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UDRP and the Law: Should Cybersquatting be the Default View?

I have returned to the subject of the title on a number of occasions and it is worth revisiting. Like judicial proceedings, the substance of disputes under the Uniform Domain Name Dispute Resolution Policy (UDRP) and Panel determinations are publicly available. The Internet Corporation for Assigned Names and Numbers (ICANN) mandates in its Rules that all decisions must be delivered to the parties within “three business days” of their receipt of the decision and posted on providers’ websites. I have noted in earlier essays that public availability of underlying narratives and Panels’ reasoning to determination is conducive to a buildup of a jurisprudence of domain names and that this jurisprudence is distinct from trademark infringement law. It favors outcomes on the merits rather than on a Panel’s interest-based experience. It also favors consensus views to the extent they have been achieved. This, in turn, supports predictability of outcome and is a highly valued feature of the UDRP.

The question that arises and concerns us here is the general perception of respondents alleged to be cybersquatting who are not that at all. There have in the past been questionable decisions that have bent in the wrong direction such as <> (bad faith based on respondent being a certain kind of “speculator” ) (2000) and <> (bad faith based on respondent demanding too high a price for the domain name) (2018) (points well-argued by Nat Cohen of Telepathy, Inc. most recently in an online interview). Interestingly the analysis in <> turned out to be a dead end which did not help Telepathy, the Respondent in that case. ( See earlier essay, Dead Ends: The Achievement of Consensus in UDRP Jurisprudence). The jurisprudence on the issue of speculation developed more along the lines analyzed by the dissent; with <>, the UDRP award was vacated by stipulation in a subsequently filed lawsuit under the Anticybersquatting Consumer Protection Act (ACPA) in favor of the domain name holder. No doubt there will be future questionable decisions for which the only remedy, there being no appeal process within the UDRP, is an action in a court of competent jurisdiction (the ACPA in the U.S), but overall (grumbling aside) the UDRP performs well for both mark and brand owners as well as domain name investors. Some would-be principles biased in favor of brand owners such as “retroactive bad faith” and bad faith based on domain name renewal date have been rejected and the theories officially discarded.

That domain names may be identical or confusingly similar to trademarks or service marks only gets a complainant to first base in a UDRP proceeding. How do panelists perceive these registrants who lawfully register domain names? Do they come to their task interest based by their representation of brand and trademark owners for it is no secret that a very high percentage of panelists are drawn from that rank and very few from the ranks of those representing parties alleged to be cybersquatters?

The questions cannot, of course, be answered with absolute certainty and care has to be taken to avoid falling into one’s own  prejudice, but some clue to panelists’ neutrality can be drawn from the decisions. The jurisprudence as it has developed is strong in protecting interests however the facts align. The jurisprudence as it has developed is strong in protecting interests; however the facts align. Approximately 8% of complaints are dismissed. In those complaints that have been upheld and domain names transferred, some are likely questionably decided and inflicting pain, a few f them (like the ADO award vacated or correct in ACPA actions. .

When we come to consider the matter, it is important to take note of how a jurisprudence develops and its stabilizing effect on neutrality. This is curiously illustrated in a Tweet posted a couple of weeks ago referencing a just-decided dispute involving DSPA B.V. v. Bill Patterson, Reserved Media LLC, D2020-1449 (WIPO August 13, 2020). In the Tweet Nat Cohen   congratulated John Berryhill in successfully defending <> and Mr. Berryhill responded with this important assertion: the “Panel [he stated] relied on Instrumentation Northwest, Inc. v. INW .COM c/o Telepathy, Inc. D2012-0454 (WIPO June 1, 2012) (<>).” I underscore “relied on” because that captures the essence of how the law develops. Earlier decisions as they are tested for their acuity and good sense become the foundation of the jurisprudence. It is obvious that the majority’s “crew” analysis did not have the support of other panelists and its  “speculator” view became a dead end.

For parties, consistency and predictability are an essential virtue of a judicial proceeding. No one wants to be surprised. This goes for routine disputes as well as others involving more complex facts . Cases involving dictionary words, common phrases, arbitrary letters that could be acronyms, and cultural expressions like “down pat”— iCommand Ltd v. Johnny Gray, ArtWired, Inc., D2020-1438 (WIPO August 11, 2020)—constitute a very small percentage of cybersquatting disputes, but because these domain names are generally held by investors (speculators to some!) in the business of acquiring and reselling domain names they present a telling commentary on how the perception should be framed.

Approximately ninety two percent of complaints are against domain name holders who have no defense to their registrations and who rarely appear to defend their choices, so it is not surprising there would be a general perception among those impacted that all registrants accused are cybersquatters. The high percentage no doubt contributes to a myopic perception. But whatever the perception may be, when it comes to asserting a claim the outcome is on the merits. Respondent does not have to prove good faith; complainant has to prove bad faith.

In a recent online interview I was presented with a series of questions. One of them seemed to suggest an equation between cybersquatters and investors: “Many domain investors think taking a risk on a clearly infringing domain is no big deal. Some have made jokes others have talked about earning parking revenue until they get a UDRP.” My response: “The question must be rephrased to read ‘many domain cybersquatters’ may think it not a ‘big deal.’ Cybersquatters can take the ‘no big deal’ position because the worst remedy under the UDRP is losing the domain name. That’s why they could care less.” This too obviously fuels brand owners’ perception of domain name registrants, but there is no equation between cybersquatters and investors.

Indeed, the point about lawful registration and use is emphasized with great clarity in the Concurrence in iCommand:

Complainant takes exception to the fact that the Domain Name is for sale at what is, in its opinion, a “highly inflated” price. This again, is not a ground of bad faith and in any event, whether the price demanded by a seller of any commodity is excessive is, like beauty, in the eye of the beholder,

When we talk about perception, then, we mean a first reception of the matter by those not specifically knowledgeable about the facts and the law or biased to a view regardless of the facts and the law.  It is a sort of “first impression.” When we look closely at cases like DSPA and iCommand  we see panelists reflecting on the merits of a complaint. In fact, this even-handed approach is reflected in the WIPO Overview:

Panels have recognized that merely registering a domain name comprised of a dictionary word or phrase does not by itself automatically confer rights or legitimate interests on the respondent; panels have held that mere arguments that a domain name corresponds to a dictionary term/phrase will not necessarily suffice.


Over the course of many UDRP cases, panels have acknowledged further grounds which, while not codified in the UDRP as such, would establish respondent rights or legitimate interests in a domain name. For example, generally speaking, panels have accepted that aggregating and holding domain names (usually for resale) consisting of acronyms, dictionary words, or common phrases can be bona fide and is not per se illegitimate under the UDRP.

Whether the registration is lawful or unlawful depends on the domain registrant’s intention as that is disclosed directly or inferentially by the evidence. Two cases can be offered to illustrate the point. In Mr. Gildo Pallanca-Pastor v. Tech Admin, Virtual Point Inc., D2020-1698 (WIPO August 20, 2020) (<> the challenged domain name is a coined word which has attracted several businesses to use it in commerce—”[s]ome are using the term as a business name and others as a product name”—before Respondent acquired it in a registrar’s auction. Citing earlier cases (as we saw in the Berryhill comment), the Panel noted that “[i]n the context of domainers, panels have generally assessed the issue of registration in bad faith objectively” (emphasis added).

In the second case, Insider, Inc. v. DNS Admin / Contact Privacy Service, FA1912001874834 (Forum February 3, 2020) the phrase in dispute is “business insider.” At first glance, this may seem like a lawful registration of a common phrase, but this was not supported by the evidence.  Panel noted that “where it is found . . . that a respondent’s modus operandi can be summarized as registration of a domain name that is confusingly similar to the mark of another followed by exploitation of the domain name for profit while awaiting its eventual sale, the ‘reseller’ label will not serve to avoid a finding of bad faith in the registration and use of the domain name.”

These cases and the WIPO Overview contradict interest-based determinations: “investing in genuinely generic terms, for purpose of resale, [that would constitute] . . . a legitimate business . . . [then a respondent’s]  acquisition of domain names consisting of common, dictionary terms for resale can confer rights and legitimate interests upon entrepreneurs who engage in this activity.” Platterz Inc. v. Andrew Melcher, FA 1729887 (Forum June 19, 2017). The more difficult issue and more difficult to assess is the tendency of some panelists in the guise of “objectivity” overstepping their roles by improperly ruling on issues that properly belong in a court of competent jurisdiction.

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