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What Does it Take for Complainant to Lose a UDRP Dispute?

Proof in a UDRP dispute is a step by step process; complainant builds its case in a logical progression: this is who I am (my trademark has priority in the market, where priority is measured from the date of domain name registration; or, as in some recent cases, from renewal of registration); this is who the other guy is (he has registered a domain name identical or confusingly similar to my mark for which he has neither rights nor legitimate interests), and on top of this the other guy registered the domain name and is using it to take advantage of my reputation.

Even if complainant has a trademark and respondent lacks rights or legitimate interests in the domain name, if there’s no bad faith there’s no actionable claim. If each of these steps is confirmed by the evidence, this is the paradigm for prevailing in a UDRP dispute.

The paradigm for losing a UDRP is a failure to understand the logic behind the process. So, for example, it is not good enough to allege a trademark right that cannot be proved; or, worse, expose oneself for making perjurious statements. Neither is it good enough to simply allege that respondent registered the domain name and is not using it; or offering to sell it for more dollars than complainant is willing to pay. None of these allegations are predicates for bad faith. It is not unlawful to register alphanumeric strings of characters that by happenstance are identical or confusingly similar to trademarks.

While there may be some excuse for parties appearing without counsel who have no experience with the UDRP and fail to understand their evidentiary burden there is none for attorneys either ignorant of domain name law as it has been practiced for the past 16 years or subvert the process by falsifying the facts in ways described in LeBoeuf Corporation v. DOMAIN ADMIN, FA1601001655243 (Forum February 11, 2016) (represented by counsel). In this case Complainant had no trademark right; failed to make a prima facie showing that Respondent lacked rights or legitimate interests in the domain name; and offered no evidence of bad faith, either registration or use.

It’s informative to follow the Panel’s assessment of each of the requirements as a lesson of avoidance in the losing paradigm.

For the first requirement: Complainant alleged through its counsel that it had common law rights in the LEBOEUF mark dating back to 2002. Respondent registered in 2010. If Complainant’s allegation were true it would have priority of use, but Respondent (appearing without counsel) showed that Complainant’s “Corporate Profile from the Missouri Secretary of State website is inaccurate and misleading.” Complainant had no “beef” at its inception. It began its corporate life as “‘Global Solutions International, Inc.’ in 2002, rebranded to ‘Cynergy Consulting, Inc.’ in 2009, and rebranded again on September 1, 2015 to ‘LeBoeuf Corporation.’” Not just misleading, but false (from an attorney!) No good comes from undermining the integrity of the process. This was sufficient evidence to rebut the claim of rights dating back to 2002.

For the second requirement, in order to make a prima facie case Complainant has to show, at the very least, a foundation either supportive of or sufficient from which appropriate inferences can be drawn; failing that, Respondent has no reason to respond other than to state the basic facts:

Respondent argues that the term of the <> domain name, “le boeuf” is common and generic, because it is French for “the beef” or “the ox,” and therefore, Complainant does not have an exclusive monopoly on the term on the Internet. Respondent has provided evidence of this generic nature through the use of Google searches, as well as other uses of the term in association with beef on the Internet. The Panel therefore finds that Respondent can establish rights or legitimate interests in the disputed domain name pursuant to Policy ¶ 4(a)(ii).

For the third requirement, Complainant has to establish (not merely allege) infringing registration and use of the domain name. Indicators of bad faith registration are set forth in subparagraphs (i), (ii), and (iii) of paragraph 4(b). Indicators of bad faith use as a basis for determining bad faith registration is set forth in subparagraph (iv), that is bad faith use informs the assessment of abusive registration.  A registration offends subparagraph 4(b)(i) and is at once conjunctive bad faith if the registrant offers to sell the domain name for a price that exceeds the out of pocket costs for acquiring it, with a caveat that if the domain name was acquired lawfully 4(b)(i) does not apply. In this case the domain name was acquired lawfully because Complainant had no trademark at the time (or even now) for the generic string of characters.

In LeBoeuf Corporation Respondent counter-offered to sell the domain for the heady price of $500,000.00 in response to an offer of $2,000 but it is not unlawful to sell an asset for whatever price a willing purchaser is ready to pay. The subparagraph cannot be invoked absent proof that the domain name was acquired for the “primary” purpose of “selling . . . or otherwise transferring the domain name registration to the complainant who is the owner of the trademark . . . or to a competitor of that complainant.” Generally, where a domain name does not resolve to an active website and is a dictionary word that can be used without association with the trademark or its owner it can’t be said that its use violates third-party rights.

The final issue is whether Complainant has abused the UDRP proceedings and engaged in reverse domain name hijacking. There are five controlling facts in LeBoeuf Corporation that taken together can be held up as the paradigm: 1) complainant has no trademark rights; 2) but even if its rebranding were taken into account, respondent has priority of use; 3) respondent has rights or legitimate interests in a domain name consisting of a generic term or descriptive phrase; 4) complainant has failed to show that respondent lacks rights or legitimate interests in the domain name; 5) complainant has failed to prove abusive registration; and 6) Complainant’s counsel has certified a complaint that contains false statements and submitted a perjurious declaration. These as predicate,

[t]he Panel finds that Complainant knew or should have known that it was unable to prove that Respondent lacks rights or legitimate interests in the <> domain name and that Respondent registered and is using the disputed domain name in bad faith. The Panel therefore finds there is sufficient evidence to determine that Complainant has acted in bad faith and that reverse domain name hijacking has occurred.

The sanction does not apply where there is a disputed issue of fact relating to the timing of respective rights or equivocal use but where a complainant “kn[ows] or should have known that it [would be] unable to prove” its case the complaint should never have been filed. See also China Ready and Accredited Pty Ltd v. Warren Weitzman, Caramba LLC, D2015-2164 (WIPO February 11, 2016) (“[T]he Panel considers that the Complainant could never have prevailed and that it is unlikely that this obvious deficiency in its case could have been overlooked by the Complainant, who is represented by counsel.”) In LeBoeuf Corporation, the attorney’s false certification and the client’s perjury are not just unacceptable they undermine the integrity of the proceeding.

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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