain names or failing to secure them comes about because parties fail to appreciate the evidentiary demands of the UDRP.
Mark owners only have actionable claims if their marks predate domain name registrations. This should be obvious, but they persist anyway. Charles E. Runels, Jr. v. Domain Manager / Affordable Webhosting, Inc., Advertising, FA1709001749824 (Forum October 30, 2017) (<pshot.com>). Respondents can lose valuable assets for failure to pay attention to the contents of the resolving websites. I mentioned curation in a recent essay and I think it’s worth repeating, Vulnerabilities of Weak Marks and Uncurated Websites. Respondents cannot prevail where the contents of resolving websites carry infringing links (even if the links are strategically or for other reasons removed). No domain names identical or confusingly similar to marks (however old) are invulnerable to charges of cybersquatting. The fault is not panelists putting their fingers on the scale (although there may be examples of when they do), but respondents’ failures to act in their own best interests.
I have noticed in following UDRP decisions and representing clients that some investors owning fewer than vast numbers of domain names and others owning portfolios of vast numbers acquired from earlier investors, because they are not focused on curating their holdings have no defense to challenges of cybersquatting. Panels make their determinations on the factual records before them not on the length of time respondents have owned challenged domain names.
The most recent example of this is <imi.com> (registered 1997), Irving Materials, Inc. v. Black, Jeff / PartnerVision Ventures, FA1710001753342 (Forum November 7, 2017) (discussed in the mentioned essay. Respondent did not appear and consequently there was no counter-narrative that may have explained its choice). The Panel stated that “Complainant’s screenshot confirms [that] … the domain name contains various IMI related links and descriptions of the content located at the linked webpage.” Whether Respondents in two pending proceedings for <ktg.com> and <ivi.com> will follow <imi.com> or successfully protect their assets depends entirely on the record.
Even if respondents prevail in UDRP proceedings for no bad faith registration, current or past infringing use could still be actionable under the Anticybersquatting Consumer Protection Act (ACPA). The earliest example I know of is Newport News, Inc. v. Vcv Internet, AF-0238 [eResolution July 18, 2000]) in which Respondent prevailed but lost in an action under the Anticybersquatting Consumer Act (ACPA), Newport News Holdings Corporation v. Virtual City Vision, Incorporated, d/b/a Van James Bond Tran, 650 F3d 423 (4th Cir. 2011).
The reason for Respondent losing <newportnews.com> should be cautionary to all investors. The mark owner wisely chose to commence an action under the Lanham Act rather than refile a UDRP proceeding when in 2008 the respondent/defendant “shifted its focus away from the legitimate service of providing information related to the City of Newport News” to competing with the plaintiff for Internet traffic. The court held that a domain name holder “cannot escape the consequences of its deliberate metamorphosis.” Plaintiff successfully moved for partial summary judgment on its ACPA claim and obtained in addition to the domain name substantial statutory damages. There was also, more recently, the “just bulbs” case, Bulbs 4 East Side Inc., d/b/a Just Bulbs v. Fundacion Private Whois/ Gregory Ricks, D2013-1779 (WIPO January 13, 2014) (Complaint denied, but successful in ACPA action, Bulbs 4 E. Side, Inc. v. Ricks, (S.D. Tex., Houston Div. July 18, 2017 together with an award of damages for $50,000 and attorney’s fees)..
Losing valuable domain names through complacency has to be taken seriously by all ranks of investors. In Maurice Mizrahi / Mizco International, Inc. v. Chi Hyon, FA1710001754962 (Forum November 20, 2017) Respondent contended that it “registered on June 22, 2001 because it is a combination of two English words ‘digi’ (abbreviation of digital) and ‘power’, to which Respondent believed no party could claim exclusive rights.” The explanation for its choice sounds plausible until the facts are laid out in the record. The three-member Panel (including sole Panel on the IMI case) had a record that undercut Respondent’s contention of innocence:
[It] has proffered no evidence to establish its purpose in registering the Disputed Domain Name, nor that Respondent made use of the domain name in a manner consistent with any proper purpose. In fact, the only use Respondent has made of the Disputed Domain Name is to link it to batteries, which is the exact same business Complainant is in. (Emphasis added).
The point is that it is not inconceivable for a registrant to choose “digi” and “power” or random letters such as “imi” that are also acronymic marks without having knowledge of a preexisting mark (in both cases common law marks), but to prevail respondents would have to show a use “consistent with [a] proper purpose.” Therefore, the Respondent in Maurice Mizrahi is either lying about its motivation or was truly innocent but failed to properly curate its website. It excused the contents on its website by explaining that it
used domain names to display PPS (pay-per-sale) links supplied by Rakuten marketing related to general interest topics related to the general meaning of the words “digi” and “power.” [It] did not select the links on its resolving website with the intent to profit from any trademark owners, including Complainant. The links result from selections made by automated software technology.
I have called this the “not me” defense, which of course is no defense at all. WIPO’s Jurisprudential Overview (3rd Edition) Paragraph 2.9, asks and answers the question: “Do “parked” pages comprising pay-per-click links support respondent rights or legitimate interests?” The answer is Yes, when they are not infringing; No when they are. One further point can be made, in fact it should be underscored, which is illustrated in both the <digipower.com> and <imi.com> cases, the length of time domain names are held by the respondent is not a defense. If passage of time favors respondent it is not because of laches.
Cases such as <imi.com> (and others that will surely come along) support the conclusion that failure to monitor content (allowing it to become interfering and infringing) is the primary cause of loss. I think investors (particularly of large portfolios) are likely to see more of this, and would be well advised to curate their holdings especially of dictionary word and random letter domain names.
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, 2015). Learn more about the book at Legal Corner Press. Available from Amazon and Barnes & Noble. Supplement and Update through August 2016 published January 2017. The Supplement and Update is also available in pdf format free on the publisher’s website, www.legalcornerpress.com/dna-supplement.