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Looking Ahead - UDRP Bad Faith Analysis and New gTLDs

The Internet, at nearly every stage of its evolution, has effected change in existing intellectual property industries as those industries struggle to keep up with the march of technological advancement. For example, the entertainment industry has seen widespread piracy and bootlegging of just and soon-to-be released movies as a result of the increased availability of broadband Internet access in the home, and efficient peer-to-peer file-sharing technologies online. In response the entertainment industry has backed a wave of proposed legislation including the maligned Stop Online Piracy Act (SOPA) and Protect IP Act (PIPA).

In the trademark realm, one of the big questions presented by the early Internet was how to deal with “cyber-squatters”—those who would seek to profit by improperly reserving domain names equivalent to the trademarks of famous companies or people. Cyber-squatters attempt to profit by holding a domain name hostage, offering to sell the domain back to the proper party at a significant markup, or generating fees from user confusion via posted ads on the website. This issue was addressed by the introduction of the Uniform Domain Name Dispute Resolution Policy (UDRP), an international system concerning the arbitration of domain name disputes. Parties who believe that a domain name has been registered improperly (i.e., includes a name or mark that they have rights in) can file an arbitration complaint to dispute the ownership of the domain. The UDRP has been active for more than a decade and, though not perfect, has created a preferred method for resolving domain disputes.

The status quo of the domain name system is set to be upended with the introduction of new generic top level domains (gTLDs) that may add thousands of new extensions. This is an unprecedented increase in the size and scope of the Internet’s naming convention system. Although there is no plan to overhaul the UDRP in response to the new gTLDs, there will likely have to be a change in how arbitrators evaluate the merits of a UDRP claim as a result of having new and more specific suffixes which are tied to the registered domain.

How are domain names featuring trademarks analyzed in UDRP decisions and how does this relate to the new TLDs?

A successful UDRP challenge consists of three elements: 1) a domain name identical or confusingly similar to a trademark of the complainant; 2) a respondent who has no corresponding legitimate interest or rights to the same domain name; and 3) bad faith registration or use of the domain name, typically evinced by an attempt to turn an illegitimate profit. (See Section 4(a) of the UDRP for more details.)

For the first portion of the test relating to similarity, the top level domain (TLD)—the extension after the dot (like .com, .net) when entering a web address—is ignored by UDRP arbitrators as a matter of necessity. For example, in a case concerning the Miss Universe trademark and the domain name miss-universe.org was properly held to be similar to the trademark “Miss Universe.” Use of other top level domains like .com, .net, etc. instead of “.org” would have been equally inconsequential and led to the same result. The reason for this is simple—until now most TLD extensions have been sufficiently devoid of meaning so as to be ignorable. While .com, .org, etc. initially evolved as ways of distinguishing sites from one another based on the nature of the content—commercial (.com) as opposed to non-profit (.org), for example—those distinctions in the mind of the public have largely been obliterated. With the possible exceptions of .edu and .gov, which are restricted to appropriate educational or government entities, today’s savvy Internet user does not likely think much of the significance of a TLD.

How should the new gTLDs be treated considering they may carry more meaning than traditional TLDs?

With the roll-out of the new gTLDs the browsing habits of users may change significantly. Specifically, many of the new gTLDs will extend beyond the three letter (.com) paradigm and, indeed, form full words, such as .music, .home, .surf, .cloud, .design, .computer, .book, etc. Even those that continue to remain three letters will gain new suggestive properties. For example, .pro will stand for “professional,” and will be restricted as such, which suggests something about the qualifications of the site creator. In particular, if the gTLD actually consists of a word that connects with the domain name to form a compound term or phrase, the gTLD becomes much harder to ignore. But introducing the new gTLDs into the similarity stage of the UDRP test would only seem to make things more difficult. For example, under the current similarity analysis, Apple.com is treated the same as Apple.net. Under the new gTLDs, rather, something along the lines of “Apple.computer” will carry a different suggested meaning than “Apple.net”. It denotes something specific about what the user will find at that domain—a computer company. Continuing to treat .net and .computer as identical without more sophisticated analysis would be problematic and would rob new, distinctive gTLDs of their intended meaning.

The UDRP system has already faced a similar conundrum with ccTLDs (country code top level domains). Each country code initially was meant to indicate a website based in a certain country. However, due to the lack of registration restrictions on certain ccTLDs that are additionally attractive because they help form parts of other words or are words themselves, UDRP arbitrators have had to respond creatively and have sometimes intentionally included the ccTLD in the similarity analysis. For example, in a 2009 case, a claimant who owned the trademark PROJECT.ME successfully brought a UDRP action against a party who registered the domain “www.project.me” (using the unrestricted ccTLD for Montenegro). Rather than forcing the claimant to allege similarity of his “Project.me” mark to only the word “project,” the arbitration panel rightly concluded that the ccTLD could not be ignored when assessing similarity. The mark and the domain name were deemed identical.

Conclusion and Suggested Course of Action

Even with the addition of hundreds or even thousands of new gTLDs to the domain name system, UDRP arbitrators do not have to disturb the current practice of generally ignoring TLDs in the similarity stage of the analysis. Instead they should look at the gTLD, and how it fits in as part of the entire domain name in terms of the commercial impression, as part of the bad faith prong of the analysis.

First, arbitrators should recognize that where an alleged cyber-squatter intentionally uses a gTLD that is unrelated to the goods/services covered by the complainant’s trademark, it is likely a sign that the registrant was not acting in bad faith. For example, if an apple producer in upstate New York registered the domain name “Apple.farm” the similarity analysis would still hinge on the term “Apple,” but the gTLD .farm should be looked at as a distinguishing factor and evidence that the registrant may not have been acting in bad faith when it registered the domain name. While the content of the site will be an important factor, assuming that the site has something to do with farms and not computers, the .farm extension should not be ignored.

Second, in cases where a gTLD does not merely serve to distinguish the domain name from other identical or similar domain names, but rather forms a word or phrase in conjunction with the domain name (such as in the Project.me example above), arbitrators should continue to follow the practice used above with ccTLDs at the similarity stage of the analysis. Combining the TLD and the domain name and comparing them to the trademark at issue will continue to be adequate to protect rights holders in these cases.

Using the above two approaches, arbitrators need not be flummoxed by the sudden influx of new TLDs, as the same guiding principles that have been used to decide domain disputes since 1999 are still relevant and necessary. Instead, UDRP arbitrators should simply consider the practical effects that the new gTLDs will have, and make sure they apply the UDRP in a flexible manner so that differences between gTLDs are part of the analysis where the meaning and implication of a domain name is affected.

By Sean Comerford, Writer for DomainSkate.com and Recent Graduate of Brooklyn Law School

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