UDRP does not apply to bad faith renewal of a domain name registration

by Philippe Rodhain  Email

Background

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.  To succeed in a UDRP action (ie to obtain cancellation or transfer of the disputed domain name) it is necessary for the party bringing the complaint (the complainant) to show that (i) the disputed domain name is identical with or confusingly similar to a trade mark or service mark in which the complainant has rights; (ii) the domain name holder (known as the respondent) 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. Each of the aforesaid three elements must be proved by the complainant to warrant relief.

A serious problem may arise for the complainant if the disputed domain name had been registered in good faith, but was renewed and was being used in bad faith. The cause of this problem lies in the fact that the Policy speaks only in terms of "registration" and "use" and not in terms of "maintaining" or "renewing" the domain name registration. Furthermore, 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." (WIPO administrative panel decision of 14 January 2000, Case No. 99-0001, World Wrestling Federation Entertainment, Inc. v. Michael Bosman).

Accordingly, how can the complainant satisfy the bad faith requirement in such a context? Can the renewal of a domain name registration made in bad faith convert a name originally registered in good faith to a name registered in bad faith for the purpose of the Policy?

A clue to the answer can be found in the Report of the World Intellectual Property Organization (WIPO) Internet Domain Name Process, which stresses that the Report was not intended to extend the definition of abusive registration to include domain names originally registered in good faith. Indeed, 197 of the Report reads as follows:

"The WIPO Interim Report recommended that a time bar to the bringing of claims in respect of domain names (for example, a bar on claims where the domain name registration has been unchallenged for a designated period of years) should not be introduced. It was considered that such a measure would not take into account that the underlying use of a domain name may evolve over time (with the consequence that the use of a domain name may become infringing through, for example, the offering for sale of goods of a different sort to those previously offered on the website); that any related intellectual property rights held by the domain name holder may lapse; and that a time bar would in any event be undesirable in cases of bad faith".

Read in conjunction with 198 of this report, it is clear that the reference in 197 to "infringing" was intended to apply to the wider category of trademark infringement, not to the narrow category of abusive registration. The question whether domain names registered in good faith can become infringing is outside the scope of this inquiry.

The Policy, which was based on the above report, sets out examples of behavior that constitutes bad faith holding of a domain name:

All of these examples relate to the registration and/or use of a domain name only. The Policy could have been drafted to address both bad faith registration and renewal. It does not do so, referring only to a registration having been obtained in bad faith.

Consequently, panels, who are bound to apply the Policy strictly, have always refused to take into consideration the renewal of the domain name registration in the process of making their decisions.

UDRP cases involving the renewal of domain name registrations

In the case of weatheralls.com, the panel found that the respondent renewed the registration in bad faith and was using the disputed domain name in bad faith when the said domain name was renewed. However, the panel highlighted the limits of the Policy and then dismissed the complaint in the following terms:

"It is important that the Complainant in this case understands the limits of the Policy and Rules and therefore the basis for this decision. The panel is bound to apply the Rules as they are and as they have consistently been interpreted. On the facts it has been found that the original registration was not in bad faith. Nor was subsequent use in bad faith at least down to renewal of registration in October 2000. But a registration of a domain name that at inception did not breach Rule 4(a)(iii) but is found later to be used in bad faith does not fall foul of Rule 4(a)(iii)."(WIPO administrative panel decision of 19 February 2001, Case No. D2000-1528, Weatherall Green & Smith v. Everymedia.com).

In the case of afl.com, the respondent had registered the disputed domain name to reflect the initials of its business. Although the respondent then discontinued his business, the respondent renewed the disputed domain name and offered to sell it to the complainant for valuable consideration in excess of documented out-of-pocket costs related to the said domain name. The panel held that, though the disputed domain name was obviously renewed in bad faith, the relevant point of inquiry was the original registration, and at that time the respondent had been acting in good faith in the following terms:

"Therefore, once a panel finds that a domain name was originally registered in good faith, any subsequent renewal which could qualify as having been done in bad faith is irrelevant: the relevant point of inquiry occurs at registration, not renewal of that registration. It was not the intent of the drafters of the Policy to include bad faith renewals of domain name registrations as relevant for Policy 4(a)(iii) analysis" (National Arbitration Forum decision of 26 December 2002, Case No. FA128791, Arena Football League, LLC v. Armand F. Lange & Associates)

There also has been an increasing number of cases in which the complainant, though aware that the disputed domain name was registered in good faith, focuses its argument on the renewal of the disputed domain name registration, arguing that that renewal constitutes a new registration.

In the case of sami.com, the complainant argued that the renewal of the registration of the disputed domain name was in bad faith, contending that, because the domain name was renewed in the name of an entity that no longer existed, such conduct constituted registration of a domain name in bad faith. This attempt to show that renewal can constitute a new registration was considered by the Panel as follows:

"Complainant seems to recognize that the original registration of the domain name was not in bad faith and thus concentrates its argument on the renewal of the registration in November, 2000. This renewal, according to Complainant, constitutes a new registrationÖ..While not addressing specifically the issue of whether renewal in bad faith satisfies the requirements of the Policy, the Panel did hold that the complaint was brought in bad faith and constituted an abuse of the administrative proceeding and mentioned, as one of the factors leading to the conclusion, the fact that complainant could not establish bad faith registration and therefore argued bad faith renewal".(WIPO administrative panel decision of 14 August 14 2001, Case No. D2001-0782, Substance Abuse Management, Inc. v. Screen Actors Modesl [sic] International, Inc. (SAMI))

Similarly, in the case of verint.com, the disputed domain name predated the complainantís trademark, the complainant argued that the renewal of the disputed domain name was the legal equivalent of initial registration and that at each act of renewal a new set of factual circumstances arises. Again, the panel dismissed this allegation on the ground that the Policy does not speak in terms of maintaining or renewing the domain name registration. (WIPO administrative panel decision of 21 November 2002, Case No. D2002-0896, Verint Systems Inc. v. Crystalstevens).

In the case of casualday.com, the complainant attempted to prove bad faith registration of the disputed domain name by arguing that after learning of the complainantís trade mark rights, the holder of disputed domain name still renewed the registration of the disputed domain name. The panel rejected this argument on the ground that:

"As noted, Complainant alleges that Respondentís renewal of the casualday.com domain name constitutes bad faith. Under the Policy, however, Complainant must provide evidence that the domain name "has been registered and is being used in bad faith" in order to justify a transfer of the name. Although the examples of bad faith set forth in the Policy have led to the interpretation in some other contexts that actual use may not always be required to satisfy the Policy (but instead that mere non-use or an intent to sell could satisfy the use requirement) here there is no justification for straying from the plain wording of the Policy and allowing bad faith renewal to satisfy the bad faith registration requirement. As Complainant has failed to show bad faith, the Panel does not reach Respondentís assertion that its current use of the casualday.com domain name is a non-commercial fair use." (WIPO administrative panel decision of 9 June 2002, Case No. D2002-0322, Media Image, Inc., Casual Day.Com, and Rodney Williams).

Conclusion

In view of these illustrations, it can be concluded that the renewal of a domain name in bad faith does not constitute bad faith registration as required by the Policy. The renewal of a domain name registration is no different from renewal of a trademark registration as it represents a continuation of the original registration. The difficulties associated with proving bad faith under the Policy have been recognized by other jurisdictions (such as Australia) who have recently introduced local versions of the Policy removing the requirement to show both registration and use of the disputed domain name in bad faith.

Copyright © 2003

PHILLIPS ORMONDE & FITZPATRICK

Philippe Rodhain
Intellectual Property Lawyer
philippe.rodhain@pof.com.au

This article is not intended as a substitute for legal advice. The specific facts that apply to your matter may make the outcome different than would be anticipated by you. You should consult with an attorney specialized in the issue and laws. No portion of this article may be copied, retransmitted, re-posted, duplicated or otherwise used without the express written approval of the author.


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