Anchovy News, June 2021

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This is the June edition of Anchovy News. Here you will find articles concerning ICANN, the domain name industry and the recuperation of domain names across the globe. In this issue we cover:

DOMAIN NAME INDUSTRY NEWS

  • Sun sets on Sunrise B as AdultBlock rises to the occasion
  • Q1 domain name round-up

DOMAIN NAME RECUPERATION NEWS

  • Free speech and the UDRP
  • Caution required for less fanciful trademarks
  • Reboxed "Plan-B" complaint fails to deliver

Newsletter sections:

  • Domain name industry news
  • Domain name recuperation news

For earlier Anchovy News publications, please visit our Domain Names practice page. Learn more about Anchovy® - Global Domain Name and Internet Governance here.

Domain name industry news

Sun sets on Sunrise B as AdultBlock rises to the occasion

Sunrise B, the programme that originally enabled trademark holders to block their brands for a period of 10 years in the adult-themed .XXX Top Level Domain (TLD) when it launched back in 2011, is set to come to an end on 1 December 2021. In its place, MMX, which runs the .XXX Registry, is introducing two levels of protection that will cover not just the .XXX TLD, but also its other adult-focussed TLDs .SEX, .ADULT, and .PORN.

The .XXX TLD was launched back in 2011 as one of a handful of “sTLDs” (sponsored Top Level Domains) that counted among its ranks .ASIA, .JOBS, .TEL and .TRAVEL, and which preceded ICANN’s new gTLD programme. The first adult-themed TLD to ever be launched, .XXX, was sponsored by the International Foundation for Online Responsibility (IFFOR), a “not-for-profit organization that specializes in developing policies and educational materials around online sexual content”, ostensibly with the aim of providing a focal point for sexually explicit material on the Internet within a specialised TLD, where it could easily be blocked or restricted.

In order to assuage the concerns of trademark holders when faced with a TLD specialised in adult content, the ICM Registry, which ran the Registry at the time, implemented the Sunrise B blocking programme in order to allow brand owners to protect their trademarks as non-resolving, reserved domain names for a period of ten years. Since its launch, around 70,000 trademarks have been blocked under the Sunrise B programme.

MMX’s new blocking service is divided into two service levels – AdultBlock and Adultblock+. Both the AdultBlock and AdultBlock+ will block all available domain names across the four adult-themed TLDs it covers and will automatically block any additional dropped names while the block is in place without the need for any action on behalf of the block holder.

The AdultBlock+ service also enables rights holders to block all look-alike variations such as typos, homoglyphs and IDNs (it covers over 20 languages and scripts including Chinese (Simplified & Traditional), French, German, Italian, Korean, Portuguese and Russian). The service not only blocks characters available today but will also include any language character sets that become available in the future for the specific TLD.

In terms of eligibility, .XXX Sunrise B holders will be able to block their brands in the new AdultBlock service, as will trademark holders with a Signed Mark Data (SMD) file from the Trademark Clearing House (TMCH).

Additionally, the Registry has recently opened up the AdultBlock service to unregistered rights holders as well as to celebrities and politicians. When .XXX originally launched, thousands of celebrity names, as well as the names of the world’s capital cities and culturally sensitive strings put forward by a handful of governments were blocked by ICM Registry free of charge. However, under the new service, celebrities and politicians will now have to provide evidence to prove their fame and buy their AdultBlocks along with everyone else.

The AdultBlock service allows for 1, 3, 5 and 10 year registration periods with a maximum registration period of 10 years.

In common with the original Sunrise B Blocks, the WHOIS data for the AdultBlock and AdultBlock+ service will simply state that the blocked domains are protected with no other information provided.

Brand owners will need to weigh up the costs and benefits of blocking their brands across the four TLDs, taking into account, on the one hand, the extensive protection that the AdultBlock service offers across four separate adult-themed TLDs, against the fact that there have actually been relatively few UDRP cases in the .XXX TLD since 2012.

Should you require any assistance with reserving your brands in the AdultBlock or AdultBlock+ service, or converting Sunrise B blocks to AdultBlocks, , please contact David Taylor or Jane Seager

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Q1 domain name round-up

Verisign’s Domain Name Industry Brief for the first quarter of 2021 has shown a decrease of 0.8% in domain name registration numbers across all Top Level Domains (TLDs) when compared with the fourth quarter of 2020.

The Brief reveals that there were 363.5 million domain name registrations across all Top Level Domains at the end of March, which is down by 2.8 million names when compared with the end of 2020.

The decrease highlighted in the Brief seems, at first glance, to buck the trend observed in a number of ccTLDs, such as Germany, the Czech Republic, Greece and The Netherlands, which experienced increases as high as 20% over the past year, as was reported by Belgium in its 2020 Annual Report.

However, it appears that the dip is partially attributable to a decrease in Chinese domain name registrations, which were down four million to 20.7 million for the quarter, along with decreases in certain other gTLDs also popular with Chinese registrants, such as .ICU, .WANG and .TOP. The .ICU TLD alone lost over 2.6 million domain names in the first quarter of 2021.

The total number of new gTLDs was down 12.3 percent in the first quarter of 2021, with a 29.3 percent drop recorded in 2020. This decrease could be explained by the expiry of the first-year discounted registration prices offered by a number of registrars and Registries and designed to attract customers to these new gTLDs.

However, it is not all gloom as the Brief once again reported strong growth for the .COM TLD, which was up from 151.8 million reported in the Q4 Brief to 154.6 million. Additionally, the number of new .COM and .NET domain name registrations totalled 11.6 million at the end of the first quarter.

The Brief notes that, as of 31 March 2021, the largest TLDs by number of reported domain names were .COM, .TK (Tokelau), .CN (China), .DE (Germany), .NET, .UK (United Kingdom), .ORG, .NL (the Netherlands), .RU (Russia) and .BR (Brazil).

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Domain name recuperation news

Free speech and the UDRP

In a recent decision under the Uniform Domain Name Dispute Resolution Policy (the UDRP or the Policy) before the World Intellectual Property Organization (WIPO), a Panel refused to order the transfer of a Domain Name on the basis that the Complainant had failed to demonstrate that the Respondent lacked rights or legitimate interests in the Domain Name due to its clear connection with legitimate criticism.

The Complainant was Coupang Corporation, an large online retail shopping company based in the Republic of Korea founded in 2010. It held trademarks for "COUPANG" in the Republic of Korea and in the United States. According to the Complainant, its online marketplace was a global leader proposing a wide variety of consumer, business and industrial products.

The Respondent was a Korean individual. No further information was provided. The Respondent did not reply.

The disputed Domain Name, anticoupang.com, was registered on 15 February 2021 and resolved to be a website that appeared to be critical of the Complainant.

The Complainant initiated proceedings under the UDRP for a transfer of ownership of the Domain Name.

To be successful in a complaint under the UDRP, a complainant must satisfy the following three requirements under paragraph 4(a):

(i) the domain name registered by the respondent is identical or confusingly similar to a trademark or service mark in which the complainant has rights; and

(ii) the respondent has no rights or legitimate interests in respect of the domain name; and

(iii) the domain name has been registered and is being used in bad faith.

Under the first requirement, the Panel recognised that the disputed Domain Name was similar to the Complainant’s COUPANG trademarks. The mere addition of a term such as “anti” would not preclude a finding of confusing similarity under the first requirement, especially where the domain name incorporated the Complainant’s trademarks. Therefore, the Panel found that the Complainant satisfied paragraph 4(a)(i) of the UDRP.

Under the second requirement, the Complainant argued that the Respondent’s criticisms were neither genuine nor non-commercial. However, the Panel found that the Complainant had failed to establish that the Respondent had no rights or legitimate interests in respect of the disputed Domain Name.

In the Panel’s opinion, Internet users could not be misled as to the source of the disputed Domain Name as it did not consist purely of the Complainant's trademark, or even the Complainant's trademark plus a descriptive term. The derogatory term “anti” demonstrated a clear position against the Complainant and prevented any finding of impersonation of the Complainant, even though the Respondent was displaying the Complainant’s logo on its website.

The Panel found that there was no evidence that the website was commercial in nature. The Complainant asserted that the Respondent’s website allowed Internet users to add subscribers to YouTube channels on its website and thus helped to monetize those YouTube channels. However, having reviewed the content of the Respondent’s website, the Panel noted that the Respondent’s website merely referred to many TV news video clips drawn from Korean news media and other YouTube commentators to bolster the Respondent’s criticism. There was no evidence that the Respondent itself had derived any commercial advantage from the website at the disputed Domain Name. Based on the above, the Panel found that the Respondent's criticism site amounted to “legitimate non-commercial or fair use of the domain name, without intent for commercial gain to misleadingly divert consumers or to tarnish the trademark” in accordance with paragraph 4(c)(iii) of the Policy.

The Panel held that this was enough to rebut the Complainant’s claim that the Respondent had no rights or legitimate interests, and the Complainant had therefore failed to satisfy paragraph 4(a)(ii) of the UDRP. In the light of this the Panel found that the third requirement of the Policy did not need to be addressed and the Complaint was denied.

This decision underlines that trademark owners should carefully consider whether a UDRP complaint is an appropriate tool when faced with genuine criticism websites where the domain name at issue also clearly eliminates any risk of confusion (domain names that exactly match a complainant’s trademark with no adornment are far more problematic, however they are being used). In such circumstances, litigation in a national court may potentially be more appropriate as this will allow the issues to be examined far more thoroughly. This decision also demonstrates that, even in cases where respondents do not respond, UDRP panels will nevertheless diligently review all the facts and circumstances in order to come to the right decision.

The full decision is available here.

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Caution required for less fanciful trademarks

In a recent decision under the Uniform Domain Name Dispute Resolution Policy (UDRP) before the World Intellectual Property Organization (WIPO), a Panel denied the transfer of a domain name because the complainant had failed to demonstrate that the respondent was targeting the complainant's trademark, especially as the trademark at stake consisted of a dictionary term in various languages.

The Complainant was NUBE, S.L., Spain, a subsidiary of Universo Pacha, S.A. (“UP”), a Spanish company operating in leisure, hospitality and entertainment established since 1967. According to the Complainant, UP was “active in night clubs, hotels, restaurants, magazines, event organization, franchises, music production and clothing and accessories stores” having clubs in Spain, Germany, Brazil, China, Australia, and Poland and being “an institution of Europe’s nightlife and dance scene”. The Complainant owned the intellectual property rights of the UP companies and was thus the owner of several trademarks, including Spanish and United States trademarks in PACHA.

The Respondent was Weihao Pan, Pacha Incorporated, Taiwan Province of China, a holding company incorporated in the Virgin Islands, Overseas Territory of the United Kingdom (“Virgin Islands”) on 5 November 1998. Having its business address in Taipei, Taiwan Province of China, the Respondent operated as a shareholder of brokerage companies.

The disputed domain name was pachagroup.com (the Domain Name), registered on 29 September 2011. It did not appear to have been used in connection with an active website, but the Respondent stated that it had been using the Domain Name for email purposes.

To be successful in a complaint under the UDRP, a complainant must satisfy the following three requirements set out at paragraph 4(a):

(i) the domain name registered by the respondent is identical or confusingly similar to a trademark or service mark in which the complainant has rights; and

(ii) the respondent has no rights or legitimate interests in respect of the domain name; and

(iii) the domain name has been registered and is being used in bad faith.

With regard to the first requirement, the Panel found that the Complainant had established trademark rights in the term PACHA. It further ruled that the Complainant’s PACHA trademark was clearly recognizable in the Domain Name, being incorporated in its entirety in addition with the descriptive term “group” and therefore the Domain Name was confusingly similar to the Complainant's trademark. The first limb was thus satisfied.

Turning to the second requirement of the UDRP, and the respondent’s rights or legitimate interests (or lack of them), a complainant must prove that a respondent has no rights or legitimate interests in respect of the domain name in question. A complainant is normally required to make out a prima facie case and it is for the respondent to demonstrate otherwise. If the respondent fails to do so, then the complainant is deemed to satisfy paragraph 4(a)(ii) of the UDRP.

In the present case, the Respondent claimed that its main shareholder (“CP”) named Pacha Incorporated after the first initials of his family members Peter, Angela, Christina, Howard (PACH) and he added the letter “A” for “Associates.” The Respondent further stated that he registered the Domain Name “as a combination of its company name and word ‘group’ having in mind its role as a holding company, which together with the companies in which it holds equity makes a group of companies.” In support of its contention, the Respondent submitted a document listing its accounts with a variety of brokerage firms as an annex. As the Panel noted, the Respondent’s annex included several emails sent from the brokerage firms to various principals or employees of the Respondent between 2011 and 2021, using email addresses set up via the Domain Name (including, for instance, “[name]@pachagroup.com”).

The Complainant pointed out that the Respondent’s business address was in Taiwan, not the Virgin Islands. The Panel agreed with the Respondent’s argument that it was not improper to have a “mailbox” in the jurisdiction of one or more of its principals (including the manager of the firm). The Respondent further stressed that the personal names on its Virgin Islands Certificate of Incumbency also appeared in emails between various financial institutions and individuals employed by or owners of the Respondent. The Panel was therefore convinced that the Respondent was a legitimate holding company that had been legitimately using the Domain Name for its corporate email addresses.

In light of this, the Panel considered that, on the balance of probabilities, the Respondent had successfully rebutted the Complainant’s prima facie case, given that the Respondent was a Virgin Islands-registered company in good standing since 1998 and had provided an explanation regarding its corporate name and its motives for registering the Domain Name. Although the Panel found the Respondent’s explanation itself somewhat odd and uncorroborated, it was satisfied as to the Respondent’s bona fides as a business, as per the Respondent’s evidence.

Given this, the Panel considered that the Complainant had failed to establish that the Respondent had no rights and legitimate interests in the Domain Name.

Finally, in relation to the third requirement, a complainant is required to demonstrate that the domain name in question was both registered and used in bad faith.

In the case at hand, the Panel believed the Respondent’s contention that it was not aware of the Complainant or its PACHA trademark at the time it registered the Domain Name in 2011. Although there was some evidence in the record that the Complainant’s PACHA trademark enjoyed some renown in certain jurisdictions and in connection with certain goods and services, the Panel did not accept the Complainant’s argument that PACHA was a famous trademark such that a party denying knowledge of the mark ran the risk of being disbelieved. Furthermore, the Panel agreed with the Respondent that “Pacha” was a dictionary word in various languages or cultures and had been used by several other companies as a company name and/or a trademark in various jurisdictions and in various spheres of economic activity.

In addition, although there was no reference to it in the Complainant’s submission, the Respondent stated that in 2014, the Complainant’s counsel notified the Respondent (through the Registrar) of the Respondent’s alleged infringement of the Complainant’s trademark and offered the Respondent the sum of EUR 1,000 to purchase the Domain Name. The Respondent subsequently replied that it had no interest in selling the Domain Name. The Panel noted that no counter-offer was made by the Respondent and there was no record of any further communications between the Parties about the Domain Name after 2014.

As a result, in the absence of any evidence that the Respondent had the Complainant’s trademark in mind at the time of registration of the Domain Name, the Panel found that the Complainant had failed to demonstrate that the Domain Name was registered and used in bad faith. The Panel therefore denied the transfer of the Domain Name to the Complainant.

As per the Respondent's request, the Panel considered the issue of “Reverse Domain Name Hijacking” (RDNH), defined in paragraph 1 of the UDRP Rules as “using the Policy in bad faith to attempt to deprive a registered domain name holder of a domain name”. The Panel therefore reviewed the overall circumstances of the case, and, noting that the Complainant’s case was not very strong nor well presented, concluded that the Complainant did not realise that its trademark was not as fanciful as it thought and could be legitimately used not only as a trademark but for many other purposes as a descriptive term in various languages. In the Panel’s view, if the Respondent had made it clearer back in 2014 when the Parties exchanged correspondence what its business was, the Complainant would have had the opportunity to investigate the Respondent’s business and realise that it did not have any legitimate grounds to recuperate the Domain Name. As this did not occur, the Panel found that the Complainant had simply misunderstood the elements required for a transfer under the UDRP and overrated the reach of its trademark.

In light of this, the Panel declined to make a finding of Reverse Domain Name Hijacking.

The decision underlines that it is generally necessary for UDRP complainants to prove that respondents registered domain names at issue with the complainant in mind, with the specific intention of profiting from their goodwill and reputation. However, complainants should exercise caution when their trademarks are not completely fanciful, especially with regard to trademarks that also consist of dictionary terms in certain languages.

The decision is available here.

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Reboxed "Plan-B" complaint fails to deliver

In a recent decision under the Uniform Domain Name Dispute Resolution Policy (UDRP) before the World Intellectual Property Organization (WIPO), a three-member UDRP panel denied a UDRP Complaint for the disputed domain name reboxed.com, entering a finding of Reverse Domain Name Hijacking (RDNH).

The Complainant, Reboxed Limited, was a company incorporated in England and Wales in 2019, engaged in the purchase and sale of used mobile phones. The Complainant had registered trademarks for REBOXED in the United Kingdom and in the European Union, the earliest of which was applied for on 31 July 2019, and registered on 22 May 2020.

The disputed domain name was first registered on 9 November 2010. The Respondent claimed that his wife had acquired the disputed domain name in December 2012, and that the WhoIs information for the disputed domain name was updated on 7 November 2014 to reflect the Respondent's name. Between May and November 2019, individuals who would go on to form the Complainant company attempted to negotiate the purchase of the disputed domain name. Those negotiations ultimately proved unsuccessful. In August 2020, the disputed domain name resolved to a website including the wording "Reboxed is a consumer marketplace to Sell, Swap and Shop Used, Refurbished and PreOwned Consumer Items."

The Complainant asserted that the disputed domain name was identical to its REBOXED trademark. The Complainant submitted that the Respondent had no rights or legitimate interests in the disputed domain name. The Complainant argued that the Respondent had sought to create confusion between the disputed domain name and the Complainant's trademark for its own commercial purposes. The Complainant asserted that the disputed domain name was registered and was being used in bad faith. In this regard, the Complainant argued that the Respondent had registered the disputed domain name for the purpose of selling it to the owner of a trademark associated with the disputed domain name, at a profit, as evidenced by the Respondent's asking price of GBP 29,150 for the disputed domain name, during the Parties' negotiations in 2019. The Complainant further asserted that the Respondent's inclusion of the statement "Reboxed is a consumer marketplace to Sell, Swap and Shop Used, Refurbished and PreOwned Consumer Items" on the website to which the disputed domain name resolved served as further evidence of the Respondent intention to attract Internet users to its website by causing confusion with the Complainant's trademark.

The Respondent accepted that the disputed domain name was identical to the Complainant's trademark. The Respondent submitted that he had rights or legitimate interests in the disputed domain name by virtue of the fact that the disputed domain name corresponded to a dictionary term. The Respondent denied having registered the disputed domain name in bad faith, noting that the disputed domain name was acquired by the Respondent's wife in 2012, several years before the formation of the Complainant. The Respondent submitted that the Complainant had relied on a misguided interpretation of paragraph 4(b)(i) of the UDRP, noting that bad faith registration involves an intention to sell a domain name specifically to the complainant, or a competitor of the complainant. The Respondent referred to the failed negotiations for the sale and purchase of the disputed domain name, and asserted that the Complaint was brought in bad faith as a so-called "Plan‑B" complaint.

To be successful under the UDRP, a complainant must satisfy the requirements of paragraph 4(a) of the UDRP:

(i) the disputed domain name is identical or confusingly similar to a trademark or service mark in which the complainant has rights;

(ii) the respondent has no rights or legitimate interests in the disputed domain name; and

(iii) the disputed domain name was registered and is being used in bad faith.

Under paragraph 4(a)(i) of the UDRP, the Panel found that the disputed domain name was identical to the Complainant's REBOXED trademark.

Given that the Complaint would go on to fail under the third element, the Panel did not consider it necessary to enter a finding on the question of rights or legitimate interests.

Under paragraph 4(a)(iii) of the UDRP, the Panel noted that the disputed domain name was acquired personally by the Respondent no later than November 2014, whereas the Complainant company was not formed until July 2019. The Panel accepted the Respondent's submission that it was impossible for the Respondent to have been aware of the Complainant's trademark at the date of registration of the disputed domain name. The Complainant went on to expressly reject the Complainant's interpretation of paragraph 4(b)(i) of the UDRP, which required an intention to sell the disputed domain name to a current trademark owner, and not to an unknown as yet non‑existent party who may in the future have acquired an interest in a relevant trademark. The Panel found that the Complainant had failed to establish that the disputed domain name was registered in bad faith.

In entering a finding of RDNH, the Panel found that the Complainant, who was legally represented, knew or ought to have known that the Complaint had no reasonable prospect of success. While the Panel accepted that the inclusion of the statement "Reboxed is a consumer marketplace to Sell, Swap and Shop Used, Refurbished and PreOwned Consumer Items" on the website at the disputed domain name may have been interpreted as provocative, it ought to have nevertheless been clear to the Complainant that it could not prove bad faith registration under a plain reading of the UDRP. The Panel agreed that the case constituted what is known as a "Plan-B" Complaint, where the Complainant had misused the UDRP in an attempt to wrest the disputed domain name from the Respondent, after it had failed in negotiations to purchase the disputed domain name.

The above case highlights the importance of a plain reading of the UDRP. It is a well-established principle from prior UDRP cases and in jurisprudential summaries that the mere registration of a domain name and offering it for sale does not in itself amount to bad faith. Complainants seeking to rely on paragraph 4(b)(i) of the UDRP are required to assess whether the trademark relied upon to establish bad faith was in existence at the time that the disputed domain name was registered. Failure to do so risks consciously or unconsciously reading "retroactive bad faith" into the UDRP – an interpretation of the UDRP that has been categorically rejected in decisions over the last ten years. In addition, where a complainant's case is weak from the outset, resort to the UDRP subsequent to a failed attempt to purchase a domain name may well result in a finding of RDNH.

The decision is available here.

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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