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Assessing Intent to Cybersquat

It, perhaps, does not have to be said that cybersquatting is an intentional tort. No one would expect the respondent to admit unlawful intention, but complainant’s proof must nevertheless support that contention. The Panel in Hästens Sängar AB v. Jeff Bader / Organic Mattresses, Inc. FA2005001895951 (Forum July 31, 2020) reminds us that it takes more than bad faith use of a domain name to find cybersquatting. And in the process of analyzing the facts, it shows us the shortcomings of proof to establish bad faith registration.

As it happens, there is no issue of intention in Hastens. Respondent was well aware of Complainant’s trademark; in fact, admits targeting it but for a legitimate purpose: “[I]t asserts that [in registering <comparetohastens.com>] it intends to employ the disputed domain name, as well as the other ‘compare to’ domain names that it registered, in connection with its bona fide sales of commercial products.” Respondent explains that “consumers can compare its commercial products with Complainant’s at in-person retail locations.”

“Compare to” advertising has received attention in trademark and false advertising cases in the U.S, and most likely in other jurisdictions but (to my knowledge) this is its first appearance in a UDRP dispute. There is a question as to whether this matter is even within the scope of the UDRP. The Panel appears to have it both ways as indicated by the italicized final clause:

It is true that such a comparison website, if launched, may attract consumers to it. But, if the website is properly designed, it likely would not cause confusion as to source, sponsorship or affiliation; rather, it should be clear that the website does not come from Complainant but rather from a competitor of Complainant. It also is true that such a comparison website might be designed to divert business from Complainant to Respondent, but that is not the kind of disruption of a competitor’s business contemplated by the Policy as evidence of bad faith registration and use. (Emphasis added)

But instead of dismissing the complaint on this ground, the Panel finds an alternative reason which essentially contradicts the first:

Whether Respondent engaged in bad faith registration requires consideration of Respondent’s intent. Respondent asserts that it registered the domain name in order to establish a comparison website, which, as noted above, could be a permissible use of the disputed domain name. Although Respondent did not come forward with affirmative evidence to establish demonstrable preparations to create such a website (which is a specific requirement under the policy for establishing rights or legitimate interests in a domain name), a finding a bad faith requires more.

In following through on the alternative, the Panel continues:

It is not enough that Complainant show that Respondent failed to come forward with evidence of its demonstrable preparations; rather, Complainant must come forward with evidence the establishes, by a preponderance of the evidence, that Respondent in fact registered the disputed domain name with a bad faith intention to cybersquat on the domain name. Such evidence might include evidence of an intent to sell the disputed domain name to Complainant for a profit, to prevent Complainant from reflecting its own trademark in a corresponding domain name, to disrupt Complainant’s business, or to attract consumers to the website to which the domain name resolves by creating a likelihood of confusion as to the source, sponsorship or affiliation of the website.

For a complainant to succeed it must submit “sufficient evidence to establish any of these examples of bad faith registration” but it has failed to do so, and this coupled with Respondent’s proof in the form of an affidavit which the Panel finds “credible with respect to Respondent’s intent at the time of registration” warrants dismissing the complaint.

The decision is remarkable in examining the facts and circumstances from different perspectives, which is highly educational, but it is also serpentine in the manner in which the Panel reaches its conclusion. The Panel was absolutely correct in noting that while a “compare to” domain name may have a disruptive impact on a complainant, it “is not the kind of disruption of a competitor’s business contemplated by the Policy as evidence of bad faith registration and use.” If this is so, cannot the bad faith analysis be dispensed with entirely? If a claim exists, it belongs in another forum.

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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