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Passive Holding of a Domain Name Composed of a Dictionary Word; Also a Well Known Brand

The rule of non-use of a domain name incorporating a well known trademark was laid down in Telstra Corporation Limited v. Nuclear Marshmallows, D2000-0003 (WIPO February 18, 2000). The Panel fashioned a five-point test. Point five is that “it is not possible to conceive of any plausible actual or contemplated active use of the Domain Name by the Respondent that would not be illegitimate….” However, when a domain name confusingly similar to a well known trademark composed of a dictionary word is in dispute no definitive inference can be made under paragraph 4(b)(iv) of the Policy that the registration was illegitimate. There is no law that mandates a registrant must use its domain name. “[P]assive holding’ does not constitute bad faith per se,” Ceyx Technologies v. Ceyx.Com, D2001-0681 (WIPO July 9, 2001). The Complainant in Hostess Brands, Inc. f/k/a Interstate Bakeries Corporation v. Domain Capital, D2009-1357 (WIPO December 1, 2009) demanded transfer of <>, but it is certainly “possible to conceive” “hostess” being used in its generic sense. It is only when the respondent launches its website that a conclusion can be drawn that it does or does not violate the complainant’s rights.

Hostess Brands argued two points, that the domain name had previously been used in bad faith and that the Respondent had been named in prior UDRP proceedings. On the first, “Complainant has provided no evidence that Respondent has used the Domain Name in this way…. Hence, Complainant goes too far in making such an unsupported assertion.” On the second, the Respondent is not the beneficial owner of the domain name but a secured party holding the domain name as collateral for a loan. However, “in each of those [prior] cases the panels found that it was the Respondent’s use of the disputed domain names, or the third-party purchaser’s use of the disputed domain names, which gave rise to a finding of bad faith. Here, by contrast, Respondent and the putative third-party purchaser have made no use of the Domain Name at all.”

Before the proceeding <> may have looked like an attractive property, but the value of a domain name is not enhanced when there are constraints in populating the website. In the case of <> it cannot be used as a search site for goods similar to those marketed by Hostess Brands; or for adult websites without running afoul of the inference that the domain name was chosen to create “a likelihood of confusion with the Complainant’s mark as to the source, sponsorship, affiliation, or endorsement of your web site or location or of a product or service on your web site or location.”

In order to persuade a Panel that the respondent lacks legitimate interest in a domain name the complainant must offer persuasive evidence showing that the purpose for registering the domain name was to take advantage of its trademark. This is a difficult assignment when the trademark is composed of a dictionary word and the domain name is inactive. “Without any further evidence of specifically targeting Complainant and its trademarks, or use of the Domain Name in a manner that supports a finding of seeking to profit from Complainant’s mark, this Panel cannot, on the balance of the probabilities, adopt the inferences which Complainant urges,” Hostess, supra.

What is a trademark holder to do? There are a growing number of cases in which Panels essentially find that the UDRP proceeding is premature and complainants are advised to return when the factual circumstances support their claim. That appears to be the message in the Panel’s coda: “if Respondent, in the future, would attempt to extract a significant sum from Complainant for purchase of this Domain Name identical to Complainant’s HOSTESS trademark, these circumstances may provide support for application of the Policy’s paragraph 4(b), indicating bad faith when a respondent ‘registered or […] acquired the domain name primarily for the purpose of selling, renting, or otherwise transferring the domain name registration to the complainant who is the owner of the trademark…’.”

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