Anchovy News, November / December 2020

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This is the November / December 2020 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

  • Launch of .FORUM
  • Nominet introduces landing pages
  • A digital shift for .AU
  • Domain name registrations continue to rise

DOMAIN NAME RECUPERATION NEWS

  • Bad faith registration and use was not Técnically demonstrated
  • Solid evidence required to establish unregistered trade marks in descriptive terms
  • Transfer out of the picture
  • UDRP not a forum for parties to resolve complex business disputes

    Newsletter sections:

Newsletter sections:

  • Domain name industry news
  • Domain name recuperation news

For earlier Anchovy News publications, please visit our Domain Names practice page.

Domain name industry news

Launch of .FORUM

The Registry Minds + Machines Group Limited (MMX), has recently launched the new generic Top Level Domain (gTLD) .FORUM.

MMX holds a portfolio of various new gTLDs, including the popular .VIP (which is the 8th new gTLD in terms of volumes of domain name registrations, with approximately 1.09 million domain names) and .WORK (which ranks 10th with approximately 756,000 domain names). By way of comparison, the top ranking new gTLD is .ICU with approximately 5.27 million domain names.

The launch of .FORUM has recently started according to the following schedule:

  • Sunrise: 16 November 2020 – 16 December 2020.
    During this period, trademark holders who have registered their trademark(s) with the Trade Mark Clearing House (TMCH) can apply for the corresponding .FORUM domain name(s). As this is a "Start Date" Sunrise, domain names are allocated on a first come, first served basis.
  • General availability: 2 March 2021
    Domain names will be available for everybody on a first come, first served basis from 2 March 2021 onwards.

There are no registration requirements thus anyone can apply for a .FORUM domain name.

The price will however put many applicants off as, depending on the registrar, the registration cost and subsequent yearly renewals appear to be in the region of $700-$1,000.

Nevertheless, in an era that advocates freedom of speech and sees everybody comment on everything, we would advise brand owners to consider .FORUM in view of its potential use, even for defensive purposes, as was the case when .SUCKS launched five years ago.

Nominet introduces landing pages

Pursuant to its 2019 .UK Policy Consultation, Nominet, the “profit with purpose” organisation that oversees the .UK country code Top Level Domain (ccTLD), decided in March 2020 to introduce law enforcement landing pages for domain names suspended due to criminal activity. Subsequently, on 24 November 2020, it announced that it had gone live with its first pilot partner, City of London’s Police Intellectual Property Crime Unit (PIPCU), to redirect suspended domain names to an official landing page.

The mechanisms for the suspension of .UK domain names and the law enforcement agencies that may request such a suspension, including the Counter Terrorism Internet Referral Unit (CTIRU), the Medicines and Healthcare products Regulatory Agency (MHRA) and the Police Intellectual Property Crime Unit (PIPCU), are detailed in Nominet’s Criminal Practices Policy.

Under the phased pilot project, some domain names used for criminal activity will be redirected to the new landing page. This landing page states that the domain name in question has been suspended on the advice of PIPCU and directs users who have been affected by any activity relating to the suspended domain name to Action Fraud, the UK’s national reporting centre for fraud and internet crime.

During the first phase of the pilot project, only domain names used for criminal activity that are referred to Nominet by PIPCU will be redirected to the landing page, which was developed in collaboration with PIPCU “to provide clear messaging for the benefit of the public.” Nominet pointed out that PIPCU referrals account for the majority of the 108,589 .UK domain names that have been suspended for criminal activity since 2014.

For the time being, all other domain names used for criminal activity and brought to Nominet’s attention by any of the law enforcement agencies listed in the Criminal Practices Policy other than PIPCU will continue to be dealt with in the same manner as they are currently.

However, in 2021, Nominet will extend the pilot to include the Medicines and Healthcare products Regulatory Agency (MHRA), which is likely to be significant in the context of the release of Covid 19 vaccines as this is the agency that is responsible for approving vaccines.

Nominet has stated that, upon conclusion of the pilot, it will assess the impact and report publicly on next steps. It is also encouraging feedback as part of the pilot.

Eleanor Bradley, MD of Registry & Public Benefit at Nominet stated of the pilot project that it:

“…seeks to provide real time education and advice to those who may have been victims of criminal activity at the point they attempt to access the website in question. It is the latest step in our strong collaboration with UK law enforcement agencies and we’ll be monitoring the pages closely to determine the benefit for the public to ensure we can help as many people as possible to stay safe when shopping online.”

A digital shift for .AU

.au Domain Administration Limited (auDA), the Registry that oversees the .AU namespace has recently published its Quarterly Report for Quarter 3 2020. The report highlights just how important .AU domain names have been during the current pandemic.

The CEO of auDA, Rosemary Sinclair, notes in her introduction to the report that, due to the challenges and impact of COVID-19, the internet infrastructure, including the .AU namespace, has been vital in keeping communities and businesses connected during the pandemic. This includes allowing families and friends to connect virtually, enabling more flexible working, as well as helping products and services to be delivered to Australian households. This “digital shift” has also seen more new and existing businesses “pivot online”, as businesses come to understand that perhaps now, more than ever, a digital presence is essential for their business.

In turn, auDA has recorded strong growth in terms of .AU domain name registrations, especially under the .COM.AU extension. According to auDA there was a 31 percent increase in new domain name registrations from April to September 2020, in comparison with the same period in 2019. This increase has resulted in a record high of more than 3.2 million domain names now registered in the .AU namespace.

auDA also ran a digital media campaign to promote the .COM.AU domain name extension, especially among small and medium sized businesses. This campaign also emphasised .COM.AU as an “Australian brand” that people could have confidence in, especially as consumers were purchasing more products online, primarily due to the pandemic. For auDA, a .COM.AU domain name “gives people confidence that a business has a local presence”. As part of the same campaign, auDA also took the opportunity to carry out some research, which found that (i) 70% of Australians believe it is important to “support local retailers” when shopping online, (ii) 92% of Australians “associate .COM.AU” with a local business and (iii) 71% of Australians “look for the .com.au” to confirm a local presence.

The Quarterly Report also highlights the work auDA has been doing with domain name registrars with regard to their security arrangements. As part of a new Registrar Agreement, a registrar’s information security management system will need to be “ISO 27001 compliant or equivalent”. This requirement aims to strengthen the security of the .AU namespace, from “registrant through to the Registry”, which will not only provide further safeguards in respect of the handling of personal data, but should also help strengthen people’s confidence in the .AU namespace.

Domain name registrations continue to rise

According to the Verisign Q3 2020 Domain Name Industry Brief, the number of domain name registrations across all Top Level Domains (TLDs) increased by 0.6 million over the second quarter, totalling 370.7 million domain names at the end of Q3. This is rather restrained compared to the 3.3 million increase noticed in Q2, which was due to the pandemic boost as we reported in several Anchovy News articles. As for year over year figures, 2020 saw an increase of 10.8 million (or 3 %), although this is noticeably less than last year. Indeed at the end of Q3 2019 domain name registrations had grown by 17.4 million in a year (or 5.1 %).

As of 30 September 2020, the top ten TLDs by number of reported domain names were:

  1. .COM (Generic) 150.3 million
  2. .TK (Tokelau) 27.5 million
  3. .CN (China) 24.7 million
  4. .DE (Germany) 16.6 million
  5. .NET (Generic) 13.4 million
  6. .UK (United Kingdom) 10.8 million
  7. .ORG (Generic) 10.2 million
  8. .NL (Netherlands) 6.0 million
  9. .RU (Russian Federation) 5.7 million
  10. .ICU (Generic) 5.3 million

Comparing these TLD figures with the same period in 2019, the only changes that can be observed are the disappearance of the extension .TW (Taiwan) from the top ten, with .NL and .RU both moving up a place and .ICU taking the tenth spot.

The number of country code Top Level Domain (ccTLD) registrations is however slightly in decline. Although there was an increase of 0.3% between the second and third quarters with the total number of domain names reaching 160.6 million, at the same period last year the number of reported ccTLD registrations was 161.8 million.

The top 10 ccTLDs, as of Sept. 30, 2020, were:

  1. .TK (Tokelau) 27.5 million
  2. .CN (People's Republic of China) 24.7 million
  3. .DE (Germany) 16.6 million
  4. .UK (United Kingdom) 10.8 million
  5. .NL (Netherlands) 6.0 million
  6. .RU (Russian Federation) 5.7 million
  7. .BR (Brazil) 4.5 million
  8. .EU (European Union) 3.6 million
  9. .FR (France) 3.6 million
  10. .IT (Italy) 3.3 million

The report indicates that there are 307 global ccTLD extensions delegated in the root zone (including Internationalised Domain Names, or IDNs), and that the above top 10 ccTLDs account for 66.2% of all ccTLD domain name registrations.

As regards new gTLDs, although there was a decline of 4.7% compared to Q2, the number of registered domain names increased year on year, going from 24 million to 30.2 million, which is a noticeable increase of 25.8%. New gTLDs represent 8.1% of all TLD domain name registrations.

The report thus shows that despite some variations and a lower growth this year, the global number of domain name registrations continues to rise.

Domain name recuperation news

Bad faith registration and use was not Técnically demonstrated

In a recent decision under the Uniform Domain Name Dispute Resolution Policy (UDRP) before the World Intellectual Property Organization (WIPO), a Panel refused to transfer the disputed domain name filizolabalancas.com, finding that the Complainant had failed to prove that the Domain Name had been registered and used in bad faith.

The Complainant was Téchnica Industrial Oswaldo Filizola Ltda., a Brazilian manufacturer of dynamometers and testing machines that registered the domain names oswaldofilizola.com.br in 2001 and oswaldofilizola.com in 2009 and the trademark TÉCNICA INDUSTRIAL OSWALDO FILIZOLA in 2019.

The Respondent was Raphael Barduche, who registered the Domain Name in 2018. The Domain Name resolved to an online shop branded “Filizola Shop” selling scales and related products.

The Complainant initiated proceedings under the UDRP for a transfer of ownership of the Domain Name. The Complainant stated that, in parallel, the Brazilian Court of first instance had issued a preliminary injunction prohibiting the Respondent from using the Domain Name and the case was pending final decision.

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

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

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

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

Under the first element of paragraph 4(a) of the UDRP, the Complainant indicated that it had been using the FILIZOLA trademark (Filizola being the surname of its founder) since its incorporation in 1966, and that it first applied for trademark registration in 2018. The Complainant also stated that it had developed substantial goodwill and recognition due to its long and exclusive use of the FILIZOLA trademark to identify scales and that the Domain Name was confusingly similar to the trademark due to the fact that “balancas” was the Portuguese word for “scales”, products that the Complainant had been selling since its incorporation.

In its defence, the Respondent claimed that the Complainant was attempting to harass him to unlawfully obtain the Domain Name by not disclosing essential facts and information to the Panel, including the fact that the FILIZOLA trademark was coined and originally used by Filizola S/A, a company that was declared bankrupt in 2014. The Respondent explained that the Complainant had never been entitled to use FILIZOLA exclusively as a trademark, but rather only its full corporate name Técnica Industria Oswaldo Filizola, which explained why it had taken 60 years for the Complainant to register the trademark. The Respondent thus considered that the Complainant had no exclusive rights over the trademarks FILIZOLA and BALANÇA FILIZOLA and that, consequently, it was not entitled to claim the Domain Name. The Respondent added that the word Filizola, being a surname, had been registered by other parties who owned trademarks comprising such name, for example the trademark FERNANDO FILIZOLA registered for measuring devices and scales.

The Panel considered that the Complainant had nevertheless established rights in the trademark TÉCNICA INDUSTRIAL OSWALDO FILIZOLA and that the Domain Name was confusingly similar to the trademark, since part of the dominant feature of the trademark was recognisable in the Domain Name.

The Panel decided to address the existence of rights or legitimate interests (second element of paragraph 4(a) of the UDRP) jointly with the question of bad faith use and registration of the Domain Name (third element of paragraph 4(a) of the UDRP).

With regard to the second element of paragraph 4(a) of the UDRP, the Complainant claimed that the Respondent had no rights or legitimate interests in respect of the Domain Name because (i) he had not been using the Domain Name in connection with a bona fide offering of goods or services, (ii) the Domain Name was used to attract internet users for commercial gain as a result of confusion created with the trademark and (iii) the Respondent chose to use a privacy protection service.

The Respondent argued that it had no intention of deceiving the Complainant’s consumers since it had been using the Domain Name in a legitimate manner, in a different segment to the Complainant and it was not targeting the Complainant’s trademark or unduly profiting from an association with it.

With regard to the third element of paragraph 4(a) of the UDRP, the Complainant considered that when registering the Domain Name, the Respondent had a clear intention of creating confusion and practising unfair competition, and that use of a privacy protection service to conceal his identity was a further indicator of bad faith.

The Respondent stated that he had been selling scales online since 2016 and that the Domain Name was registered in 2018, when the Complainant did not have any trademark rights and therefore a bona fide offering of goods and services was characterised. Further, the Respondent rejected the claim that the use of the privacy service indicated bad faith as the use of such services was not forbidden and was common. The Respondent also argued that he was not targeting the Complainant’s trademark or seeking to unduly profit from an association with it.

The Panel found that the Complainant had failed to establish that the Domain Name had been registered and used in bad faith.

In this regard the Panel noted that the Respondent had registered the Domain Name prior to the Complainant’s trademark registration, and pointed out that the Complainant was not the only entity that had used the FILIZOLA trademark. Indeed, another company, established in 1886 by the Italian immigrant Vicente Filizola, had used the FILIZOLA trademark, but had been declared bankrupt in 2014. The Panel considered that bad faith registration and use had not been established in this case, although the fact that the Respondent presented itself on its webpage as a company with customers who “have extended for generations across Brazil” could arguably be read as an attempt by the Respondent to pass itself off as the successor of the original creator of the FILIZOLA trademark, now declared bankrupt. However, with respect to bad faith registration and use in this case, the Panel found that the Complainant had not been able to prove any of the four non exhaustive examples listed at paragraph 4(b) of the UDRP, namely:

“(i) circumstances indicating that you have registered or you have acquired the domain name primarily for the purpose of selling, renting, or otherwise transferring the domain name registration to the complainant who is the owner of the trademark or service mark or to a competitor of that complainant, for valuable consideration in excess of your documented out of pocket costs directly related to the domain name; or

(ii) you have registered the domain name in order to prevent the owner of the trademark or service mark from reflecting the mark in a corresponding domain name, provided that you have engaged in a pattern of such conduct; or

(iii) you have registered the domain name primarily for the purpose of disrupting the business of a competitor; or

(iv) by using the domain name, you have intentionally attempted to attract, for commercial gain, Internet users to your web site or other online location, by creating a likelihood of confusion with the complainant’s mark as to the source, sponsorship, affiliation, or endorsement of your web site or location or of a product or service on your web site or location.”

The Panel considered that the Complainant had not established that the Respondent (i) had been aware of the Complainant or its trademark rights prior to registering the Domain Name, and (ii) was targeting it or its specific trademark rights, as opposed to merely benefitting from the presence and attractiveness of the wording in the Domain Name leading to likely profitable uses. The Panel also noted that the Complainant had applied for the trademark FILIZOLA which was pending analysis by the Brazilian trademark office due to the existence of a previous trademark in the same sector as the Complainant.

The Panel concluded by declaring that the case was not best suited to the UDRP and would be better dealt with by a court with full jurisdiction to address the facts.

This case highlights the importance for UDRP complainants to produce sufficient evidence of bad faith registration and use targeting the complainant itself, notwithstanding the existence of favourable parallel judicial proceedings and interim orders.

The decision is available here.

Solid evidence required to establish unregistered trademarks in descriptive terms

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 due to the lack of solid evidence concerning the complainant’s purported unregistered trademark rights.

The Complainant was The Evergreen Review, Inc., a New York non-profit corporation established in 1997 expressly to “revive and publish” the Evergreen Review, a literary magazine originally published during 1957-1972 and then re-launched by the Complainant as an online review in 1998. The magazine ceased publication in 2013 and was revived under a new publisher and editorial board in March 2017. The Complainant did not hold any registered trademarks in the term EVERGREEN REVIEW but claimed that it had unregistered / common law trademark rights. It also owned the domain name evergreenreview.com, which was being used in connection with the online magazine.

The Respondent was Charles Mingus III, an individual based in the United States.

The Domain Name was evergreenreview.org, registered on 21 January 2019. It was being used to resolve to a landing page with pay-per-click advertising. The Complainant stated that it previously owned the Domain Name when the online magazine was launched in 1998 but subsequently lost control of it “due to an internal oversight”.

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

(a) 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

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

(c) The domain name has been registered and is being used in bad faith.

As far as the first limb was concerned, the Complainant contended that the Domain Name was identical to its unregistered trademark EVERGREEN REVIEW. In order to establish its unregistered trademark rights, the Complainant provided the “About” page of its website with a brief history of the review, links to historical screenshots of its website and an article from March 2017 published online in Daily Beast under the title “Can the once avant garde and erotic Evergreen magazine still excite modern readers?” It further submitted that its unregistered trademark had a long history (i.e., the magazine was originally published 63 years ago) and had been known “both for its commitment to free expression as well as its devotion to an international array of authors and visual work”. The Respondent disputed that the Complainant held any relevant trademark rights since the Domain Name was comprised of two English dictionary words in common use that were not exclusively associated with the Complainant.

In the absence of any registered trademark rights held by the Complainant, it was important for the Panel to assess whether the Complainant could adequately establish that the string “evergreen review” was protected as an unregistered, common law mark under the UDRP. The Panel therefore referred to the WIPO Overview 3.0, section 1.3:

“To establish unregistered or common law trademark rights for purposes of the UDRP, the complainant must show that its mark has become a distinctive identifier which consumers associate with the complainant’s goods and/or services.”

Relevant evidence demonstrating such acquired distinctiveness may include factors reflecting (i) the duration and nature of use of the mark, (ii) the amount of sales under the mark, (iii) the nature and extent of advertising using the mark, (iv) the degree of actual public recognition and (v) consumer surveys.

On this basis, the Panel pointed out that the reputation of the former Evergreen Review magazine, published between 1957 and 1972, was not material as it was simply a print magazine by a different publisher. Furthermore, this magazine did not exist for the next 25 years and was only launched online in 1998 by the Complainant. The Panel also noted that this online publication ceased in 2013 and was then relaunched under the same name in 2017, i.e., less than two years prior to the registration of the Domain Name. Given the non-continuous use of the unregistered mark EVERGREEN REVIEW and particularly the Complainant’s failure to provide any concrete evidence on the circulation of this magazine (for example its subscriber base) and its extent of recognition (apart from a single online article published in 2017), the Panel found that the Complainant had failed to demonstrate long-term, continuous use of a distinctive identifier associated with its goods or services. Unregistered trademark rights were therefore not established for the purpose of the first limb and so this meant that the complaint must fail.

For the benefit of the parties, the Panel continued to briefly discuss the arguments under the second and third limbs.

With regard to the second limb, the Respondent claimed that, as an inventor and artist, he intended noncommercial use of the Domain Name through a nonprofit website reviewing developments in “evergreen” or sustainable technologies. However, he was unable to put in place this plan due to the pandemic shut down this year. He also cited a US patent awarded to him in 2016 and other unpublished works to demonstrate his background in evergreen technologies.

Despite the Respondent’s assertions above, the Panel considered that he had not yet made any such use of the website and allowed the Domain Name to be used in the interim for unrelated commercial advertising, which would not constitute legitimate noncommercial or fair use in this context. The second limb was therefore satisfied.

Regarding the third limb, the Complainant contended that the Respondent must have prior knowledge of its unregistered mark since it was in fact the magazine’s former publisher who urged the Respondent to acquire the Domain Name so as to interfere with the Complainant’s business operations. The Respondent denied that the former publisher or anyone else “urged” him to register the Domain Name and provided an email sent from the said publisher in October 2020, in which she seemingly stated that the Domain Name was previously owned by her late husband rather than by the Complainant and that she had responded to pressure by agreeing to inquire about the transfer of the Domain Name.

In the Panel’s opinion, although it was unclear whether the Respondent had conspired with the former publisher, the Respondent’s denial of his prior knowledge of the Complainant seemed plausible since the Complainant only operated a nonprofit literary review of unknown circulation and with limited public recognition and it seemed unlikely that the Respondent would be motivated to target the Complainant to obtain financial gain by creating confusion. In any event, as the burden of proof under the third limb rested with the Complainant, the Panel stated that it would likely find that the Respondent had prevailed, even if the Complainant had sufficient evidence of common law trademark rights.

Under the UDRP, holding a registered trademark is considered a prerequisite for satisfying the requirements of the first limb. For complainants who don’t have a registered trademark, it is possible to rely on unregistered or common law trademark rights as long as there is solid and specific evidence demonstrating that the term has given rise to distinctiveness / secondary meaning associated with the Complainant. If the asserted unregistered trademark is comprised solely of descriptive terms which are not inherently distinctive, such as “evergreen review” in the present case, there is a greater onus on complainants to present concrete and convincing evidence of acquired distinctiveness/secondary meaning rather than conclusory allegations.

The decision is available here.

Transfer out of the picture

In a recent decision under the Uniform Domain Name Dispute Resolution Policy (UDRP) before the World Intellectual Property Organization (WIPO), a three-member Panel refused to transfer the disputed domain name picture.com, finding that the Complainant had failed to prove that the Respondent had no rights or legitimate interests and had registered and used the domain name in bad faith, and entering a finding of Reverse Domain Name Hijacking (RDNH).

The Complainant was Picture Organic Clothing, a French clothing company producing eco-friendly clothes and accessories. The Complainant registered several trademarks for PICTURE between 2011 and 2012. Prior to filing the Complaint, the Complainant had received an unsolicited offer from a domain name broker offering the domain name for sale with an asking price of USD 350,000.

The identity of the Respondent was an issue in this case. The Respondent was initially identified as a privacy service. The Complainant also asserted that the Respondent "could also be" the domain name broker who had contacted them previously. The registrar then disclosed registrant information and identified James Booth, an individual, as the Respondent. However, in the submitted Response it was asserted that the actual true and beneficial owner was a company named Booth.com, Ltd, an internet business dealing in buying, selling or leasing domain names.

The Panel found that Booth.com, Ltd could also be treated as a Respondent as there was evidence linking this company to James Booth. However, the Panel refused to include the domain name broker as a Respondent, finding that the Complainant had failed to provide evidence linking the domain name broker and the Respondent and had also failed to rebut evidence provided by the domain name broker showing that there was no link between them.

The disputed domain name was originally registered in September 1994 by a third party and was acquired by the Respondent in 2019 from the same domain name broker who had originally approached the Complainant. The domain name resolved to a web page offering it for sale.

The Complainant initiated proceedings under the UDRP for a transfer of ownership of the domain name. The Respondent submitted a Response requesting the Panel to enter a finding of RDNH.

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 Complainant had established rights in the PICTURE trademark, and that the disputed domain name incorporated the textual elements of the Complainant's registered mark in their entirety.

Under paragraph 4(a)(ii) of the UDRP, the Panel considered that the Complainant had failed to establish a prima facie case that the Respondent had no rights or legitimate interests. Specifically, the Panel found that the Complainant had failed to provide evidence that the Respondent registered the disputed domain name in order to profit from it at the expense of the Complainant. The Panel further stressed that the domain name consisted of a commonly used dictionary word and as such, constituted a valuable asset which explained its acquisition by the Respondent.

Under paragraph 4(a)(iii) of the UDRP, the Panel held that the Complainant had failed to establish bad faith registration and use by the Respondent. The Complainant had based its argument solely on the fact that the domain name did not resolve to an active website and that the Respondent only sought to sell it. The Panel again underlined the fact that the disputed domain name consisted entirely of the dictionary term "picture" and thus had an inherent value which could be exploited legitimately as long as the registrant did not take advantage of or exploit the trademark rights of another party. The Panel held that the Complainant had failed to submit evidence to the contrary. Indeed, the Panel found that the Complainant had not provided evidence of its use of the PICTURE trademark, its reputation or fame. Nor did the Complainant establish that the Respondent had acquired the disputed domain name to target the Complainant's trademark rights or to use the domain name in connection with a website aimed at goods and services associated with the Complainant.

The majority of the Panel concluded by entering a finding of RDNH considering the filing of a complaint regarding a domain name that fully consisted of a common dictionary word without providing any evidence of registration or use in bad faith, added to the fact that the Complainant persisted in asserting that the domain name broker could be the Respondent. In the Panel's opinion this indicated that the Complainant knew or ought to have known that its Complaint was doomed to fail.

It should be noted that one Panel member disagreed with the majority on the finding of RDNH and found that the Complainant did not use the UDRP in bad faith to attempt to deprive the Respondent of the domain name. The dissenting Panel member noted that the Complainant had merely failed to meet the UDRP criteria which should not necessarily entail a finding of RDNH. In the dissenting Panel member’s opinion, the "domainer world" was difficult for trademark holders, as having a valid trademark and being asked for a substantial amount of money for a domain name which consisted exclusively of this trademark was not necessarily abuse, which could be difficult to grasp from a classic trademark perspective.

This decision illustrates an essential difference between the rules applicable to trademarks and those applicable to domain names. Namely, the lack of use of a domain name, as opposed to the lack of use of a trademark, or the registration of a domain name just to sell it, will not preclude the registrant from prevailing in UDRP proceedings. Domain names operate on a "first come, first served" basis and simply registering a domain name consisting of a descriptive word (which could also be registered as a trademark) with the intention of selling it for a profit later is not necessarily prohibited. On the contrary, such practices are common and trademark owners should be mindful of this. In the event of UDRP proceedings, trademark owners should tread carefully and gather reliable and convincing evidence of bad faith, otherwise their complaint will almost certainly be denied.

The full decision is available here.

UDRP not a forum for parties to resolve complex business disputes

In a recent decision under the Uniform Domain Name Dispute Resolution Policy (UDRP) before the World Intellectual Property Organization (WIPO), a UDRP panel denied a UDRP Complaint for the disputed domain name innvectra.com, finding, inter alia, that the dispute between the Parties fell well outside the scope of the UDRP.

The Complainant, Innvectra Softech Pvt. Ltd. was an Indian company operating as a provider of IT services. The Complainant was incorporated in 2010. The Complainant had registered trademarks for INNVECTRA.

The Respondents were named as Innvectra Info Solutions Pvt. Ltd. (the Respondent company), an Indian company incorporated in 2007, together with Mr. Venkata Ravindra Babu Mannam, aka Ravindrababu MV (the Respondent). The Respondent served as the managing director of the Complainant from 2010 to 2017, during which time the disputed domain name was used by the Complainant. In May 2017, the Respondent appears to have resigned from his role as managing director of the Complainant.

The Complainant asserted that it was incorporated in 2010, when the Respondent together with a third‑party company based in the United States decided to form a new company. The Complainant alleged that it had been the sole exclusive owner and user of the INNVECTRA trademark since 2010, and that the Respondent had transferred the disputed domain name and website unconditionally to the Complainant. The Complainant further argued that the Respondent had stopped using the INNVECTRA trademark and that no worthwhile business was carried out by the Respondent after forming the Complainant in 2010. The Complainant asserted that the Respondent's prior interests in the INNVECTRA trademark had therefore lapsed, and that these had been subsumed by the Complainant in 2010. The Complainant claimed that there was an implicit understanding between the Parties that the Respondent would cease using the INNVECTRA trademark and the disputed domain name after forming the Complainant. The Complainant asserted that payment for the disputed domain name was borne by the Complainant from 2010 to 2017, during which time the disputed domain name was used exclusively by the Complainant. The Complainant asserted that the Respondent company was covertly operated and kept active. The Complainant claimed that disputes had arisen between the Parties due to the wrongful use of the disputed domain name, that the Respondent had applied for a trademark registration for "innvectra", despite having surrendered his rights in the same as well as the disputed domain name, and that the Respondent had hijacked the disputed domain name and made changes to the website to which it resolved, in order to benefit from the goodwill and Internet traffic associated with the INNVECTRA trademark.

The Respondent asserted that the INNVECTRA trademark was adopted when the disputed domain name was registered by the Respondent on 2 December 2003, noting that "Innvectra" was part of the Respondent company's name, which was incorporated on 3 August 2007. The Respondent provided evidence of its use of the trademark prior to the incorporation of the Complainant. The Respondent claimed that no rights in the INNVECTRA trademark had been transferred to the Complainant. The Respondent asserted that in October 2017, it was agreed between the Parties that the Complainant company would be dissolved, but that the Complainant had continued to use the INNVECTRA trademark, and that the Complainant had obtained a trademark registration for INNVECTRA in June 2017. The Respondent further claimed that a settlement agreement had been entered into between the Parties regarding the use of the INNVECTRA trademark, but that the Complainant had not honoured the terms of that agreement. The Respondent submitted that the Complaint had been filed in bad faith, and requested that the Panel enter a finding of Reverse Domain Name Hijacking (RDNH).

The Panel noted that the Parties had filed several trademark disputes against one another, and that the Respondent had filed a civil proceeding against the Complainant before a court in India.

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.

In a preliminary statement, the Panel noted that this case involved a highly complex dispute between the Parties, which happened to involve the disputed domain name. The Panel accepted that the disputed domain name was registered by the Respondent in 2003, and that the Complainant had used the disputed domain name from 2010 to 2017 under a business arrangement between the Parties. At the same time, the Panel noted that there were no documents on record to show whether rights in the INNVECTRA trademark and disputed domain name had been transferred outright by the Respondent to the Complainant. Rather, it appeared to the Panel that the Parties had entered into an undocumented arrangement and had relied on an "implicit understanding" insofar as the Complainant's use of the disputed domain name was concerned. Whether the Complainant had acquired rights in the INNVECTRA trademark to the exclusion of the Respondent, based on such "implicit understanding" was not an issue that the Panel was able to determine. The Panel considered that such a determination involved complex findings of fact, to be resolved by a court of competent jurisdiction, noting that the UDRP did not provide a forum for parties to resolve complex business disputes, such as in the case at hand.

Under paragraph 4(a)(i) of the UDRP, the Panel noted that the disputed domain name reproduced the INNVECTRA trademark, but declined to make a decisive finding, in light of the unusual circumstances of the case.

Similarly, the Panel refrained from entering a finding under paragraph 4(a)(ii) of the Policy, in light of the ongoing business dispute between the Parties, noting that the Complainant's use of the INNVECTRA trademark from 2010 to 2017 gave rise to complex questions as to the rights of each Party in the mark.

Under paragraph 4(a)(iii) of the UDRP, the Panel noted that it was not disputed that the Respondent had registered the disputed domain name in 2003, and that the Respondent was the first to adopt the INNVECTRA trademark. Accordingly, the Panel found that the Respondent had not targeted the Complainant at the time that the disputed domain name was registered, and that the Complaint therefore failed on the basis that the Complainant had not established that the disputed domain name had been registered in bad faith.

Given that the issue of the Parties' rights in the INNVECTRA trademark was still subject to determination before the relevant authorities, the Panel determined that the Respondent had not established that the Complainant had engaged in RDNH.

There are two important considerations that may be taken away from this decision.

First, under a plain reading of the UDRP, it ought to have been clear to the Complainant that it would not succeed under the third element. Indeed, the Complaint appears to be founded in the misguided view that the transfer of rights in a trademark somehow negated the Respondent's initial good-faith registration of the disputed domain name later corresponding to that trademark, when in fact, there was simply no evidence of the Respondent's bad-faith intent to target any then-nascent trademark rights, where the disputed domain name was registered several years prior to the creation of the Complainant company.

Secondly, this case underscores the importance of clear contractual provisions that account for the use of a domain name pursuant to a business relationship, separate from other classes of intellectual property, including those that are to take effect upon both the planned as well as unexpected termination of the business relationship.

The full decision is available here.

[View source.]

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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