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The Rise and Fall of the UDRP Theory of ‘Retroactive Bad Faith’

Since its establishment in 1999, the Uniform Domain Name Dispute Resolution Policy has required complainants to prove inter alia, “bad faith registration”. In practice, this has meant that where a domain name was registered before a trademark came into existence, that “bad faith registration” would be considered chronologically impossible.

This logical approach was succinctly explained by Panelist Paul M. DeCicco in Riveron Consulting, L.P. v. Stanley Pace, NAF Claim Number: FA1002001309793:

The undisputed facts in this matter foreclose a finding of bad faith registration and use under Policy 4(a)(iii). While Complainant currently has trademark rights in the at-issue mark by virtue of its RIVERON trademark registration, such rights do not magically relate back to the time that Respondent first registered the <riveron.com> domain name, a time well prior to Complainant’s first use of its mark. (emphasis added)

Nevertheless, despite what is assumed to be a general reluctance to employ magic amongst UDRP panelists, a handful of panelists nevertheless have apparently tried their hand at alchemy. Beginning in 2009, a single panelist took a shot at finding ‘bad faith registration’, even when a domain name had been registered before a trademark came into existence. On July 3, 2009, writing as the sole Panelist in City Views Limited v. Moniker Privacy Services / Xander, Jeduyu, ALGEBRALIVE, WIPO Case No. D2009-0643 (Mummygold.com), M. Scott Donahey, claimed to have discovered that over the course of the preceding 10 years, UDRP panelists “seem[ed] to have largely overlooked the language of the Policy regarding the respondent’s representations and warranties”, which he claimed, “negates the temporal distinction suggested by 4(a)(iii) of the Policy (“has been registered . . . in bad faith”). He pointed to Section 2 of the Policy, entitled “Your Representations,” which provides that, “[Y]ou will not knowingly use the domain name in violation of any applicable laws or regulations.” Accordingly, Mr. Donahey claimed to have found a way to time travel by employing legal gymnastics to deviate from the longstanding approach of requiring bad faith to exist at the time of registration, which in turn required the existence of a complainant’s trademark at the time of registration. He called this “retroactive bad faith”.

But alas, the facts of the Mummygold.com case did not allow him to order the transfer. Nevertheless, just over a month later, on August 19, 2009, the opportunity arose. Writing again as the sole Panelist, M. Scott Donahey, in Octogen Pharmacal Company, Inc. v. Domains By Proxy, Inc. / Rich Sanders and Octogen e-Solutions, WIPO Case No. D2009-0786 (Octogen.com), again employed his “retroactive bad faith” approach. He stated that, “a party can register or acquire a domain name in good faith, yet use the domain name in the future in such a way that the representations and warranties that the registrant made as of the time of registration are violated”, thereby enabling a finding of “deemed retroactive bad faith registration”. This time, he did order the transfer of the domain, as he found that even though the domain name had been registered in good faith two years before the corresponding trademark, the domain name registrant’s subsequent bad faith use turned the good faith registration into bad faith, on the basis of his ‘theory of retroactivity’.

The Octogen and MummyGold decisions were cited several months later by Phillip Securities Pte Ltd v. Yue Hoong Leong, ADNDRC Decision DE-0900226, Denver Newspaper Agency v. Jobing.com LLC, NAF Claim No. 1282148 (a decision that did not turn on the Octogen/MummyGold reasoning); Ville de Paris v. Jeff Walter, WIPO Case No. D2009-1278 (overturned in court), and Country Inns & Suites By Carlson, Inc. v. Shuai Nian Qing, La Duzi, WIPO Case No. D2009-1313 (where the sole panelist used the Octogen/MummyGold reasoning to find that “intent” at the time of registration was no longer required).

On March 1, 2010, a decision was rendered that simultaneously rejected the new theory while refashioning it. Sole Panelist Richard Lyon, in Eastman Sporto Group LLC v. Jim and Kenny (Sporto.com), WIPO Case No. D2009-1688 discussed the Octogen/MummyGold reasoning and rejected its approach, recognizing that it subverted “well-settled precedent”, and holding that “unless bad faith use subsequently to registration forms a basis for an inference of Respondent’s bad faith at the time of registration, it cannot alone satisfy the complainant’s burden of proof under paragraph 4(a)(iii) of the Policy”.

Nevertheless, Panelist Lyon then attempted to conjure up his own solution to overcome the obviously incorrect interpretation of the Policy espoused by the Octogen/MummyGold reasoning in order to find ‘retroactive bad faith’ through the back door. He devised an approach where, even if a domain name was registered in good faith, its date of renewal will be “the date on which to measure whether the disputed domain name was registered and used in bad faith”. If there were bad faith use following a renewal, according to Panelist Lyon, that would enable a trademark owner to take away a domain name that had originally been registered in good faith. This marked another clear departure from well-established precedent since a renewal had never previously been treated as a “new registration” under the UDRP.

For unknown reasons, the WIPO Overview 2.0, released in 2011, which purports to distill the consensus views of panelists to promote uniformity in the application of the Policy, saw fit to include the Octogen, Mummygold, and Sporto decisions, despite them clearly representing radical departures from more than a decade of well-established precedent. WIPO’s inclusion of these cases, which it characterized as “a developing area of UDRP jurisprudence”, implicitly legitimized these outlier theories and thereby encouraged complainants and panelists to adopt “retroactive bad faith” despite it running contrary to the well-established interpretation of the UDRP and despite the ostensible purpose of the Overview, which was to set out “consensus views” rather than promulgate outlier and novel theories.

The inclusion of these radical approaches unfortunately encouraged a record number of abusive UDRP complaints to be launched which harnessed theories of retroactive bad faith. A review of the RDNH decisions posted at www.RDNH.com shows that complainants, relying on WIPO’s inclusion of a “retroactive bad faith” cases in the Overview, filed a spate of complaints in which the domain registration obviously predated the complainant’s trademark rights, or otherwise provided no evidence of bad faith registration. This proved to be extraordinarily problematic, as respondent after respondent had to spend considerable time and expense arguing that the long-established approach should continue to apply. Many innocent domain name registrants were thereby faced with the prospect of losing their long-registered domain names to new-comer trademark claimants, and had to defend against these misguided and meritless complaints.

The legitimatization of the minority and outlying ‘retroactive bad faith’ theory in the WIPO Overview 2.0 had other unfortunate consequences, as certain panelists believed themselves constrained from making an RDNH finding against complainants who concocted cases where their trademark rights obviously post-dated the domain name that they were trying to hijack, because WIPO Overview 2.0 had lent legitimacy to the theory of retroactivity. In this way as well, WIPO Overview 2.0 undermined the integrity of the UDRP.

The majority of panelists presented with complaints relying on the “retroactive bad faith” approach championed in Mummygold/Octagen, or the different variation adopted in Sporto.com, analyzed the reasoning that supported these interpretations and found it fell short.

The unanimous three-person panel in Side by Side, Inc. /dba/ Sidetrack v. Alexander Lerman, WIPO Case No. D2012-0771, observed that the Panel in Mile, Inc. v. Michael Burg, WIPO Case No. D2010-2011, confirmed that the outlier “retroactive bad faith” theory (referred to as “Mummygold/Octogen reasoning”) had not developed into a consensus view:

“If a consensus developed that a line of prior decisions had reached the wrong result, and if panels generally adopted a new approach on an issue, this Panel also would be open to considering whether a new approach was appropriate, both substantively under the Policy and in order to promote consistency. However, the Mummygold/Octogen reasoning has not prompted any such consensus; to the contrary, a number of decisions have expressly considered and rejected it.

The fact that so many panelists have declined to follow the Mummygold / Octogen approach argues against an emerging consensus to overturn a long-established doctrine and provides yet another reason for this Panel to decline to adopt the Mummygold / Octogen reasoning.”

In fact, the actual “consensus view” amongst panelists, and their overwhelming rejection of the Mummygold/Octagen reasoning, was well described in Michael Jastremski v. Jaisen Mathai, WIPO, Case No. DME2014-0006, where Panelist W. Scott Blackmer stated that the concept of retroactive bad faith “rests uneasily” with the Policy’s requirement and the consensus view since the Policy was implemented in 1999 has been that the conjunctive ‘and’ indicates that there must be bad faith both at the time of registration and subsequently”. Mr. Blackmer went on to state in this 2014 decision that, “it does not appear that Octogen represents a consensus view of WIPO panels”.

As of April 26, 2016, Richard Lyon, the author of the Sporto case, supra—one of the decisions wrongly cited as precedent in the Overview 2.0 for the “developing area of UDRP jurisprudence”—apparently recanted his position, as stated in the unanimous 3-member decision in Coolside Limited v. Get On The Web Limited, WIPO Case No. D2016-0335 (TRTL.COM):

“A small minority of UDRP panelists has in the past attempted to construe subsequent bad faith use of a domain name as reflecting back to bad faith registration, notwithstanding no evidence of any bad faith actually operating at the date of registration. This Panel does not adhere to that theory. The UDRP policy is clear in requiring that a complainant must show both that the domain name was registered in bad faith and that it is being used in bad faith”.

Not only did the panel in TRTL.com find that “retroactive bad faith” was limited to a “small minority” of UDRP panelists “in the past”, the panel in TRTL.com also found that relying on such as approach at the present time amounted to an abuse of the Policy, and so rendered a finding of Reverse Domain Name Hijacking against the complainant.

On November 21, 2016, the Panel in the case of TOBAM v. M. Thestrup / Best Identit, WIPO Case No. D2016-1990, made the following conclusive finding regarding the mere “handful of UDRP cases around 2009-2010” which did not follow the widely accepted view:

“It is not in dispute that the relevant registered trademarks post-date registration of the disputed domain name in 2004. Likewise, Complainant’s unregistered rights; Complainant was only incorporated in 2005 and it only started trading in 2008.


While there are a handful of UDRP cases around 2009-2010, including those cited by Complainant, which considered alternative approaches based on the warranty in paragraph 2 of the UDRP and the wording of paragraph 4(b), amongst other things, the overwhelming approach of UDRP panels since then has been to affirm the literal meaning of paragraph 4(a)(iii) of the Policy and to require bad faith at the time of registration or acquisition of the disputed domain name.[1]

This Panel agrees and considers that lack of registration in bad faith is fatal to the case. In those circumstances, Respondent’s reason for registering the disputed domain name is irrelevant. Whatever its motive, Respondent could not have set out to target the then non-existent rights of Complainant.”

Subsequently on January 6, 2017, the Panelist in Webster Financial Corporation v. Domain Manager / Affordable Webhosting, Inc., Advertising, NAF Claim Number: FA1612001705353; again confirmed the actual consensus view, and stated that “these facts permit no other conclusion than that Respondent could not have registered [the Domain Name] in bad faith…” since Respondent registered the Domain Name before Complainant introduced the mark to commerce. The Panelist went on to state, that; “this has long been the consensus judgment of UDRP panelists” [Emphasis added].

Finally, on March 28, 2017, a unanimous three-person UDRP Panel may have finally hammered the well-deserved last nail into the ‘retroactive bad faith’ coffin. In Group One Holdings Pte Ltd v. Steven Hafto, WIPO Case No. D2017-0183, Presiding Panelist Wilson Pinheiro Jabur found on behalf of co-Panelists M. Scott Donahey and Adam Taylor that the Complainant, a Singaporean company, brought the UDRP Complaint in bad faith, and quoted approvingly from TOBAM, supra:

While there are a handful of UDRP cases around 2009-2010, including those cited by the Complainant, which considered alternative approaches based on the warranty in paragraph 2 of the UDRP and the wording of paragraph 4(b), amongst other things, the overwhelming approach of UDRP panels since then has been to affirm the literal meaning of paragraph 4(a)(iii) of the Policy and to require bad faith at the time of registration or acquisition of the disputed domain name.

Accordingly, we now have a three-person Panel which conclusively rejected the outlying view and confirmed the actual consensus view. And remarkably, M. Scott Donahey was a member of this Panel. M. Scott Donahey was of course, the originator of the Octagen/Mummygold reasoning, and it now appears he has recognized that it has not caught on. Combined with the Panelist Lyon’s rejection of the Octogen/Mummygold approach in TRTL.COM, supra, it now appears that the two leading purveyors of this outlying view have finally come around to acknowledging that it has never and does not form the basis for proper interpretation of the UDRP.

With WIPO about to release Overview 3.0, the Internet Commerce Association is hopeful that it will recognize that the “retroactive bad faith” theories, including both the Octogen/Mummygold approach or the Sporto.com approaches, can now be finally put to rest, and that this forthcoming version of the Overview will adopt higher standards so as not to include outlier cases that undermine the presentation of a true ‘consensus view’. Going forward, our hope is that the UDRP will be interpreted in the manner that it was originally intended; namely that a finding of bad faith registration requires that there be some targeting of a trademark at the time of initial registration, and that all claims of trademark infringement involving trademarks that came into existence after the initial registration of a corresponding domain name are best left to the courts, where they rightfully belong.

[1] See, e.g., Coolside Limited v. Get On The Web Limited, WIPO Case No. D2016-0335, Centroamerica Comercial, Sociedad Anonima de Capital Variable (CAMCO) v. Michael Mann, WIPO Case No. D2016-1709, New Forests Asset Management Pty Limited v. Kerry Schorsch, Global Advertizing, LLC, WIPO Case No. D2015-1415, Dreamlines GmbH v. Darshinee Naidu / World News Inc, WIPO Case No. D2016-0111, Lonza AG v. Onyx Networks, Inc., WIPO Case No. D2015-1460, Movius Interactive Corporation v. Dynamo.com, WIPO Case No. D2015-1717 and Intellect Design Arena Limited v. Moniker Privacy Services / David Wieland, iEstates.com, LLC, WIPO Case No. D2016-1349.

By Internet Commerce Association, Non-Profit Trade Organization Representing Domain Name Owners

Founded in 2006, the Internet Commerce Association (ICA) is a non-profit trade organization representing domain name investors, website developers and related companies.

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