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UNITARY PATENT

In 2012 Member States and the European Parliament agreed on the "patent package" - a legislative initiative consisting of two...

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Delay Spells Danger in Cybersquatting Disputes

Delay is typically no friend to claimants. Yet in domain name disputes, it is a frequent factor. All too often delay in bringing a complaint is unexplained, and the passage of time can make it harder for a complainant to prove that a domain name was registered in bad faith, a requirement for success under the UDRP.

A recent UDRP decision involving navista.com flags up the dangers of waiting too long to take action against an abusive domain name (WIPO Case D2012-1157). Even dilatory complainants, however, may draw critical support from a cybersquatter's website content as a means of inferring bad faith intent at the time of registration, or at a relevant time thereafter.

Don't Wait for Me

The complainant, Navista, S.A., was a French company with registered CTM and French trademark rights in NAVISTA, dating from 2005 and 2006, respectively. It had traded since at least 2000.

The respondent, an unrelated entity, had registered the domain name
navista.com, which it used for a pay-per-click parking site hosting links to third-party commercial websites. Crucially, though, the domain name had been registered in 1998, two years before Navista had actually begun trading.

The navista.com case was unusual because of that fact, and also because the disputed domain name had been registered for 12 years when the complaint was finally brought. Even in domain name matters 12 years is a long time to wait before bringing an action, although it need not have been fatal had the complainant been able to prove that the respondent had no rights or legitimate interests in the disputed domain name, and that it had been registered and used in bad faith.

The disputed domain name in
navista.com had apparently been used only to provide what appeared to be pay-per-click sponsored links to third-party commercial websites, from which the respondent was likely profiting through income derived from click-through traffic. According to the decision, the complainant contended that "many" of the links had "nothing to do with the Complainant". The respondent for its part denied that any of the links were even in the same business sphere as the complainant. The upshot is uncertainty as to whether any of the links related to the complainant at all.

It was, however, clear that the disputed domain name was identical to the complainant's NAVISTA trademark, and the fact that the latter was registered only after the disputed domain name was irrelevant to the pure question of identity or confusing similarity to a trademark in which the complainant had rights.

Where the chronology came to the fore, however, was in weighing up whether the respondent had a right or legitimate interest in the disputed domain name, and whether it had registered it in bad faith. The complainant pointed to the respondent's lack of any actual commercial use as relevant to both points. Although historical screenshots were unavailable, the respondent's current website showed that the domain name was used only for a pay-per-click landing site. The complainant argued that the respondent was relying on the trademark power of NAVISTA to attract Internet visitors in order to profit from click-through income. Moreover, the complainant had offered the respondent US $1,500 for the sale of the domain name, whereupon the respondent had demanded US $25,000.

Too Little, Too Late

The panelist noted that the disputed domain name had been registered two years before the complainant had actually begun to trade under NAVISTA. There was no evidence that the complainant had plans to trade under NAVISTA at the time the disputed domain name was registered, nor that, if there had been such plans, the respondent could have been aware of them. Consequently, there was nothing to suggest that the respondent had registered the disputed domain name with the complainant in mind.

The panelist accepted that bad faith registration could sometimes be inferred from a respondent's later conduct. However, in his view, this principle could be taken too far. He noted that in mummygold.com (WIPO Case No. D2009-0643), the panelist had observed that "bad faith registration can occur without regard to the state of mind of the registrant at the time of registration, if the domain name is subsequently used to trade on the goodwill of the mark holder." In mummygold.com, however, the complainant's use had preceded registration of the domain name, unlike in this case. Moreover, in the current panelist's view, "a principle of a domain name registration being deemed retroactively (as distinct from retrospectively) to have been in bad faith, contrary to the original fact, could create unintended consequences for an innocent holder of a domain name."

In this case, 12 years had elapsed since the original registration of the domain name, and there was no evidence that the respondent had registered the domain name with the complainant in mind. The complainant had only begun to trade under NAVISTA two years after the domain name was registered. There was nothing to suggest that the complainant had plans, or that the respondent knew of any such plans, to trade under NAVISTA at the time the domain name was registered. Based on this, the panelist rejected the complaint and declined to order the transfer of the domain name.

Comment

What makes this decision such interesting reading is the panelist's distinction between "retrospective" as opposed to "retroactive" findings of bad faith registration.

The principle set out in Mummygold, that bad faith registration can be inferred from how a respondent has used a domain name, without regard to state of mind at the time of registration, answered a real need under the UDRP. Cybersquatting cases have been steadily rising, due in part to a vast boom in pay-per-click landing sites, normally featuring links to third-party commercial websites in the same field as the targeted brand owner. The fact that links on such pages relate to entities in the same commercial field as a brand owner is powerful evidence that a domain name was registered in bad faith, but it is not strictly speaking conclusive as to a respondent's intent at the time of registration, particularly where there is a long interval between registration of the domain name and its actual use for a pay-per-click site. Decisions like Mummygold served to confirm that later conduct may legitimately be relied on to infer a respondent's bad faith intent at the time of registration. It is hard to see how such findings could amount to imbuing registration of a domain name with "retroactive" bad faith.

Nonetheless, the panelist in navista.com is not on his own; the Mummygold approach, despite its common sense appeal, has always had its critics. Arguably, though, an inference of bad faith registration along Mummygold lines is not strictly necessary when under paragraph 4 (b) (iv) of the UDRP, panelists are permitted to deem both registration and use to have been in bad faith where there is evidence that by using the domain name, a respondent has intentionally attempted to attract, for commercial gain, Internet users by creating a likelihood of confusion with the complainant's mark as to the source, sponsorship, affiliation, or endorsement of the respondent's website or of a product or service on it.

Panelists commonly rely on this provision in relation to domain names used for pay-per-click websites, where there is no clear evidence as to what a respondent intended at the time of registration, but where it is clear that his intent is to profit from Internet confusion with the complainant now.

This provision can assist a brand owner contemplating action against a damaging domain name even where the action is brought years after the original registration. It is not necessarily a slam dunk for complainants if a respondent comes back with positive and persuasive evidence that a domain name was registered for legitimate purposes, without the complainant in mind. However, since the vast majority of respondents default, the balance still tends to favour complainants where there is a good prima facie case.

Bringing an action promptly, when evidence of a respondent's conduct and likely state of mind is easiest to gather, can still confer a strong advantage, though. Domain name watch services can help by flagging up potentially damaging new domain names early on, before they become too firmly established. Combined with prudent and timely action, such tools enable brand owners to police the Internet effectively and to tackle serious instances of cybersquatting promptly. On the Internet, with its global reach, such vigilance and early intervention not only count, but can make or break a case.