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The Obverse of Cybersquatting

	The Obverse of Cybersquatting Posted: Oct 28 2003 Steven H Bazerman and Richard Lee Georget, Bazerman & Drangel PC, New York Domain name dispute resolution forums such as those governed by the Uniform Domain Name Dispute Resolution Policy (UDRP) have become popular among trademark owners as a cheap and simple alternative to litigation to enforce rights against cybersquatters. Yet these forums' efficiency is threatened by, among other things, the developing phenomenon of reverse domain name hijacking, where the registrant maintains that the complainant claims rights in a domain name in bad faith. The UDRP rules In a judicial action, trademark infringement can be found even if the other party adopted the mark in good faith. Under the UDRP, the mere fact that a person registered a domain name that infringes the trademark rights of another party by itself is not enough to allow the trademark owner to obtain the transfer of the domain name. The UDRP procedure requires the complainant to prove that: the domain name is identical or confusingly similar to a mark in which the complainant has rights; the respondent has no rights or legitimate interest in the domain name; and the domain name was registered and is being used in bad faith. Recognizing that this simple procedure is bound to be abused, the drafters included provisions against complainants who attempt to claim rights in domain names in bad faith. Rule 1 of the UDRP defines such behaviour ("using the [UDRP] in bad faith to attempt to deprive a registered domain name holder of a domain name") as reverse domain name hijacking. Rule 15(e) further provides: "If after considering the submissions the panel finds that the complaint was brought in bad faith, for example in an attempt at reverse domain name hijacking or was brought primarily to harass the domain name holder, the panel shall declare in the decision that the complaint was brought in bad faith and constitutes an abuse of the administrative proceeding." This open-ended definition has enabled panels to develop their own grounds for finding reverse domain name hijacking. The common grounds are that (i) the finding of reverse domain name hijacking must be requested by the domain name holder(1), and (ii) the burden of proof is on the respondent to show that the complainant brought the claim in bad faith. As for the exact circumstances, four scenarios have emerged. Complainant's lack of right If the respondent can prove that the complainant does not have any rights in the mark used in the disputed domain name, it will obtain the complaint's dismissal. Such was the case in Picoliter Inc v Sauter: Picoliter began using the word 'Picoliter' as a mark and filed for registration only after Andrew Sauter had registered the domain name 'picoliter.com'. The panel concluded that Picoliter had no rights in the mark and dismissed the complaint accordingly. The respondent's bad faith was less obvious in Travel.biz International Pty Ltd v Blacker Media. Nevertheless, the panel concluded that Travel.biz did not have any rights in the disputed domain name 'travel.biz'. The panel reasoned that incorporating a generic term ('travel') as a business name and adding '.biz' to it did not confer rights in the corresponding domain name. Another example of a complainant's lack of rights is found in Von Eric Lerner Kalaydijan v Steinle. The panel ruled that Von Eric had attempted reverse hijacking on the domain name 'sex.shop.new.net' even though its trademark registration of several variations of SEXSHOP pre-dated the registration of the domain name. The panel questioned the validity of both the registration and use of the marks, and concluded that they had been registered with the simple object of obstructing subsequent third-party registration. Public persons have also been found guilty of reverse domain name hijacking. In Her Majesty The Queen, in right of her Government in New Zealand v Virtual Countries Inc, the panel rejected the New Zealand government's claims on the domain name 'newzealand.com'. The panel reasoned that (i) country names are not protected under the UDRP, and (ii) the New Zealand government did not own any trademark registration in the name - even though it had applied for registration. The panel concluded that the New Zealand government had no rights in 'New Zealand' and, therefore, the claim had been brought in bad faith (see 'New Zealand.com Case' may deter governments seeking '.com' domains). Respondent's right Reverse domain name hijacking may also be found if the respondent can prove that the complainant initiated the UDRP proceeding despite being aware that the domain name holder had a right or legitimate interest in the domain name. For instance, in Gordano Limited v NT mail server, the panel found that Gordano, having known of, condoned and encouraged the use of the domain name 'ntmailserver.com' by NT mail server for more than three years, could not then allege that NT had no legitimate right or interest in the domain name. Another example is Curb King Boderline Edging Inc v Edgetec International Pty Ltd, where the panel noted that Curb King was clearly aware that, as a licensee, Edgetec had rights in the mark CURB KING and, therefore, in the domain name 'curbking.com'. Respondent's lack of bad faith Knowing that the domain name holder did not act in bad faith is also grounds for finding reverse domain name hijacking. For example, in Commerce LLC v Hatcher, the panel noted that: Commerce did not make a single assertion of bad faith on the part of Charles M Hatcher; it did not allege that any of the bad-faith factors in Paragraph 4(b) of the UDRP were met; and it did not claim the existence of any other circumstances or produce any evidence that would suggest that Hatcher registered the domain name 'goodtidings.com' in bad faith. The panel could only conclude that the complaint was brought in bad faith. In China Arche Group v Kenji, the complainant contended that proof of Okmura Kenji's bad faith in registering the domain name 'arche.com' was that it had requested to be paid to transfer the domain name. Yet the panel found that China Arche was the party driving the transfer negotiations. Therefore, it ruled that China Arche had attempted reverse domain name hijacking and dismissed the claim accordingly. Similarly, in Sustainable Forestry Management Limited v SFM.com, the panel found reverse domain name hijacking because the domain name 'sfm.com' was registered (i) before the complainant was incorporated, and (ii) before it used the mark for the first time. Complainant's lack of candour Both underlying the previous grounds and forming an independent ground is lack of candour on the part of the complainant. Many of the cases discussed above had one or more statements or omissions in the complaint that was tantamount to a lack of candour. In Rodale Inc v Cambridge, the panel made a finding of reverse domain name hijacking because of Rodale's conspicuous failure to mention two material facts relating to the marks on which it based its claim. Firstly, that when it registered the mark RODALE'S SCUBA DIVING in the United States, it disclaimed any exclusive right in the phrase 'scuba diving' when not in relation to the word 'Rodale's'. Secondly, that the mark SCUBADIVING.COM was registered on the US Patent and Trademark Office's supplemental registry, that is, the registry for descriptive marks for which secondary meaning has not been proven. Similarly, the panel in NTT DoCoMo Inc v ATT Wireless Inc, which involved the domain name 'imode.biz', found reverse domain name hijacking because NTT failed to disclose that ATT had rights in the IMODE mark pursuant to a licensing agreement with NTT. Conclusion Reverse domain name hijacking claims have added a duty of candour to the UDRP not otherwise present in advocacy systems such as the US system. Any complaint under the UDRP should be complete, laying out all facts, whether or not they are positive for the complainant, in order for the complainant to avoid facing the charge of reverse domain name hijacking. The rise in claims of reverse domain name hijacking also emphasizes the difference between remedies for cybersquatting under the UDRP and that of traditional trademark actions. Whereas the UDRP is a good remedy if the facts are simple and all the elements are clearly present, it is not the forum for complex trademark issues, equivocal facts or where trademark infringement occurred in good faith. One should carefully evaluate the case before going the UDRP route. Not every clear case of trademark infringement is actionable under the UDRP. Bringing the wrong infringement case to this forum may lead to a finding of reverse domain name hijacking even in the face of actionable trademark infringement. If the complainant then goes to the courts, it will already be negatively branded. Endnote (1) However, the '.biz' registry has developed the Start-up Trademark Opposition Policy (STOP) Rules to supplement the UDRP. Rule 15(d) of STOP imposes a duty on the panel to find and state whether the complaint was brought in an attempt at reverse domain hijacking regardless of whether it was requested by the domain name holder. This article first appeared on World eBusiness Law Report on April 10, 2003 Go Top