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Confusingly Similar But No Likelihood of Confusion in UDRP

The word “confusion” in the Uniform Domain Name Dispute Resolution Policy (UDRP) signifies two separate states of mind. The first in ¶4(a)(i) appears in the phrase “identical or confusingly similar to a trademark or service mark in which the complainant has rights.” It is a test to determine whether the mark owner has standing to maintain a UDRP proceeding. See The Perfect Potion v. Domain Administrator, D2004-0743 (WIPO November 6, 2004) (“The intent behind [the first requirement] is to ensure that the Complainant has a bona fide basis for the Complaint.”)

The second use of confusion appears in ¶4(b)(iv) in the phrase “likelihood of confusion.” This is a test to determine whether the registration and use of the challenged domain name amount to cybersquatting. A word of caution here, though: the second phrase is not to be confused with the same phrase used in trademark infringement jurisprudence. Rather, “likelihood of confusion” in the UDRP context is to be understood as an answer to the following question: “is it likely that a consumer will be confused into believing that there is an association of the domain name with the mark owner?” The standard for making that determination in a UDRP proceeding is significantly less demanding and made applying different factors than in a trademark infringement case. See Smoky Mountain Knife Works v. Carpenter, AF-230ab (eResolution July 3, 2000) (holding “Respondent’s use of the Contested Domain Names appears to satisfy even the more stringent test of likelihood of confusion.”)

This understanding—and sometimes misapplication of the standard and factors—is illustrated in Truworths Ltd v. saichao dong, D2020-1189 (WIPO June 25, 2020). The Panel concluded that while there was confusing similarity, there was no likelihood of confusion between <trueworths.com> and TRUWORTHS and dismissed the complaint. Setting aside the obvious question of typosquatting, which is an issue for the second and third requirements, the domain name is also identical to the mark, not in a side-to-side comparison, of course, but aurally as homonyms: that is when spoken the two are identical in sound. In any event, Complainant succeeds on the first requirement without controversy.

For the balance of the decision, though, the Panel steps into the error (although not in so many words) of applying the heightened trademark infringement standard. In a recent private comment I received about this case, the commentator noted: “[I] [d]on’t know if I have ever seen a UDRP decision that spends so much time dealing with what it does not know in order to deny a complaint.” This hits the nail dead-on, but in commending the decision, the commentator also got it wrong: “I would wager to bet” said the commentator, “that most panelists would have readily found for the complainant based upon a list of presumptions that the panelist here calls into question.” My reading of the decision is not so approving. Frankly, the Panel’s methodology in paying more attention to the unknown than the known is astonishing.

Pondering on facts unknown and drawing inferences from what the unknown may reveal if they were known can never be a substitute for knowing. Where triers of fact fail to concentrate on what is known and draw inferences from what is not known, they fall into error. An indisputable fact comes into being when a contention is supported by evidence. “Presumptions,” on the other hand, are no more than speculations of facts. This is why contentions that are mere “presumptions” are not a formula for success in litigation or proceedings under the UDRP.

It is a fundamental law of reasoning that to treat established facts as presumptions compounds error by elevating those inferences above facts. This is precisely why the reasoning process in Truworths is skewed. Complainant submitted evidence, but instead of giving it weight, the Panel preferred to ponder on what it did not know, and from what it did not know, inferred what it might be.

It says that it “seems” to him,

that the Respondent is using the Disputed Domain Name for the offering of gambling services which has nothing to do with the Complainant or the Complainant’s trademark and the fact that the Disputed Domain Name is in substance a typographical variant of the Complainant’s trademark is merely coincidental. The Complainant says the Respondent’s activities are illegal in China and illegal activities cannot confer a legitimate interest. Whilst the Respondent’s website is clearly written in Chinese logograms the Panel does not know whether it is based in or targeted specifically at China as opposed to readers of Chinese wherever they may be.

From these non-facts the Panel then infers that whatever confusion may exist “is merely concidental.” The error here is that Respondent did not appear to rebut the evidence, but the Panel concludes that because the domain name resolves to a website having no connection to Complainant’s goods that it must be exonerated from having intentionally chosen a domain name that just happens to mimic Complainant’s.

Whether Chinese gamblers are in China or expatriates is irrelevant to the question of whether Respondent intentionally registered the domain name for its trademark value. What are the Panel’s errors? First, it has misconceived the principle that informs “likelihood of confusion” by suggesting that domain names resolving to websites that “ha[ve] nothing to do with the Complainant” are non-infringing. This turns UDRP law upside down. It is true that where a respondent appears and rebuts Complainant’s contentions, it can succeed, but not because its motivation is unknown, but because Respondent has explained its motivation in certified testimonial and documentary evidence. There is a second error, namely giving greater weight to inferences than to the facts of record.

There is a menu of indisputable facts in Truworths; indisputable because supported by documentary evidence. One fact is that as soon as Respondent learned of a possible challenge to the domain name, it cyber-flew to another registrar in the U.S. registering with a nonexisting address. The original registrar of <trueworths.com> “suspended this domain because of betting” (email response to Complainant from the registrar). It turns out that betting websites are illegal in China. (Respondent has 2,200 domain names pointing to betting websites!) Based on this illegality, Complainant asked a sensible question (reframed in my words): “Can the use of a domain name for illegal activities ever confer a legitimate interest?”

We know from numerous decisions that in certain circumstances—fraudulent and criminal conduct, for instance—Complainant’s prima facie case that Respondent lacks rights or legitimate interests must succeed, unless Respondent rebuts the contentions by coming forward (the burden shifts to Respondent) with evidence that it does have rights or legitimate interests. This is probably true also of illegal activities. There was, as I have already noted, no rebuttal in this case since Respondent defaulted in appearance, yet the Panel nevertheless decided to put aside the issue of whether Respondent has a right or legitimate interest to explore the issue of abusive registration, and found, lo and behold! Which it had already predetermined that not only does Complainant fail on its prima facie case, it also fails to prove abusive registration.

The Panel’s explanation for accepting its inferences over undisputed facts is astonishingly misconceived. It says that

Taking the evidence as a whole the Panel is not satisfied that it establishes the Disputed Domain Name was chosen because of its similarity to the Complainant’s trademark. It seems to the Panel more likely that it was chosen as result of whatever methodology the Respondent uses to select domain names, and its similarity to the Complainant’s trademark is entirely coincidental. If that is the case there is no basis for a finding of bad faith unless further factors suggest otherwise.

The Panel’s fall back on Respondent’s “[unknown] methodology [in] select[ing] domain names” can not be explained. Whatever the “methodology” may be (completely speculative as even the Panel admits), there is still a likelihood of confusion, so that to conclude that <trueworths.com> was “more likely . . . entirely coincidental” makes no sense in light of the evidentiary facts which contradict it. Whatever the composition of the other 2,199 domain names Respondent holds, the evidence establishes that <trueworths.com> was chosen because Respondent knew Complainant’s mark was known to Chinese consumers. The choice of <trueworths.com> is not “coincidental” but intended to attract consumers to Respondent’s website because they recognize Complainant’s mark.

This is one of those decisions that should be vacated, and if ever challenged in a court of law; perhaps, even, in an in rem proceeding under the ACPA, it will be.

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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