As reported on Domain Name Wire here, a recent decision by an arbitrator for the National Arbitration Forum provides another example of a UDRP decision that stretches both the intent of the UDRP and the limitations of trademark law. The panelist ordered the transfer of a seemingly generic domain citing that subsequent registration of a domain name, previously used by a Complainant, automatically indicates bad faith on the part of the new owner unless contrary evidence is provided.
In the case at hand the Complainant, the owner of FBomb Clothing, registered the domain fbomb.com in May of 2002 and used the domain from 2002 to 2008 as an online retail store for his clothing line. Despite this, he never registered or sought to register the term as a trademark, likely because the term “fbomb” is a slang word with a widely known generic meaning [http://www.urbandictionary.com/define.php?term=F%20-%20Bomb] that would have met resistance with the U.S. Patent and Trademark Office. Among the requirements of U.S. trademark law are prohibitions against the registration of marks that are generic or merely descriptive or that are scandalous or immoral.
Sometime in 2008, the Complainant failed to renew his registration for the disputed domain and his ownership rights expired. Upon expiration, the registrar listed the domain for sale in an online auction and the Respondent, winner of the auction, became the new owner of the disputed domain. Shortly after obtaining the domain, the new owner listed the domain for sale at a domain marketplace and at this time the Complainant realized that he had let his registration expire and tried to repurchase the domain. Eventually, the Complainant agreed to purchase the domain after placing the winning bid in an online auction. Instead of accepting this as a lesson learned, the Complainant filed a UDRP action with the National Arbitration Forum (NAF) and surprisingly won the dispute and was awarded the domain without paying Respondent the amount owed under their purchase and sale agreement.
The NAF arbitrator, in making his decision, noted that he believed the Complainant showed sufficient evidence to prove a common law trademark right in the term “fbomb.” This decision no doubt took the Respondent by surprise as the Complainant had no trademark registration in the term “fbomb” and likely assumed that because the term is commonly used it was not entitled to be recognized as a trademark, common law or otherwise. Without such registration, it would be impossible for Respondent or any consumer to anticipate the potential for overlapping rights in the course of performing their due diligence before placing the winning bid at auction.
Despite the panelist’s questionable rationale regarding the Complaint’s trademark rights, that is not the most unsettling part of the decision, as the panelist’s views on the registration of expiring domains lends one to believe such a decision would have been rendered whether or not the domain was associated with valid trademark rights. The panelist stated that the Respondent’s registration of a domain that had been previously used by the Complainant provided the required “bad faith” under the UDRP absent any evidence to the contrary. As such, the arbitrator noted that the Respondent’s registration of the domain fbomb.com on the day the domain expired and immediate offering of the domain for sale further evidenced Respondent’s lack or rights and legitimate interest in the domain.
Sadly, the ICA is not surprised that the panelist ignored the fact that Respondent was simply a customer of one of the largest domain registrars in the world and that he, as merely a user of the registrar’s service, played no role in the timing of when the expired domain was made available to general public. What is surprising is that a bona fide purchaser is being stripped of their property without any due consideration for no reason than the source of the inventory he chose to purchase. Until consumers purchasing domain names are given the same protection granted bona fide purchasers under traditional consumer protection laws, innocent individuals will continue suffering the dual injustice of losing their property without due process and the loss of their original purchase price.