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Passive Holding of Domain Name Not Grounds for Forfeiture

It is an interesting phenomenon that complainants and their counsel continue to believe that trademark owners have greater rights to corresponding domain names than domain name holders who have priority of registration. Their arguments unfold in a familiar line of false reasoning that inactivity of use and renewal of registration (to take just two contentions) somehow affect rights in the domain name whereas the law is clear that neither circumstance supports forfeiture. It may be asked “why do complainants commence UDRP proceedings if they cannot possible prevail?” The answer is that the cost of trying is not financially burdensome and the worst is a mild slap on the wrist by way of reverse domain name hijacking.

Complainant in Edatanetworks Inc. v. Joe Racek, Network of Giving, D2015-1608 (WIPO November 18, 2015) represented by counsel alleged that “[t]he disputed domain name <> has had no data [although there was evidence of past use] and it currently redirects to the other disputed domain name [<>]. The contention could never support is claim for entitlement! Even a verified fact that earlier registered domain names were passively held  and only commenced use after complainant’s alleged first use in commerce is not persuasive respondent had complainant or its trademark in mind when it registered the domain names (how could it have done!).

The Panel in Edatanetworks also explains Complainant’s burden in a UDRP proceeding. Default in answering a complaint in a UDRP proceeding is not an admission of liability, although silence can frequently work in complainant’s favor: “A respondent’s default does not automatically result in a decision in favour of the complainant. See paragraph 4.6 of the WIPO Overview of WIPO Panel Views on Selected UDRP Questions, Second Edition (“WIPO Overview 2.0”). While a panel may [draw] appropriate inferences from a respondent’s default (e.g., to regard factual allegations which are not inherently implausible as being true), the complainant must still support its assertions with actual evidence in order to succeed in a UDRP proceeding.” (Emphasis added).

More importantly, the record in Edatanetworks undermines Complainant’s contentions of bad faith. “For example, the archive printouts for <> from 2008 to 2014 exhibited by the Complainant give the impression that, during that period, the Respondent was providing a genuine service facilitating charitable donations.” In essence, Complainant has provided the kind of rebuttal facts that would have been expected from the Respondent if it had appeared.)

The combined circumstances that Respondent is no longer in business (“[a]t some unspecified point . . . the corporation was recorded as ‘terminated’”), its domain names are no longer active (“ha[]s [no] current right or legitimate interest in the disputed domain names as they do not currently resolve to an active website), its Whois entry is out of date (“[m]ultiple attempts to contact the Respondent through the contact details shown on the WhoIs listing have been unsuccessful”), and renewing its registration when it should have known about Complainant’s trademark, in no way supports the conclusion that Complainant is entitled to the domain names.

There are circumstances under which passive use supports bad faith. The leading case (cited by Complainant in Edatanetworks) is Telstra Corporation Limited v. Nuclear Marshmallows, D2000-0003 (WIPO February 18, 2000), but it is easily distinguishable. The trademark in Telstra predated the domain name and was well-known. Passive use alone is never conclusive; is one of the factors to be taken into account. The Panel’s view In Edatanetworks is that “this case falls well outside the scenario outlined in Telstra Corporation Limited v. Nuclear Marshmallows . . . whereby UDRP panels must examine all of the circumstances of the case to determine if a passive holding can be considered as use in bad faith.. . . Not only are there no relevant circumstances here (for example, there is no evidence supporting the Complainant’s claim that its trade marks were well-known), even if there were, they would not avail the Complainant given the lack of registration in bad faith.”

Since the Respondent defaulted in Edatanetworks (and hence there was no request for reverse domain name hijacking) the Panel did not raise the issue sui sponte although it is not unheard of for panelists to do so where no reading of the facts support complainant’s contentions of bad faith registration and use.

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. (2015, 558 pages). Learn more about the book at Legal Corner Press. Available from Amazon and Barnes & Noble.  Ongoing Supplement here

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