The courts of the United Kingdom have set themselves outside the mainstream of Internet consensus policies on trademark/domain name disputes. A U.K. court decision regarding the UDRP reflects an unfortunate tendency to overlook one of the fundamental principles of the UDRP, namely the opportunity to seek independent resolution of a trademark/domain name dispute by court proceedings.

In YoYo.email Limited and the Royal Bank of Scotland Group PLC (Neutral Citation Number: [2015] EWHC 3509 (Ch) Case No: HC-2015-000379) the High Court of Justice held that “a proper construction of the UDRP clause [providing for independent court resolution of a controversy that is the subject of a UDRP proceeding] does not give rise to a separate cause of action in favour of the [registrant that is the losing party in that proceeding].”

Under the UDRP Policy and Rules, a UDRP panel had found that YoYo.email Limited (“YoYo”) registered and was using domain names in bad faith. The panel then transferred the names to Royal Bank of Scotland Group PLC (“Bank”). YoYo filed an action asking the High Court for declaratory relief reversing the UDRP decision. YoYo argued that clause 4(k) of the UDRP Policy required a review:

“k. Availability of Court Proceedings. The mandatory administrative proceeding requirements set forth in Paragraph 4 shall not prevent you or the complainant from submitting the dispute to a court of competent jurisdiction for independent resolution before such mandatory administrative proceeding is commenced or after such proceeding is concluded…”

The Court disagreed. Quoting a previous High Court decision, the Court commented:

”... it is trite law that an agreement cannot confer a jurisdiction on the court which it does not otherwise have. Under the [UDRP] the Registrar will abide by a judicial decision, but the function of this Court is not as a judicial review or appellate body. The claimant must demonstrate some independent right of action justiciable in this Court. Thus if a complaint is dismissed, the complainant may refer the case to the Court for an order that its trade mark has been infringed. If, on the other hand, the complaint is upheld, the burden is not on the complainant to establish infringement. It is for the registrant to plead and prove a cause of action giving him an interest in retaining the domain name. An unsuccessful registrant therefore faces considerable difficulty in identifying a cause of action upon which the Panel’s decision can be challenged…”

It is ironic that YoYo would have had its opportunity for judicial review if it had brought an action in the United States, in particular in Arizona, the state where its registrar is located. U.S. courts have routinely reviewed UDRP panel decisions, relying on the UDRP Rules and the Anticybersquatting Consumer Protection Act (“ACPA”) that amended the Lanham Act in 1999.

In the YoYo case the Bank had counterclaimed for passing off (alleging that YoYo misrepresented its services as coming from Bank) and infringement of Bank’s trademarks. The Court granted summary judgment to Bank on that part of the counterclaim founded on passing off. This could have concluded the matter, but the Court said “Counsel are agreed that if I come to the conclusion that [the Bank is] entitled to succeed on their application for summary judgment on the counterclaim for passing off then [YoYo’s] prayer for declaratory relief in the Claim would be rendered otiose, with the possible exception of sub-paragraphs 1(e) and (f), namely that ‘(e) [YoYo] did not register the domain names in bad faith; and (f) [YoYo] has not used and is not using the domain names in bad faith.’... ” The Court also said “... there is no practical utility in granting declaratory relief in this case ... because the UDRP scheme has dealt with the issue between the parties, because any declaration made by this Court could not alter the findings of the Panel and the effect of my conclusions on the application for summary judgment on the counterclaim render the claim otiose.” Even if the Court had not granted summary judgment on the Bank’s counterclaim, it appears that YoYo still would not have had an opportunity for judicial review of the UDRP panel decision.

The unwillingness of U.K. courts to review UDRP decisions is a serious problem for domain name registrants. They are denied the opportunity for independent resolution by court proceedings as provided in clause 4(k) of the UDRP Policy. A finding of bad faith is an essential element of a decision against a domain name holder, but the U.K. stance makes this finding unreviewable. In the adjudication of trademark/domain name infringement cases, bad faith became one of the deciding factors in 1999 when the UDRP was adopted by ICANN and (in the United States) when the Lanham Act was amended by the ACPA. The element of bad faith was made determinative because traditional tests of infringement were inadequate to deal with the problem of cybersquatters.

In the 1998 White Paper that called for the creation of ICANN, the U.S. Department of Commerce made it clear that a procedure for the protection of trademark rights was an essential element of its plans for the new system of technical administration of the domain name system. The Department called upon the World Intellectual Property Organization (WIPO) to “develop recommendations for a uniform approach to resolving trademark/domain name disputes involving cyberpiracy…”

WIPO, in its Reports on the establishment of the UDRP, recognized that neither ICANN nor WIPO has the power to create law. Conscious of this limitation, the Final Report of the WIPO Internet Domain Name Process included the following recommendations:

“140. It is recommended that any dispute-resolution system, which is alternative to litigation and to which domain name applicants are required to submit, should not deny the parties to the dispute access to court litigation.

...

147. It is recommended that the domain name applicant be required, in the domain name registration agreement, to submit, without prejudice to other potentially applicable jurisdictions, to the jurisdiction of the courts of:

(i) the country of domicile of the domain name applicant; and
(ii) the country where the registrar is located.”

Notwithstanding the intent of WIPO, the U.K. Court in the YoYo case treated the UDRP as if it were an arbitration procedure, denying YoYo access to court litigation on the issue of bad faith.

In theory, the UDRP could have been drafted as an arbitration procedure such that panel decisions would normally be binding and non-appealable. If WIPO had developed the UDRP as mandatory arbitration, it would have been tantamount to the creation of a novel and globally applicable cause of action for the determination of trademark/domain name disputes—in other words, the creation of international law. In providing for access to court litigation, WIPO took the correct course of action.

The U.K. Court in the YoYo case ignored the background of the UDRP and ignored its rationale as a non-arbitration procedure. The Court conceded that YoYo faced “considerable difficulty in identifying a cause of action” to review the panel decision. It would advance the cause of a consensus-based globally effective policy to deal with cybersquatters if such a cause of action were to be identified or created.