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UDRP is Niche Forum for Cybersquatting, Not Trademark Infringement

The UDRP is not a general court for trademark infringement, but a niche forum for a particular kind of infringement. It authorizes Panels to determine whether domain names incorporating a complainants’ trademarks violate the terms of s respondent’s warranty, i.e. that it “will not infringe upon or otherwise violate the rights of any third-party.” The Internet Corporation for Names and Numbers (ICANN) requires all registrars to incorporate this boiler-plate warranty in their registration agreements; it is also included in the Policy at Paragraph 2.

The distinction between violation of a third-party’s trademark rights and trademark infringement is subtle and not always clear, but it is important to understand the outer limits of the UDRP. Claims of trademark infringement as opposed to cybersquatting are outside the scope of the Policy. The point is made particularly clearly in Alliance Healthcare Services Inc. v. [Name redacted] / Whois Agent, Whoisprivacy Protection Service Inc., D2015-1666 (WIPO November 20, 2015):

when a decision by a UDRP panel requires determination of a central issue in pending or likely court proceedings, or when the panel must weigh in on an issue of law or fact better decided by another tribunal [Complainant’s remedy lies in a court of competent jurisdiction]. Given the gravity of the Complainant’s charges this proceeding falls within the latter two of these examples.

UDRP authorizes Panels to determine whether domain names incorporating complainants’ trademarks violate the terms of respondents’ registrations; that is a different species of case from whether the registration and use of an accused domain name is a trademark infringement.

An allegation such as complainant has not licensed a respondent to use its trademark “does not negate a legitimate rights determination.” GoDigital Records, LLC v. Asher Winata, FA1509001638836 (Forum November 23, 2015). Where the issue is framed around infringement of trademark as opposed to infringement of a right to exclusive use of a term on the Internet the matter “can [only] potentially be resolved in federal court” the complaint must be denied.

Part of the confusion rests on the use of the term “confusingly similar” (Paragraph 4(a)(i)). In the UDRP the term is limited to a side-by-side comparison of the domain name and mark, whereas under the Lanham Act the term refers to the marketing and use factors usually considered in traditional infringement actions. Some light on the distinction is shed in two cases by the same panelist, Sunovion Pharmaceuticals Inc. v. ProCommerce, LLC, D2012-0232 (WIPO March 28, 2012) and Sunovion Pharmaceuticals Inc. v. Gadd Formulas, LLC, D2012-0234 (WIPO March 28, 2012). Respondents did not appear in either case.

While the Respondents in the two cases are different, the Complainant alleges that both are controlled by a third party who it is currently suing in the United States District Court for the District of Massachusetts. In that case Complainant asserts claims of trademark infringement, unfair competition, and trademark dilution under United States federal law and Massachusetts state law. It alleges that the defendant Health Science Nutrition Inc. “owns and/or operates websites” at which Lunexor is sold, including the disputed domain names in the proceedings,(ProCommerce) and(Gadd). Complainant owns the trademark, LUNESTA, which is also the name of a prescription sleep drug.

Only the first four letters in the domain name—“lune”— are identical to the trademark. The domain names are respectively <> and <>. The question is whether the aural similarity (which is “not obvious” although the Panel found confusing similarity) has any meaning under trademark law:

The Panel does believe that Complainant has demonstrated aural similarity, however, based upon the apparent phonetic pronunciations – “lu-NES-ta” and “lu-NEX-or”. For purposes of the Policy – and for reasons set out below the Panel expressly disclaims any opinion on whether the aural similarity has significance under United States trademark law.

The Complainant itself points to the problem in these cases. Respondent actually sells a product by the name “Lunexor,” which is identical to the dominant feature of the disputed domain name. This would appear to support Respondent’s right or legitimate interest in the domain name. However,

Complainant seeks to avoid this conclusion on one basis only: that Respondent’s choice (or Respondent’s principal’s choice, as alleged in the Massachusetts lawsuit) was done solely to sell a product that infringes Complainant’s mark under national (U.S. federal or Massachusetts state) law, i.e., that Respondent is selling an “infringing product”.

The implication is that the similarity between the domain name and trademark is not mere coincidence because the Respondents’ product is infringing. But, as presented the “infringement” is outside the scope of the Policy. “At this point all the Panel has to rely upon are Complainant’s allegations in this proceeding and in the Massachusetts lawsuit,” which are not sufficient to make a ruling on the domain names:

For reasons that should be obvious to those familiar with the UDRP process, this proceeding is not the place – and certainly should not be the first place – for a declaration that a particular product infringes (or not) another party’s trademark…. An action for infringement (or contesting a trademark application in the USPTO … involves different legal standards and calls for a broader record, with factual and expert evidence on many topics of marginal (if that) relevance to the Policy standards.

In a UDRP proceeding, even if the evidence is persuasive of product infringement, complainant would “not automatically make out a claim for cybersquatting, and vice versa,” Sunovion. The same point is also emphasized in Alliance Helathcare, supra:

The summary of the Complainant’s grievance with the Respondent, whoever he (or she or it) may be, demonstrates beyond any doubt that complete resolution will require proceedings in a national court. That fact raises a question of whether the Panel should leave resolution of all issues, including those surrounding the disputed domain name, to the courts rather than opining on a small piece of a far larger puzzle. . . .  Nevertheless panels have on similar occasions declined to proceed to a decision on the merits when many of the same issues are likely to be decided in court, when one party seeks to use a UDRP proceeding to gain an advantage in court or to harass,

Arguably, there may be a thin line separating claims within and outside the jurisdiction of the UDRP but clams that a respondent’s conduct is infringing in a trademark sense, not merely that it has registered a confusingly similar domain name to the trademark, the Panel is being asked to assess something more than cybersquatting, and that is outside its jurisdiction.

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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