The UDRP is a forum of limited jurisdiction designed for trademark owners to combat a certain kind of tortious (sometimes tipping to criminal) conduct by which registrants register domain names with the bad faith intent of taking economic advantage of owner’s marks and injuring consumers by beguiling them to disclose personal information. The forum is not open to trademark owners whose claims are outside its scope, even though they may include allegations of cybersquatting.

Broadly speaking, these out of scope disputes arise between parties with current or past business relationships, BubbleMania and Company LA, LLC ® v. Caroline Dues / BubbleMania and Company Inc., FA160300 1663923 (Forum April 11, 2016); or between parties “who each have at least a prima facie case for rights in the disputed domain names,” Love v. Barnett, FA 944826 (Forum May 14, 2007). In the majority of cases held to be outside the scope the parties are known to each other. The reverse is true for disputes within the scope; parties are mostly strangers.

Generally, claims of abusive registration that cannot be disentangled from business disputes, that raise questions of express or implied contractual interpretation, are not ripe for the UDRP. If they are actionable at all they belong in court. To prevail on a claim in a UDRP proceeding there must be evidence in the record sufficient in litigation terms for summary judgment, and this calls for a disciplined understanding of the evidentiary requirements and a strategic sense of what belongs in the complaint.

In fact, thinking in litigation terms helps us map the territories within and outside the scope. Disputes belong in a UDRP proceeding when the pleading raises fact issues that can be resolved by summary judgment; and not otherwise. The simplest examples of claims disqualified from UDRP proceedings are those in which disputes between parties with business relationships raise questions of authority (who authorized respondent to acquire the challenged domain name?), Healthgrades Operating Company, Inc. v. Erick Hallick, FA1604001672836 (Forum June 9, 2016) (in which Respondent accused of hacking and fraudulently taking control of the domain name is on Complainant’s Board of Directors as a representative of the former owner of the company); or admitting that Respondent “originally registered the domain incorrectly but in good faith.” MakerPlace, Inc. v. Michael Salmon, FA1604001671961 (Forum June 4, 2016) (in which the parties were formerly in an agency relationship without any clear contractual language of Complainant’s rights or Respondent’s duties).

A more complex set of facts is illustrated in BubbleMania. (more complex in part because the Respondent defaulted). The complaint alleges a classic business dispute with questions about the legitimacy of Respondent’s registration, which appears to have been authorized on instructions from the prior owner:

Complainant claims to have purchased all rights in the BUBBLEMANIA AND COMPANY mark, and all associated intellectual property, which includes the disputed domain name. Complainant argues that Respondent was hired by the former owner of the BUBBLEMANIA AND COMPANY mark to register the domain name, but that Respondent retained ownership of it, and then after Complainant’s purchase, promised, and then refused, to transfer ownership of the domain name to Complainant.

It is difficult to draw inferences from unsettled, unexpressed, or undocumented facts. Because the dispute is between purchaser and seller of a business, and there is no explanation for the registration without examining and interpreting their contract (that is, answering the question as to why the domain name was not transferred along with associated intellectual property?), the Panel found that it “falls outside the scope of the UDRP.” Were the dispute to now move to federal court default would, of course, be conclusive, not from drawing inferences but from admission of the truth of the allegations.

In contrast, parties actually engaged in pending litigations or have filed complaints in courts of competent jurisdiction after filing UDRP proceedings will be subject to UDRP Rule 18(a) which states that “the Panel shall have the discretion to decide whether to suspend or terminate the administrative proceeds, or to proceed to a decision.” An illustration of this is Sun Ray Chinese School, Inc. v. Hui Chiu / Mei Hsu, FA1604001668860 (Forum May 16, 2016) in which the Panel concluded that

After analyzing the facts as well as the evidences brought by the parties, the Panel finds that it seems more reasonable to defer to the concurrent court case. The rationale for this decision is that a panel should not enter a decision when there is a court proceeding pending because no purpose is served by the panel rendering a decision on the merits, whether to transfer the disputed domain names, or otherwise. . . . Furthermore, the Panel finds that the case seems to present a legitimate trademark dispute.

As the Panel also noted “it is hard to properly adjudicate a dispute where two parties claim to be entitled to the disputed domain names and rights over the SUN RAY trademark and where little opportunity is given in a forum such as this to adequately test and assess the wide-ranging and conflicting assertions made by the parties.”

There is no monopoly of common phrases adopted as trademarks and ordinarily claims of right to weak trademarks are within the scope of UDRP, but not if there are legitimate grounds for challenging the trademark. In NZ Manufacturing, Inc. v. Eric Snell, FA1604001670641 (Forum June 3, 2016) (involving a trademark for STRETCHCORDZ) Respondent notified the provider that it had filed a Petition with the USPTO for Cancellation of Complainant’s Trademark on grounds of genericness. In terminating the proceedings, the Panel reasoned “the existence of rights and/or legitimate interests turns on resolution of a legitimate trademark dispute.” The Panel concluded that there was “more at stake in this dispute” and that the TTAB’s determination was important because here there was a “conflict between legitimate interests of two fair users.” Basically,

Complainant as a holder of registered trademarks, who has been fairly using its marks for an extended period of time, challenges the disputed domain name which is confusingly similar to its marks and, at the same time, consists of generic terms. There is no doubt as to the generic nature of the words “stretch cordz”, even in view of the alternative spelling of the last letter in the word “cords”. Neither Complainant, nor Respondent are the “authors of this alternative form of spelling” widely used in commerce.

Deeply embedded in this decision is a policy first enunciated in the WIPO Final Report that “the scope of the procedure is limited so that it is available only in respect of deliberate, bad faith, abusive, domain name registrations or “cybersquatting” and is not applicable to disputes between parties with competing rights acting in good faith.”

However, competing rights by itself is within the scope of the Policy, although could theoretically be outside if there is a possible claim for trademark infringement. In Petrofac Services Limited v. Petrofac Qatar WLL, D2016-0388 (WIPO May 19, 2016) (PETROFAC and ) the Panel pointed out that “the circumstances of this dispute may give rise to a legitimate trademark infringement lawsuit in some forum (about which the Panel would express no view as to the merits), but these circumstances do not present a clear case of cybersquatting.” However, the Panel actually dismissed the complaint on substantive grounds, therefore finding that the claim was within the scope of the UDRP. (As an aside, the facts in this case undercut any likelihood Complainant could ever bring a trademark infringement claim because it had already engaged in litigation in the Qatari Court of First Instance and lost at both the trial and appellate levels without alleging trademark infringement).

Finally, not all claims that raise possible out of scope issues are denied UDRP resolution. An interesting illustration because it is a Complainant only record is priceline.com LLC v. mark vicedomini / Priceline Motors, FA160500 1673408 (Forum June 6, 2016) (<priceline motors.com>) in which the Panel drew the ultimate inference of abusive registration, but felt in necessary to explain its analytical process because it could have been argued (had the Respondent appeared) that the domain name was acquired, not for a competing business or with the Complainant’s trademark in mind, but for an entirely different business than Complainant’s.

The Panel starts by admitting a degree of scepticism: “it is not immediately obvious that the Complaint makes out a case of domain name abuse”; and moves on to a cogent observation that “[e]ver ant’s contentions because it is not the Panel’s role to “be astute to search out arguments for a respondent which does not care to do so for itself.“present is the sense that Complainant simply does not like what Respondent is doing [offering a different kind of service]”; but she nevertheless accepts Complainant’s contentions because it is not the Panel’s role to “be astute to search out arguments for a respondent which does not care to do so for itself.”

Thus, in priceline.com “[after] consider[ing] whether it has a proper mandate to decide this matter” the Panel concluded it did even though “[t]he result might have been different with the benefit of a Response.” This final sentence should be underscored. If a respondent (it could be any respondent!) were as “astute [as the Panel in priceline.com] to search out [several possible] arguments [for using the domain name in a new business]” it would have appeared; and not appearing to argue its case means it can be inferred that it had no defense to the claim. Because PRICELINE is a well-known mark, and unlikely that Respondent could not have been aware of it, and because there is no business relationship and they are strangers, it is not a surprise that it is within the scope of the Policy, thus distinguishable from Healthgrades and Marketplace.