The integrity of any legal system depends on the quality of mind of those appointed to administer it. There are expectations that the one judging the facts and applying the law knows what the facts are and what law to apply. Panels appointed to adjudicate disputes under the Uniform Domain Name Dispute Resolution Policy (UDRP) are not held to any lower standard than the judges of courts of competent jurisdiction. They are expected to be neutral and competent. An overall assessment of the decisions from UDRP Panels is that it works well and the decisions are fair.

But, from time to time, there are decisions so clearly wrong they demand another look, but the UDRP has no in-house mechanism for appeal. Respondents who have the means have taken their grievances to U.S. district courts under the Anticybersquatting Consumer Protection Act (ACPA) (where there is jurisdiction) and complainants have learned the hard way the cost of overreaching their rights. (If any readers have information about “appeals” to other national courts I would like to hear from you). (Respondents also learn the costs when they defend against UDRP complaints wrongfully dismissed).

Unfortunately, not all respondents in UDRP disputes have the resources to “appeal.” Such a one (I suspect) will be the Respondent in T & P Holding Company, LLC v. Wendy Webbe and Ancient Holdings, LLC, FA1802001773041 (Forum April 6,2018) (<youareok.com>). This is a case so wrongly decided that it has to be discussed and error explained. The Panel is a long-term veteran on the Forum roster of panelists. He has denied a good number of complaints, so he has weighed the difference between “predators and parasites” and “innocent and good faith registrants.” These are the bookends the World Intellectual Property Organization wrote into its Final Report (April 1999). What went wrong in this case?

First of all, what is the error? The facts as the Panel recites them are 1) Respondent defaulted, 2) Complainant owns an unregistered trademark for YOU ARE OK that dates from 2010, and 3) the domain name does not resolve to an active website. For the Panel item, 3 is the significant factor. However, a significant fact the Panel does not recite is the creation date of the domain name: 2009-01-01 (which he must have known because it is standard practice to include the WhoIs information as an Annex to the Complaint).

Paragraph 4(a)(i) requires complainant to prove it has a right. This is easy with registered marks because complainant simply has to attach a copy of the registration to the Annex but not so easy with an unregistered mark which has to be evidenced by some other form of documentary proof. Standing to maintain a UDRP proceeding depends on proof that the mark was used in commerce earlier than the registration of the domain name.

The analysis in CSP International Fashion Group S.p.A. v. Domain Administrator, NameFind LLC, D2018-0163 (WIPO March 13, 2018) (claiming cybersquatting for the common expression,<myboutique.com>) gives a good account of the requirement:

Before the Complainant can claim unregistered or trademark status in “myboutique”, it must therefore demonstrate that it has acquired secondary meaning. That in turn requires the Complainant to prove that the term “myboutique”, in the context, distinctively identifies primarily the Complainant with the goods or services it supplies. The consensus view of UDRP panels as to the sort of evidence required in order to establish unregistered or common law rights is described in WIPO Overview 3.0 at section 1.3 as including “a range of factors such as (i) the duration and nature of use of the mark, (ii) the amount of sales under the mark, (iii) the nature and extent of advertising using the mark, (iv) the degree of actual public (e.g., consumer, industry, media) recognition, and (v) consumer surveys”.

The Panel in CSP International found Complainant did not have standing since it had no market presence until after the registration of the domain name. Timing is a critical factor. An earlier registered domain name in the .it space is not evidence of a trademark.

Notwithstanding the clearly applicable law, and without substantive proof (there is, after all, an evidentiary standard!) the Panel in T & P Holding the Panel found Complainant had standing because it:

provides screenshots of its website and social media posts indicating it uses the mark. See Compl. Ex. 2. Complainant does not provide other evidence to support its claim of common law rights. The Panel finds Complainant’s contentions to be sufficient, and concludes that Complainant has established common law rights per Policy ¶ 4(a)(i) by showing the YOU ARE OK mark has taken on a secondary meaning in association with Complainant’s business. (Emphasis added).

Let us assume the unregistered mark predated the registration of the domain name: in that event it is not unusual for Panels to give complainants the benefit of the doubt, leaving the issues under the second and third limbs of the Policy to be decided by the facts in the case. In T & P Holding, Respondent defaulted. Silence is generally sufficient to support complainants’ prima facie showing that respondents lack rights or legitimate interests in the domain names. Thus, not surprising that Complainant succeeded on the second limb.

However, the question for the third limb is whether Respondent was “an innocent or good faith registrant” or a “predator and parasite”? The Panel obviously concluded that Respondent was a predator and parasite and awarded the domain name to Complainant. The problem is that it is impossible for Respondent not to have been an innocent and good faith registrant because the domain name predated the earliest date of the unregistered mark. See WIPO Overview 3.0, Paragraph 3.8.1:

where a respondent registers a domain name before the complainant’s trademark rights accrue, panels will not normally find bad faith on the part of the respondent.

WIPO Overview 2.0 (not so much superseded, but earlier) went further. It correctly explains the reason “panels will not normally find bad faith,” but why the explanation is omitted in 3.0 is a mystery:

the registration of the domain name would not have been in bad faith because the registrant could not have contemplated the complainant’s then non-existent right. (Emphasis added).

In support of bad faith, Complainant cited and the Panel accepted Marss Supermarkets Company, LLC, formerly known as Marsh Supermarkets, Inc. v. Choi Sungyeon, FA1312001532854 (Forum Feb. 25, 2014) (<marshsupermarkets>). It is neither germane nor dispositive on the issue of bad faith for two reasons: 1) Complainant owned a registered mark registered decades before the domain name and 2) the second level domain combined the mark with a term that identified Complainant’s business, namely “marsh” and “supermarkets.”

For these reasons alone, the Panel’s holding of bad faith in T & P Holding is absurd:

Per Policy ¶ 4(a)(iii), Complainant argues Respondent’s failure to make an active use of the <youareok.com> domain name indicates it was registered in bad faith. Respondents who make no active use of a domain name have been found to have registered and used said domain name in bad faith under Policy ¶ 4(a)(iii) [citing Marsh]... Here, Complainant avers Respondent’s domain name resolves only to an “under construction” page. See Compl. Ex. 4. Consequently, the Panel finds Respondent’s inactive holding of the domain name is in bad faith per Policy ¶ 4(a)(iii).

If a newly minted attorney had cited Marsh for the proposition that a domain name holder was a predator and parasite because the domain name did not resolve to an active website he would be laughed out of court. That a seasoned Panel accepted the Marsh citation as support for the proposition that <youareok.com> infringes a later unregistered mark so totally undermines UDRP law as to call into question whether the Panel actually read the papers and annex and thought about the factors that should have been applied.

T & P Holding is a case that should be “appealed” but the only present route is to a court of competent jurisdiction, and that is costly to the point of being prohibitive. A Working Group on ICANN’s rights protection mechanisms for all gTLDs (currently deliberating whether any changes should be recommended) should give some thought to an appeal process in-house to allow for a reconsideration before a new Panel.