Month: May 2014

This week’s World Intellectual Property Organization decision involves the domain names pronature.ch and 1stchoice.ch.  Even though the Complainant and Respondent had an underlying agreement regarding the use of the domain names, only one of the two was transferred to the Complainant.

The documents submitted by the Complainant, PLB International Inc., included a distribution agreement between the Complainant and Respondent, Bürobedarf Lack AG / Pet Partner GmbH, Peter Wyser, which included language regarding the use of domain names. Specifically, “The Claimant granted the Respondent, as distributor for the Claimant’s products in Switzerland, the right to register the disputed domain names, in the name and on behalf of the Claimant, for the purpose of promoting, distributing and commercializing the products identified with the Claimant’s trademarks. The Respondent expressly recognized in the distribution contract that the Claimant remains the sole owner of the disputed domain names.”

Some of the documents had to be translated from German to English, and others from French to English, based on the assumption that the Respondent understands English. The Respondent appears to be based in Switzerland and did not respond to the Complaint. While the Panelist ordered that pronature.ch be transferred to the Complainant, based upon the Complainant’s trademark for Pronature in Switzerland, the Complainant failed to win the second domain name back because the trademark “1stChoice” was not registered in Switzerland. According to the panelist, “While the Claimant has proven trademark protection in Switzerland for the mark PRONATURE, this does not appear to be the case for the trademark 1ST CHOICE (section 4 above). Switzerland is not a member of the European Community and does not appear in the list of the countries in which the Claimant has trademark rights.”

Of note to parties entering into a distribution agreement involving domain name use is the Panelist’s remark that “In accordance with other expert decisions, mere contractual rights (as those asserted here under the distribution agreement) are not sufficient to this Panel to satisfy the requirements of paragraph 24(c) of the Rules of Procedure ( WIPO Case No. DCH2007-0002, Travel Professionals Association, en abrégé TPA vs. Denis Lambelet).”

In other words, when it comes to domain names, trademarks are the safest way to secure your company’s name – don’t rely on a distribution agreement alone.

While in Hong Kong last week for the International Trademark Association’s 136^th meeting, I attended a training session for National Arbitration Forum (NAF) domain dispute panelists.  Some of the best and brightest panelists joined in an open discussion of both procedural and substantive issues which they feel are important to or evolving in such disputes. In a nutshell, here are my take-aways from this session:

Laches

The number of decisions that reference laches – a defense tactic citing delay by the brand owner in bringing the dispute – is on the rise.  Some of the panelists at the NAF meeting adhere to the traditional view that laches does not apply in UDRP cases, since the relief sought is only equitable and not related to damages. Others believe that, while laches should not be a controlling issue, it may be taken into account as part of the overall picture, when a very long delay supports the argument that the respondent is not using the domain in bad faith. In other words, use of the site is not “disrupting the business of” the complainant because, if it were, the dispute would have been brought much sooner.

Bad Faith Renewal

The panelists at the NAF session unanimously agreed that the theory of “bad faith renewal” of a domain is not properly within the scope of the UDRP.The big5.com decision (which I covered in a previous blog) opened the door for a complainant to win a UDRP case even though its trademark rights post-dated the acquisition of the domain by the respondent. This is based on the idea that Para. 2 of the UDRP says that a domain owner must agree that its domain doesn’t infringe on anyone’s trademark rights both when it registers the domain and each time it renews it. The panelists felt that Para. 2 is merely a term for the registrar to impose on its registrant customers and does not provide an independent ground for brand owners to assert against a domain owner.  This follows criticism of the big5.com case by others in the industry.

New gTLDs Create Anticipation

Some of the panelists at the session have already issued UDRP or URS decisions affecting new gTLDs. The most common issue in these cases is the lack of content on the websites in question since the domains haven’t been registered for very long and it’s sometimes a challenge to determine if they have truly been registered and used in bad faith. However, it was unanimously expected that cybersquatting in the new gTLD space will increase and that panelists will, as a result, see more and more of these cases.

Biggest Challenge? Lack of Preparation

Finally, on the procedural side, the panelists agreed that their biggest problem is unprepared parties and their counsel.  Panelists waste quite a lot of time issuing procedural orders in an attempt to help parties fix obvious mistakes in their complaint or exhibits and find it frustrating that even these efforts are sometimes met with continued failures by both complainants and respondents.

As I’ve advised again and again, some of the best and brightest NAF panelists agree that having experienced and expert UDRP counsel is the most effective way for parties to fully express their claims and defenses and to have the best chance of winning their cases.

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Want to learn more? Register today for the next UDRP Team webinar on June 19 or email your questions to UDRPTeam@fairwindspartners.com.

During a recent presentation, I mentioned that the UDRP and its rule-sets is a complex area – an area that is often underestimated by even experienced and expert trademark litigation counsel.  The recent qualify.com case provides a good example, since the facts of this case – and how the Policy was applied to them – are anything but straightforward.

It’s a basic UDRP requirement that a complainant must show that it owned trademark rights before the respondent acquired the domain.  If no trademark existed when the domain was acquired, the argument goes, the respondent couldn’t have acted in bad faith when it acquired the domain.  But sometimes the respondent isn’t the domain’s original owner.  If the respondent acquired it, by transfer, after the original creation date of the domain, in most cases the acquisition date will control, and the creation date becomes irrelevant.

Here, the Complainant owned its QWALIFY trademark since 2010. The Respondent claims that he registered the disputed domain name in 1999 and that he had never heard of the Complainant prior to receiving the Complaint.  The Complainant points out that the domain had been transferred twice, once in 2012 and again in 2014, after the Complaint was filed. It argues that these transfers are considered new acquisitions for purposes of this dispute.  Countering this point, the Respondent claims that the transfers were between companies that he, himself, owns and that, for all practical purposes, control of the domain has always been his.

Despite the fact that the Whois record of the domain has been hidden by a privacy service for a good part of its life, the Panel noted, from the historic WhoIs record, that the same registrant email address was used on the WhoIs record from 2004 and is used on the current WhoIs record thus indicating that it’s been under the same ownership despite the actual registrant name having changed, and different privacy services having been used over the course of these transfers.  This is an exception to the above rule that the date of a domain transfer is the critical time for purposes of deciding a UDRP case. Despite a transfer, if the seller and buyer are related entities or the domain otherwise remains under effective control of the same party, then the date of the transfer can be disregarded.

Next the Complainant claims that, each time the domain was renewed, it started the clock ticking again, for purposes of finding bad faith, since Section 2 of the UDRP requires a domain owner to represent, when either registering or renewing its domain, that the domain doesn’t infringe on anyone else’s rights.  In a blog post last year I reported that this novel approach to UDRP complaints was applied in the big5.com case. However, it has since been questioned and disfavored by the UDRP community.

Regardless, in the present case the Panelist found that although the qualify.com domain resolved to a pay-per-click website, and despite the fact that most of the links on that site bore no relation to the generic meaning of the word “qualify,” the links also bore no relation to the Complainant’s QWALIFY trademark.  Had the Panel found, for example, that the disputed domain name had been registered in good faith but that subsequent use thereof was in bad faith, it may have been necessary for the Panel to at least consider this Section 2 argument. However, this was not the case for qualify.com since the website content didn’t infringe on the Complainant’s trademark.

Finally, the Panelist declined to find reverse domain hijacking by the Complainant since it was not trying to defraud the UDRP process or steal the domain away from the Respondent. Rather, the Complainant was confronted by a registrant who is not only a seasoned domainer but who has also been the subject of a series of findings of registration and use in bad faith under the Policy. Among the cases brought against the Respondent, the Complainant carefully noted the circumstances of one involving the domain bme.com in which a three member panel determined that the Respondent’s transfer of a domain name between privacy services was actually capable of changing the date on which bad faith was to be assessed. The present case involved a similar transfer, but its facts are sufficiently different from those in the bme.com case that the present complaint failed.

As I noted above, this case highlights the complexity of some UDRP cases and the need to both extensively research the facts of a domain and be aware of developments in UDRP jurisprudence before filing a complaint. Although experienced trademark litigators may be very good at what they do and may be up on the latest court cases involving trademark infringement, the UDRP is a unique animal and brand owners should carefully consider retaining counsel who are up on the latest developments in this highly specialized and evolving area.

After considerable exposure to the world of UDRP complaints during my time at FairWinds, I have seen the issue of laches arise time and again. Such was the case in a recent UDRP complaint I came across, in which Novartis AG attempted to recover the domain name clearcare.com. Unfortunately, the Complainant was unsuccessful in its attempt and the National Arbitration Forum (NAF) three-member Panel decided that the domain name should remain with the Respondent, Name Administration Inc.

Here are some of the key facts: The Complainant owns a trademark registration for the CLEAR CARE mark and uses it in the sale of a contact lens cleaning product. On the other hand, the Respondent is a well-known domain investor who picks up expired domain names and then resolves them to PPC pages with links related to the generic terms they may contain. The clearcare.com domain name was acquired by the Respondent in 2005 and resolves to a PPC site with links relating to the word “care”, but none of them specifically relate to eyes or contact lenses.

This was an important detail that helped save the Respondent from losing the domain name. As the Panel notes concerning legitimate interest: “Respondent’s use of the <clearcare.com> domain name is a protectable … bona fide offering of goods, namely an offering of non-competitive related goods vis-à-vis hyperlink advertisements”. On the topic of bad faith, the Panel stated: “the Panel finds that Respondent’s use of the domain name for purposes of an unrelated hyperlink directory cannot rightfully constitute … bad faith”.

However, the most damning factor against Complainant was the laches (delay) defense raised by the Respondent. On that subject the Panel had this to say: “It appears to the Panel that any business disruption or confusion suffered by Complainant as a result of Respondent’s domain name registration was either non-existent or de minimis, else Complainant would have taken action in a more timely fashion.” While the generic nature of the hyperlinks on the website certainly were a factor here, it seems that the coup de grâce was that this Panel just couldn’t ignore the Complainant’s delay in filing its complaint to recover the domain name. At this point the Complainant can either take the matter to court (possibly in the British Virgin Islands?) or just pay a princely sum to buy the domain from the Respondent.

Either way, the clear message to brand owners is to prioritize your enforcement targets and then pursue the most important ones without delay.