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Timing Is All: Cybersquatting or Mark Owner Overreaching?

Admittedly, timing is not altogether “all” since there’s a palette of factors that go into deciding unlawful registrations of domain names, and a decision as to whether a registrant is cybersquatting or a mark owner overreaching, is likely to include a number of them, but timing is nevertheless fundamental in determining the outcome. Was the mark in existence before the domain name was registered? Is complainant relying on an unregistered mark? What was complainant’s reputation when the domain name was registered? What proof does complainant have that registrant had knowledge of its mark? Simply to have a mark is not conclusive of a right to the domain name.

Owners of newly minted marks complaining of domain names registered long before is a classic example of overreaching. To have an actionable claim for cybersquatting, the mark must predate the domain name registration. Examples of this type of “mis-timing” appear with some regularity. This month we have Obero Inc. v. Domain Manager, eWeb Development Inc., D2016-2591 February 10, 2017) (<obero.com>) and Faster Faster, Inc. DBA Alta Motors v. Jeongho Yoon c/o AltaMart, FA1612001708272 (Forum February 6, 2017 (<altamotors.com>); last month there was UTILIBILL, Pty. Ltd. v. JOHN POWERS / 191 Chandler Rd, FA1611001705087 (Forum January 9, 2016).

The Anticybersquatting Consumer Protection Act (ACPA)—but not the UDRP—is explicit that the mark must be “distinctive at the time of the registration of the domain name.” In the majority of disputes filed for adjudication under the Uniform Domain Name Dispute Resolution Policy (UDRP), complainants prevail on the merits; not because respondents default (which they generally do) but because respondents have no defensible right or legitimate interest in the accused domain names and their registrations are clearly abusive. The daily roll call from WIPO and the Forum testify to this. Well-known trademarks incorporated into domain names is a common feature.

But default is not, in fact, a determinative factor of bad faith. Respondents can default and prevail as in Utilibill. With a single exception under UDRP (where a respondent is aware of an impending registration of a mark and anticipates it by registering the corresponding domain name, WIPO Overview 2.0 at paragraph 3.1) owners of trademarks and service marks acquired after domain name registrations have standing but no actionable claim against domain name holders. Stand is granted to test whether the facts support the exception, which is rare.

Paradoxical though it may sound, the factual situation may support two different aspects of timing. “Timing” is not just a matter of there being a “before and after.” How can this be? It can happen where complainant has priority in the sense that the mark existed before the registration of the domain name but its reputation (and hence respondent’s knowledge of the mark) comes after the registration.

Taking the simple issue of “priority” first, Complainants can compensate for weak marks by expanding their reputations. Parties’ close geographic proximity even of weak marks yields an inference of bad faith while marks in remote jurisdictions have to overcome respondent’s denial of knowledge. Reputation broadens as owners expand their markets but for marks to travel well complainants have to offer persuasive evidence consumers (and respondent) know who they are.

Lacking association of mark owner with any good or service is at the core of the decision in CIA. Industrial H. Carlos Schneider v. WHOIS Privacy Service Pty Ltd. / Domain Admin, Ashantiplc Limited, D2016-2167 (WIPO January 26, 2016) (<ciser.com>). This is a case in which the parties are domiciled in different jurisdictions:

Respondent does not dispute that Complainant, as of the time the disputed domain name was acquired by Respondent, possessed regional rights in the CISER trademark in South America and Mexico in connection with screws and nuts. However, Respondent considers that Complainant’s geographic expansion post-dates Respondent’s acquisition of the disputed domain name.

The three-member Panel agreed that these factual circumstances are controlling factors; Complainant falls on the second sense of “timing.”. It’s worth deconstructing the Panel’s thought process because its holding packages the timing of reputation with two other theories absolving Respondent of bad faith for registering a domain name identical to Complainant’s trademark, namely continental distance and weak mark. Respondent’s denial of knowledge was plausible because its registration predated Complainant’s expansion of market; the result would likely have been different had the domain name registration postdated the expansion.

Where mark owners have local reputations but none in respondents’ jurisdictions they cannot rest on their statutory rights. In the case of CIA Industrial, Complainant’s international reputation follows its geographic expansion. There’s a possible analogy here to situations in which complainants create new identifies by rebranding themselves.

Who has priority is generally straight forward although sometimes complicated by changes in the Whois directory. Successors, for example, are judged from the dates of their own registrations. Respondents gain no benefit from domain names earlier registered in good faith. There may be a factual question as to whether a current registrant is a successor or continuer in interest, and if the latter it must be based on and respondent have proof of an unbroken chain of ownership of the registration.

Unbroken chains are either true or false; the burden cannot be satisfied with anything less than direct evidence; this is respondent’s burden. In Groupe BMTC Inc. v. Domain Admin, Whois Privacy Corp. / Star Access, Inc., D2016-2610 (WIPO February 2, 2017) (<economax.com>) the “Complainant says there is no evidence to support the Respondent’s assertion that Domain Kingdom, as the registrant in May 2008, was an unregistered name used by the present registrant Star Access, Inc.” It contends that 1) “moving the disputed domain name between successive privacy services may constitute fresh registrations.; and 2) renewing registration after a mark has established itself in the marketplace is “held to be equivalent to a new registration for the purposes of registration in bad faith.”

The Panel in Groupe BMTC rejected the first contention citing WIPO Overview 2.0 at paragraph 3.7:

Panels have tended to the view that formal changes in registration data are not necessarily deemed to constitute a new registration where evidence clearly establishes an unbroken chain of underlying ownership by a single entity or within a genuine conglomerate, and it is clear that any change in WhoIs registrant data is not being made to conceal an underlying owner’s identity for the purpose of frustrating assessment of liability in relation to registration or use of the domain name.

The Panel found no “significance in the disputed domain name having been moved between privacy services or servers since May 19, 2008.”

On the second contention, the established consensus rejects renewal as “equivalent to a new registration.” Question as to whether the contents of the domain name amounts to trademark infringement may bring it into the jurisdiction of trademark law but it would fail to state a claim under the UDRP.

An instance of a broken chain (or lack of chain) is at the center of the decision in Nununu Baby Ltd. v. Noorinet, D2016-2398 (February 1, 2017) (). While the domain name was allegedly registered many years before the registration of the mark, “[the mark] has been used prior to the registration of the disputed domain name and well before the disputed domain name was transferred to the Respondent.” There is no other explanation about the transfer but presumably respondent was not the original registrant and offered no explanation as to its relationship with the transferor.

Finally, timing is a factor in contentions of common law rights. Priority must be proved. I’ll return to common law rights is a later essay but Faster Faster is worth contemplating. While the domain name was registered in 2003 the Complainant alleges it “has also developed substantial goodwill and common law rights in the ALTA MOTORS mark dating from 2016,” which is an absurd statement coming from legal counsel and a far cry from proving common law rights. The important point to note in these cases (excepting Nununu) is that complainants and their representatives are basing their claims on false notions of rights and bad faith. Only if the planets are in alignment do parties prevail.

Now, I don’t want to leave the impression that complainants lose often. The norm is that complainants prevail 85% to 90% of the time, most usually on default (but not always) against respondents with no defensible positions. The cases are nevertheless instructive of factual circumstances complainants should have an appreciation for before they file their complaints.

By Gerald M. Levine, Intellectual Property, Arbitrator/Mediator at Levine Samuel LLP

Information about the firm can be found on the Firm’s website at iplegalcorner.com. Mr. Levine has a litigation and counseling practice representing clients in Intellectual Property rights and management, Internet and Cyberspace issues, domain names and cybersquatting, as well as a diverse range of legal and business matters from working with client to resolve commercial disputes, to copyright and trademark counseling and registrations. He is the author of a treatise on Trademarks, Domain Names, and Cybersquatting, Domain Name Arbitration: A Practical Guide to Asserting and Defending Claims of Cybersquatting Under the Uniform Domain Name Dispute Resolution Policy. A Second Edition of the treatise was published July 2019 and is available from Amazon or from the publisher, Legal Corner Press (LCP). For inquiries to LCP write to .(JavaScript must be enabled to view this email address) or Mr. Levine at .(JavaScript must be enabled to view this email address).

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