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Passive Holding of Domain Names and the Argument for Bad Faith or Forfeiture

There is a misconception among some trademark owners and their counsel that passive holding of domain names alone, Sandy Frank Film Syndication, Inc. v. Ralph Zita, FA1612001706714 (Forum February 14, 2017) (<youaskedforit.com>), or combined with lack of rights or legitimate interests, Harow v. Future Media Architects, Inc., D2017-0134 (WIPO March 6, 2017) (<harrow.com>), supports abusive registration. Thus,

1) Respondent’s inactive use of the disputed domain name demonstrates bad faith. Respondent also had actual knowledge of Complainant’s YOU ASKED FOR IT mark as Complainant has attempted to buy the domain from Respondent.

2) Complainant asserts that the anteriority of the first registration of [<harow.com>] to its trademark rights is irrelevant in light of Respondent’s failure to justify any right, use or legitimate interest before the filing of the trademarks. [Panel noted “Respondent is not making any use of the Disputed Domain Name at all.”]

Complainant in Harow also contended that Respondent registered the domain name in bad faith because it “renewed the Disputed Domain Name” after Complainant attempted “to amicably [but unsuccessfully] acquire the Disputed Domain Name.” However, renewal does not support forfeiture any more than does long-term non-use of a domain name. Neither theory satisfies the proof requirement for bad faith. The Complainant in Fusion Media Network, LLC v. paolo de luca, FA1702001717497 (Forum March 30, 2017) (<fusion.tv>) contended the domain name did not resolve to an active website, except that it did.

While trademarks can be lost through non-use, there is no comparable concept of abandonment with domain names; domain names can only be lost through lapse of registration. KION Material Handling GmbH v. Kion Printing Inc., D2017-0025 (WIPO February 24, 2017) (<kion.com>) in which the Panel “does not accept the Complainant’s assertion that the Respondent no longer exists” when its corporate registration is only suspended.

The supposed (but rashly misread) authority for these non-use arguments is Telstra Corporation Limited v. Nuclear Marshmallows, D2000-0003 (WIPO February 18, 2000) (<telstra.com>). In that case, the Panel reasoned that it “is possible, in certain circumstances [for] inactivity by the Respondent to amount to the domain name being used in bad faith.” However, the Panel carefully defined the limitations of those circumstances. So, for example, inactivity of a domain name that predates the trademark would not qualify.

Telstra only applies to trademarks that were distinctive at the time the domain name was registered; then (and only then) can bad faith be inferred. Forfeiture is warranted if “it is not possible to conceive of any plausible actual or contemplated active use of the domain name by the Respondent that would not be illegitimate.” Since in both Sandy Frank Film Syndication and Harow the domain names predated the existence of the trademark Telstra (which Complainants’ cited in urging bad faith) is not on point.

There is no law that compels registrants to actively use their domain names, although as noted in an earlier discussion, Trademarks and Domain Names Composed of Common Terms respondent has to offer a credible explanation. The governing principle is succinctly laid out by the Panel in Central Media S.C. v. Valentin Lotrean, D2016-2598 (WIPO February 20, 2017) (<centralmedia.com>):

The Complainant’s case on bad faith hinges on alleged “passive holding” but the Complainant completely misstates the concept. It does not mean, as the Complainant claims, that mere non-use of a domain name for a website is of itself somehow incriminating. Rather, the principle is that the lack of active use of a domain name does not as such prevent a finding of bad faith. In such circumstances, panels may draw inferences from circumstances which may nonetheless be indicative of bad faith such a complainant having a well-known trade mark, no response to a complaint having been filed and/or the registrant’s concealment of its identity.

For complainant to pass the Telstra test the trademark also has to be well-known when the domain name was registered (as explained in Central Media). The database is replete with domain names incorporating well-known trademarks; there is a daily profusion of them: <pfizer.site>, <clarksshoesonlinesale.com>, <tysoncareers.com>, <kraftheinzcompany-usa.com>, <surfacethsale.com> (a Microsoft trademark). Respondents don’t even bother showing up to argue a legitimate interest. For the strongest marks (arbitrary and fanciful), waiting makes no difference.

In L-com, Inc. v. Resolution Services / Resolution Services Ltd., FA1611001703364 (Forum December 21, 2016) (<lccom.com>) Complainant waited 12 years to initiate a UDRP proceeding. That passage of time has defeated even the most well-known niche trademarks composed of dictionary words (e.g. <economist.com>), but L-COM is stronger:

Although Complainant provides no evidence that justifies a 12 year delay in bringing this complaint and, further, no evidence of actual business disruption by Respondent using the disputed domain name, the similarity between the disputed domain name and Complainant’s registered trademark adequately demonstrates that this is not only possible but quite likely. (Emphasis added).

One final decision is noteworthy for the length of time between domain name registration and complaint, 13 years for <bbb.cc>, Augusta Benelux B.V. (?????????) v. Huangqingjia / dabuliu, DCC2017-0001 (WIPO March 7, 2017) (<bbb.cc>). The decision generated a good amount of Internet chatter because of the generic three-letter string but Complainant (a bicycle manufacturer) argued that the “‘.cc’ may be understood as an abbreviation for ‘cycling’” and the Panel agreed. Comments on Domain Name Wire: “I’ll give the panelist a little bit of relief since the domain owner didn’t respond, but the decision doesn’t make sense to me.”

It will have been noticed the extent to which Panels rely on inference rather than direct evidence in their holdings. In this last case, we might say the inference is drawn from weak evidence (challenging credibility that the country code “cc” Top Level Domain has come to mean cycling club). A different Panel may very as well have rejected this as too long a stretch. There are numerous businesses that could have claimed the triple B string. A too heavy reliance on weak inference undercuts the value of a decision. Telstra‘s true descendants are backed by strong inference, namely well-known marks internationally (or regionally where respondents reside in that jurisdiction) or of such a composition as to support a conclusion that any use of the domain name would be illegitimate.

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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And of course a domain doesn't need Todd Knarr  –  Apr 3, 2017 10:25 PM

And of course a domain doesn’t need to be used for any sort of Web site at all to be in active use for email, database servers, version-control repositories, SSH servers, VDI…

Absolutely correct, Mr. Knarr. I should have Gerald M. Levine  –  Apr 3, 2017 10:59 PM

Absolutely correct, Mr. Knarr. I should have included Imec International Stichting van Openbaar nut a/k/a Imec International v. IMEC Hosting, FA1702001716823 to establish that point. Thank you for pointing it out. Gmlevine

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