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Credibility and Disbelievablity as it Affects Outcomes in UDRP Proceedings

“Credibility” in English comes through Middle French from a Latin word signifying trustworthiness and reliability in business and personal transactions (allegations, contentions, statements, promises, etc.). Where the goal is persuasion, exaggerating, embellishing, withholding, and falsifying evidence or accusing the adverse party of some heinous crime is not a winning strategy for proving claims or defenses. This is as true under the Uniform Domain Name Dispute Resolution Policy (UDRP) as any other legal forum. Certification of “complete[ness]” and “accura[cy]” is built into the UDRP Rules, 3(b)(xiv) (for complainant) and 5(b)(viii) (for respondent). The Rule demands (in the ritual formula before interrogation) that parties tell “the truth, the whole truth, and nothing but the truth.” To be credible, to sell an argument or to defend a lawful registration can be a challenging exercise.

In weighing credibility, though, Panels must be careful not to disbelieve parties for the wrong reasons, although occasionally they do as with <ado.com> award vacated by agreement in an ACPA action (discussed in earlier essays). There is also the <imi.com> case presently on cross-motions for summary judgment in federal court (also discussed in earlier essays). Most often, incredibility results from the unbridgeable gulf between fact and fiction. In literature, this is referred to as the unreliable narrator syndrome. The speaker wants to convince listeners that his or her version of the facts are reliable, but the narrative is unbelievable for reasons that can be objectively identified. In legal terms, the unbridgeable gulf is between naked allegations and lack of proof of the existence of alleged facts.

I will focus on four recent decisions for illustrating the range of objective assessments, two each of complainants and respondents: Dialoga Servicios Interactivos, S.A. v. Finlead AG, D2018-2768 (WIPO February 8, 2019) (<dialoga.com>) and AMUNDI PIONEER ASSET MANAGEMENT USA, INC. v. John Hrusovszky, / Gold Rush Hosting Solutions, LLC, FA1811001815000 (Forum January 7, 2019) (<pioneerinvestments>) for complainants; and Toner Connect, L.L.C. v. Privacy Protect, LLC / Realogue Corporation, D2018-2829 (WIPO February 21, 2019) (<tonerconnect.com>) and Mobile Hi-Tech Wheels v. Derek Baumeister / Lni Enterprises, FA1901001826655 (Forum March 5, 2019) (<fuelwheel outlet.com>) for respondents. All of these cases turn on credibility objectively assessed.

As the level of plausibility for the existence of fact rises, disbelievability becomes increasingly subjective, for which there are no objective standards. Subjectivity is the realm of the self. An interesting illustration of this is another recent decision by a divided three-member Panel. I will argue that the majority stepped into error by disbelieving testimony submitted under oath and extending a principle of law intended for one set of circumstances (well-known and famous marks) to another set for which the principle was never intended to apply (generic terms). Subjective disbelievability is illustrated in Rosetta Stone Ltd. v. Digital Privacy Corporation / Stuart Thomas, D2018-2322 (WIPO February 27, 2019).

Objective is distinguished from subjective by being measured by criteria outside the self. The three-member Panel in Dialoga was unimpressed by Complainant’s contentions and its offer of proof because, among other things, it failed “to produce all of its correspondence with the Respondent. The principal submission in the Complainant’s case on bad faith was that the Respondent’s primary purpose in registering the disputed domain name was to sell it to the Complainant. In these circumstances, the evidence of the Parties’ interactions was material to the outcome of the case.” It also failed to address “the dictionary word nature of the disputed domain name.”

The same failures of credibility (but on different grounds) undercut complainants’ contentions in Amundi Pioneer Asset Management. The Panel is careful to frame the objective reasons for its decision. Complainant challenged <mypioneer investments.com> for allegedly squatting on its PIONEER INVESTMENTS mark. The Complainant asserted its mark was well-known or famous which the Panel rejected:

Cases that have imputed a bad faith intent from the use of domain name similar to a famous mark tend to involve marks of considerable notoriety, notoriety to a level such that it is not credible for a respondent to deny knowledge, such as CITIBANK, WAL-MART, and LEGO.

The objectivity is measuring PIONEER INVESTMENTS against truly famous marks. But, in this case,

Complainant’s operations must be viewed in context of the worldwide market for financial services, which the Panel believes is of such a size and extent that even the numbers demonstrated by Complainant do not establish a level of notoriety such that it would be incredible for Respondent to deny knowledge of Complainant and Complainant’s Mark. As such, the Panel believes an inference of bad faith against Respondent is not justified in this case.

Owners of dictionary-word marks such as “dialoga” and “karma” (another recent case) and un-inventive combinations like “pilot” and “fitness” or “fair” and “markets” rarely have the evidence for cybersquatting, although even weak marks (unimaginative word combinations that are essentially common expressions or descriptive phrases) can be infringed if the proof establishes targeting; example, Toner Connect (“toner” and “connect” in the .com space: “Respondent’s sole owner and president is a direct competitor of Complainant.”) For combinations of words or letters plus words, much depends on the inventiveness of the combination, such as (to take another example) FBOMB (a clothing retailer).

In Toner the facts supported (what Respondent failed to admit) that he was the principal of a competing company. To succeed on these facts, any explanation would have to demonstrate a “right or legitimate interest” in the domain name notwithstanding the evidence to the contrary. This is also true of the Respondent in Mobile Hi0Tech Wheels who alleged it was an authorized dealer but offered no evidence that it was. The Panel found its proof fell short of its allegations:

Held up against Complainant’s repeated and clear statements that “Respondent is not an authorized dealer of Complainant” and that “Respondent appears to be engaged in ? fraudulent business activity in order to drive business away from Complainant’s authorized distributors”, this Panel finds, by a preponderance of the evidence, that the Respondent’s claim of authority is lacking in substance and credibility. (Emphasis added)

A party who alleges to have a relationship (formal or otherwise under the Oki Data test) would be expected to prove it with credible evidence, of which Respondent in Wheels had none to offer.

The demand for granular evidence rises as the mark descends to its generic base. Claims involving well-known and famous marks, particularly of brands selling goods or offering services in national or international markets (which constitute 90% or more of filed cases), rarely fail. But as marks lose their power as brand indicators, when they could just as well be Internet addresses or trade names or even trademarks in distinctly other commercial fields, they rarely succeed. This does not mean these marks are less distinctive in a trademark sense, but on the Internet, they are seen as non-distinctive when functioning as addresses; in essence, they return to their pristine nature of genericness; thus, available for lawful use by others.

Where the objective is defined by standards; subjective is defined by what the trier wills to believe. Just as “Pioneer Investments” is hardly an inventive phrase, neither is “Rosetta Stone.” To claim that a generic expression is infringing a statutory right is tantamount to claiming a monopoly on it. The court in Entrepreneur Media, Inc. v. Smith, 279 F.3d 1135, 1147 (9th Cir. 2002) held that “[a]lthough EMI has the exclusive right to use the trademark ‘ENTREPRENEUR’ to identify the products described in its registration, trademark law does not allow EMI to appropriate the word ‘entrepreneur’ for its exclusive use. The descriptive nature and common, necessary uses of the word ‘entrepreneur’ require that courts exercise caution in extending the scope of protection to which the mark is entitled.”

The result should have been no different in Rosetta Stone. The majority over a vigorous dissenting opinion ordered <rosettastone.app> transferred to Complainant. Rosetta Stone has been used as an indicator of source by a diverse number of businesses over the years. Even assuming a party may have an international reputation which arguably raises its profile, having a well-known brand does not give a mark owner monopoly rights over a generic phrase. Thus, the transfer raises philosophical and legal questions of the Policy’s scope.

The majority found in Complainant’s favor by disregarding proof of non-infringing planned and prospective use by a Respondent in the niche scuba diving business. (The complainant is in the niche language business). It is worth a moments reflection to consider “why” the majority reasoned itself to the wrong conclusion. The decision has been criticized for some of the reasons I argued in an earlier essay (cited, incidentally, by the dissenting Panelist) Dictionary Words Alone or Combined Functioning as Trademarks Are No Less Dictionary Words.

The UDRP is a rights protection mechanism of limited jurisdiction. It is not a trademark court; its jurisdiction is limited to claims of cybersquatting. Assuming there is a cause at all (and I think this remote and paranoid) it would be prospective for alleged trademark infringement. The dissent reasoned that the domain name was generic and the proof conclusive that Respondent’s prospective use of the name was plausible for its niche business.

The majority’s reasoning would be correct if the combination of words could not plausibly be used by others without liability for squatting on established rights. Because this issue is so important, it is worth understanding why the majority’s arc of reasoning is wrong. Instead of examining the facts objectively it offered an opinion. It chose not to believe Respondent’s sworn statements because it “expected” Respondent to have documentary evidence:

[W]hen an experienced company such as the Respondent’s starts the development of a significant new product, this would naturally lead to the creation of a number of documents about the project, such as marketing concepts (including in relation to the possible names for the new product), business plans, internal correspondence between team members developing the project, documents related to the financing of the project (such as documents for a capital increase, [etc.].

What this tells us is that Respondent is an “experienced [small] company” with a real business. It is particularly noteworthy that Respondent is not one of the usual suspects for cybersquatting. It provides services in a niche that could not be further removed from the services offered by the Complainant. So what is wrong about the majority’s decision?

I mentioned in opening this discussion that the Panel erred in applying a principle that is reserved for well-known and famous marks. The principle was never intended to apply to generic terms. In concluding his analysis, the dissent in Rosetta Stone cites Telstra Corporation Limited v. Nuclear Marshmallows, D2000-0003 (WIPO February 18, 2000). It will be remembered that the Telstra Panel formulated a principle which has become fixed in UDRP jurisprudence. I will call it the “inconceivability or implausibility principle.” This principle holds that inference will be drawn from respondent’s choice of name when “it is not possible to conceive of any plausible actual or contemplated active use of the Domain Name by respondent that would not be illegitimate.” But the principle was intended for application against registrants incorporating famous marks like TELSTRA; it was not intended for marks composed of generic elements.

When a Panel extends the “inconceivability/implausibility principle” to apply to cybersquatting claims against registrations of generic terms its subjective conclusion relieves the Complainant of its burden of proof, thus equivalent of putting a finger on the scale in favor of mark owners. The dissent in Rosetta Stone is right but his analysis stops short of the real danger that can come of the majority’s decision. If the majority’s view were to spread to other panelists and cited in later cases as “precedent” it would corrupt the jurisprudence by creating an imbalance in assessing rights. Once there is a plausible explanation for registration of a domain name composed of generic elements that should end the analysis and the complaint dismissed on grounds that complainant has failed to satisfy its burden of proof. Like the Respondents in “ado” and “imi” awards, the Rosetta Stone Respondent has filed a complaint under the ACPA. It will be interesting to see how the district court deals with this philosophical and legal issue.

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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