The purpose of the Uniform Dispute Resolution Policy, known as the UDRP (hereafter the Policy), is to determine disputes relating to the registration or acquisition of domain names in bad faith. Under the Policy, the complainant must establish that (i) the disputed domain name is identical with or confusingly similar to a trademark or service mark in which the complainant has rights; (ii) the domain name registrant has no right or legitimate interest in respect of the domain name; and (iii) the domain name was registered and is being used in bad faith.

Whilst requirements (i) and (ii), at first glance, do not appear difficult to meet, it is not the same with requirement (iii). In fact, a serious problem arises for the complainant when a registrant has registered domain names in bulk, but has not used them i.e. they have not been resolved to any active website.

Indeed, the cause of this problem lies in the fact that from the earliest days Panels have always strictly maintained the conjunctive requirements for the complainant to prove that the domain name in issue had been registered and was being used in bad faith:

“It is clear from the legislative history that ICANN intended that the complainant must establish not only bad faith registration, but also bad faith use. These comments point out that cybersquatters often register names in bulk, but do not use them, yet without use the streamlined dispute-resolution procedure is not available” (WIPO administrative panel decision of 14 January 2000, Case No. 99-0001, World Wrestling Federation Entertainment, Inc. v. Michael Bosman).

Bad faith registration alone thus is an insufficient ground for obtaining a remedy under the Policy (WIPO administrative panel decision of 18 February 2000, No. D2000-0003, Telstra Corporation Limited v. Nuclear Marshmallows).

Accordingly, faced with a passive holding of a domain name, how can a complainant prove use in bad faith as well as registration in bad faith? In other words, what exactly does use of a domain name in bad faith mean under the Policy; does that require an active step to be undertaken by the registrant?

A clue to the answer can be found in policy’s paragraph 4(b). This provision in fact describes some (but not all) circumstances of registration and use in bad faith. Pursuant to this provision, any of the following circumstances if found by the Panel to be present, shall be interpreted as evidence of the registration and use of a domain name in bad faith:

(i) circumstances indicating that the registrant has registered or acquired the domain name primarily for the purpose of selling, renting, or otherwise transferring the domain name registration to the complainant who is the owner of the trademark or service mark or to a competitor of that complainant, for valuable consideration in excess of its documented out-of-pocket costs directly related to the domain name; or

(ii) the registrant has registered the domain name in order to prevent the owner of the trademark or service mark from reflecting the mark in a corresponding domain name, provided that it has engaged in a pattern of such conduct; or

(iii) the registrant has registered the domain name primarily for the purpose of disrupting the business of a competitor; or

(iv) by using the domain name, the registrant has intentionally attempted to attract, for commercial gain, Internet users to its website or other on-line location, by creating a likelihood of confusion with the complainant’s mark as to the source, sponsorship, affiliation, or endorsement of its website or location or of a product or service on its website or location.

It is clear that each of the above circumstances envisages either a positive step or passivity from the registrant. As a result, under the requirement that a domain name must be “being used in bad faith” a Panel must not only take into consideration positive actions undertaken by the registrant but also those circumstances susceptible of showing that the registrant is acting in bad faith due to its inactivity.

The concept of a domain name “being used in bad faith” therefore is not confined to positive action; inaction is included in that concept, as supported by the actual provision of paragraph 4(b) of the Policy. Hence, it is possible in some circumstances that the registrant’s inactivity may be regarded as evidence that the disputed domain name is “being used in bad faith”.

This reasoning has been applied for the first time in the case of TELSTRA.org. In that case, the Panel established that the passive holding of the disputed domain name did amount to acting in bad faith because of the presence of subsequent circumstances:

(i) the complainant’s trade marks had a sound reputation and were extensively known,

(ii) no evidence had been provided by the registrant concerning any actual or future good faith use in connection with the disputed domain name,

(iii) active steps were undertaken in order to conceal the registrant’s identity by operating under an unregistered business name, and

(iv) false contacts had been provided and were not corrected by the registrant.

This decision was very instructive because it presented some examples of what could be understood by “Without Limitation” pursuant to paragraph 4(b) of the Policy. Specifically, it discussed other circumstances that could be regarded as evidence of bad faith registration and use of the domain name in question.

In each case of passive holding of a domain name, the Panel must thus put all the facts of that case through an examination in order to determine whether other circumstances could be regarded as evidence of bad faith registration and use. Such a meticulous and rigorous factual analysis was reaffirmed in the same decision as follows:

“The Administrative Panel must give close attention to all the circumstances of the Respondent?s behaviour. A remedy can be obtained under the Uniform Policy only if those circumstances show that the Respondent?s passive holding amounts to acting in bad faith. The Administrative Panel has considered whether, in the circumstances of this particular Complaint, the passive holding of the domain name by the Respondent amounts to the Respondent acting in bad faith ” (WIPO administrative decision of 18 February 2000, Case No. D2000-0003, Telstra Corporation Limited v. Nuclear Marshmallows).

In light of the principles and lines of interpretation, a Panel will have to decide whether, in the circumstances of a particular complaint, the passive holding by the respondent of the disputed domain name could constitute use of a domain name in bad faith according to paragraph 4(b) of the Policy. For this purpose, all the particular circumstances of each case have to be thoroughly considered.

With the benefit of hindsight, these circumstances could have been itemized and classified in accordance with the trademark’s characteristics in issue and the respondent’s attitude.