Does the Policy Deal with a Business Dispute Between the Parties?
Although the UDRP is not intended to address “business disputes” per se, it is not uncommon for employers to bring Complaints against former employees who are alleged to have “absconded” with the employer’s domain name which was registered in the name of the employee… (for full commentary by Zak Muscovitch, see here)
We hope you will enjoy this edition of the Digest (vol. 3.33), as we review these noteworthy recent decisions, with commentary from our General Counsel, Zak Muscovitch; and Editor, Ankur Raheja. (We invite guest commenters to contact us.)
‣ Does the Policy Deal with a Business Dispute Between the Parties? (cryptospace .com *with commentary)
‣ Re-Registration Argument “Outdated and Rejected” (privacymaste .com)
‣ Was Respondent’s Position Not Implausible? (thewineflyer .com *with commentary)
‣ Respondent Proves to be a Better WatchDog, Retains Domain Name (watchdog .com)
‣ Respondent Attempts to Impersonate the Complainant (migros .vip *with commentary)
Have Something to Say? Share your feedback with us or contact us to write a Guest Comment!
Does the Policy Deal with a Business Dispute Between the Parties?
Panelist: Mr. Warwick A. Rothnie
Brief Facts: The Complainant is the CEO of two companies (dealing in cryptocurrency assets): Huerta Consulting Services LLC and Cryptospace LLC, which are wholly-owned subsidiaries of Digital Nomad Holdings, LLC. Cryptospace LLC is the owner of US Registered Trademark CRYPTOSPACE, registered on May 1, 2018 (first use in commerce: July 26, 2017) and acquired the disputed Domain Name in January 2020 from a third party for USD $15,000. The disputed Domain Name is, however, registered in the name of the Respondent and does not currently resolve to an active website. According to the Complainant, the Respondent was formerly the chief technology officer (“CTO”) of the companies Digital Nomad Holdings, LLC, Huerta Consulting Services LLC, and Cryptospace LLC and a minority shareholder. According to the Respondent, however, he is or was a member of the board, trustee of the domain, investor in the company, creditor to the Complainant and managing partner.
The Complainant claims that the Respondent was released from his role as CTO for non-performance. In support, the Complainant has submitted a document headed “Vendor Release Form”, dated April 15, 2023, which records the termination of the Respondent on November 4, 2022. On November 5, 2022, the Complainant filed a complaint with the Federal Bureau of Investigation relating to the Respondent’s alleged conduct. The Complainant alleges that the disputed Domain Name became registered in the Respondent’s name when the Respondent’s engagement with the business was terminated. In any event, the Complainant contends that the Respondent was not authorised to register the disputed Domain Name in his name rather than the name of the Complainant and has “absconded” with it. The Complainant says that he has personally paid the renewal fees.
The Panel issued an Administrative Panel Order inviting the Complainant to address the basis for his request for transfer of the disputed domain name to himself rather than to the companies claimed to own the trademark rights on which the Complaint was based and making provision for a response by the Respondent. Neither party made any further supplemental filings.
Held: The Panel would not ordinarily expect that a member of the Board of Directors, the managing partner or a creditor would be entitled to register and hold a company asset in his or her own name, except where there has been some sort of agreement with the Board or the company granting the security. There is no evidence before the Panel that other directors knew about or agreed to the arrangement. So far as the record in this proceeding reveals, however, it appears that the Respondent unilaterally appointed himself as trustee of the disputed Domain Name. It is not part of the Panel’s role to adjudicate the rights and wrongs of business disputes between the parties. However, the Panel considers that the business dispute between the Complainant and the Respondent over the Respondent’s role in the companies, whatever the merits, does not give the Respondent rights or legitimate interests over the disputed Domain Name.
Moreover, it is not clear when the disputed Domain Name became registered in the Respondent’s name. If it was when the disputed Domain Name was transferred to Cryptospace LLC in or around January 2020, there is no adequate explanation. Otherwise, if the Respondent transferred the disputed Domain Name into his own name when the business dispute arose, the existence of that business dispute does not provide a basis for the Respondent to have taken control of the disputed Domain Name. In each of these scenarios, therefore, the Panel considers the Complainant has demonstrated that the Respondent registered the disputed Domain Name in bad faith under the Policy. The Respondent’s refusal to return the registration and continued holding of the disputed Domain Name which, so far as the record shows, is an asset of the business constitutes use in bad faith.
Cryptospace LLC is not the Complainant. It does not appear to be in dispute, however, that the Complainant is the CEO of Cryptospace LLC or that he is the majority shareholder. On that basis, the Panel would be prepared to find that the Complainant has sufficient standing to bring the Complaint on behalf of the company. It is well recognised that the parent company of a corporate group may bring a complaint on behalf of a subsidiary it controls. Correspondingly, the Panel is to prepare to accept the CEO of a company may have standing to bring the Complaint on behalf of the company.
Complainants’ Counsel: Self-represented
Respondents’ Counsel: Self-represented
Case Comment by ICA General Counsel, Zak Muscovitch:
Although the UDRP is not intended to address “business disputes” per se, it is not uncommon for employers to bring Complaints against former employees who are alleged to have “absconded” with the employer’s domain name which was registered in the name of the employee. Where the domain name was registered before the existence of a company (see for example; Patrick Shawn O’Grady v. Sam Mckinley, NAF-FA1790052), or where there is a genuine dispute about who actually owns the domain name (see for example; Superior Gold v. Team Hollywood Global, NAF-FA0904001256919, or where there is a more complex dispute involving contractual and trademark issues beyond the domain name dispute (see for example; Luvilon Indus v. Top Serve Tennis, WIPO-DAU2005-0004), Panels tend to dismiss the Complaints. Where however, as Gerald Levine points out in his treatise (at Page 113), an employee has surreptitiously altered the registration (See for example; Top Driver, Inc. v. Benefits Benefits, D2002-0972) or where an employee registered the domain name in his own name instead of in the name of the company as he was supposed to do (see for example; Sonic Crest Cadillac, LLC Hayes, FA 212652), Panels tend to find bad faith and transfer the domain name.
In this particular case, although it is not entirely clear from the absence of specific Respondent arguments (other than a reference in the decision to “the Respondent disputes most of these matters”), it appears that this case likely falls into the latter category, i.e. a bad faith registration by a former employee rather than a genuine business dispute.
What stands out to me in this particular case however, is that the Panel transferred the disputed Domain Name to a non-party, i.e. Cryptospace LLC. The Complaint was brought by the CEO of this company when it should have been brought by the company. Even if standing were somehow made out here as the Panel apparently found, a transfer to a non-party seems to be taking a rather generous liberty with the confines of the Policy. The Panel indeed seems to have thought so as well, at least initially, since he issued a Procedural Order asking the Complainant to address this issue, which the Complainant failed to do. Perhaps at that point the Complaint ought to have been dismissed without prejudice rather than going so out of the way to facilitate a transfer under such questionable circumstances.
Re-Registration Argument “Outdated and Rejected”
Panelist: Mr. Steven M. Levy, Esq. (chair), The Honorable Neil Anthony Brown KC and Mr. Jeffrey J. Neuman
Brief Facts: The Complainant is a provider of credit score management services. It owns rights in the PRIVACYMASTER mark through its registration with the USPTO (registered on January 25, 2022). The Respondent registered the Domain Name in January 2000 for future use, while he was working as a Privacy Law counsel. The Complainant alleges that the Respondent fails to make active use of the disputed Domain Name since it resolves to a registrar parking page and that the Respondent attempted to extort from the Complainant by requesting USD $100,000 for the domain name via a GoDaddy broker. The Complainant further alleges that the Respondent renewed (re-registered) the disputed Domain Name on January 1, 2022, over a year after the Complainant filed its trademark application for the PRIVACYMASTER mark with the USPTO, and with actual knowledge of the Complainant’s trademark rights.
The Respondent contends that the disputed Domain Name is “a combination of two dictionary words” with “inherent value” and thus the resolution to pay-per-click links relating to privacy fencing is merely the result of the generic or descriptive meaning of the phrase “privacy master”. The Respondent further contends that it was the Complainant, who made numerous, unsolicited offers to purchase the disputed Domain Name and it knew of the Respondent’s ownership of the disputed Domain Name prior to filing its claim. However, it misrepresented the Respondent’s behavior and actions in an effort to prevail in this case and has thus abused the Policy and is guilty of reverse domain name hijacking.
Held: The Respondent has not provided any evidence to support or demonstrate its claim of preparing to use the disputed Domain Name for a bona fide offering of services. However, given the descriptive nature of the phrase “privacy master”, as used in the abstract and without reference to the Complainant or its mark, and the nature of the Respondent as an expert in privacy law matters, the Panel finds quite plausible Respondent’s claim that it registered the domain name and is contemplating using it for its ability to describe his professional skills at some point in the future. Further, it is clear to the Panel that the Complainant initiated and repeated offers to purchase the disputed Domain Name from the Respondent and this does not create any presumption of the Respondent’s bad faith.
Policy ¶ 4(a)(iii) is stated in the conjunctive, i.e., “has been registered and is being used in bad faith” (emphasis added). Contrary to the Complainant’s assertion of a “re-renewal”, it has now long been a well-accepted standard in UDRP cases to consider, for purposes of the bad faith registration analysis, the date on which a respondent acquired the disputed Domain Name rather than the date of any subsequent renewal. The Complainant argues the outdated and rejected theory that, despite the Respondent’s ownership of the disputed Domain Name for twenty-one years prior to the Complainant’s first claim of trademark rights.
RDNH: The Complainant is represented by legal counsel and the present case fits the “Plan B” model as the Complainant pursued the present case only after its many unsuccessful attempts to purchase the disputed Domain Name from the Respondent. The Complainant mischaracterized the message of a registrar broker as Respondent’s “obvious attempt to extort Complainant”. While it is clear that the Complainant was highly motivated to acquire the <privacymaster .com> domain name, having offered as much as USD $55,000 over the course of more than two years, the aim of the Policy is not to award transfers to the party who claims it will put a given domain name to better or more productive use, but only to address abusive domain names that target a complainant’s trademark.
The Complainant also asserts an out-dated and rejected line of argument in an attempt to overcome the fact that the disputed Domain Name was registered twenty-one years prior to the earliest existence of its trademark rights. However, even had the Complainant been correct in its assertion that the Respondent’s renewal of the disputed Domain Name created a “re-registration” to satisfy the conjunctive nature of Policy ¶ 4(a)(iii), it has still failed to prove that the Respondent acted in bad faith by specifically targeting the Complainant and its mark. Rather, the Complainant knew of the Respondent’s position as Director, Office of Support Operations and Chief FOIA and Privacy Officer at the United States SEC.
Complaint Denied (RDNH)
Complainants’ Counsel: Marcel Budiono of Rutan & Tucker LLP, California, USA
Respondents’ Counsel: Jason Schaeffer of ESQwire.com, P.C., New Jersey, USA
Was Respondent’s Position Not Implausible?
Panelist: Mr. Warwick A. Rothnie
Brief Facts: The Complainant, for 20 years, offered its Executive Club members the opportunity to buy alcoholic and non-alcoholic beverages through a service known as “Wine Explorer” provided by Direct Wines Ltd, relaunched as “The Wine Flyer” in May 2019. However, on October 4, 2022, the Complainant launched a new wine club known as “The Wine Flyer” after the relationship with Direct Wines Ltd. came to an end and uses the domain name <thewineflyer .co .uk> (registered on July 22, 2022). The Complainant is also the owner of two registered trademarks for THE WINE FLYER in the EU and UK; both trademarks were filed on July 1, 2019, and entered on the Register on February 11, 2020. The Complainant also had a corresponding application in the United States but that application was abandoned, or lapsed, on June 21, 2021, without proceeding to registration.
The Respondent acquired the disputed Domain Name on February 5, 2022, in an auction and resolves it to a branding website, promoting the importance of aligning domain names, and toll-free telephone numbers with the business’ brand as part of a concerted marketing strategy. Ms. Stocker appears to be the principal of the Respondent although the precise nature of the Respondent is not clear. The Respondent contends that “the wine flyer” is a generic term and has registered <wineflys .com>, <travelwine .com>, <vinovial .com>, <skyvinos .com> and <travvino.com> in addition to the disputed Domain Name. The Complainant served the Respondent with a cease and desist letter twice, firstly on November 4, 2022, and again on January 18, 2023. The Respondent denied liability and stated that the Respondent had registered a number of descriptive names to explain how wine lovers can travel with wine and had no intention of competing in the supply of wine, denying liability to the Complainant.
The Complainant contends both it and its trademark are widely known internationally, including in the United Kingdom and its services under the trademark have been widely publicised. The Complainant relies on Ms. Stocker’s acknowledgement (in her Response to C&D letter) of the Complainant’s abandoned trademark application in the United States and a willingness to engage in confidential settlement negotiations which the Complainant contends indicates the Respondent’s intention to sell the disputed Domain Name for a profit. The Complainant also points out that the disputed Domain Name resolved to a web page which the Complainant characterises shows the Respondent’s primary business is the sale of domain names and telephone numbers.
Held: The issue in the present proceeding is whether the Respondent registered the disputed Domain Name to take advantage of the trademark THE WINE FLYER, not BRITISH AIRWAYS. The Respondent denies knowledge of the Complainant’s trademark before registering the disputed Domain Name. The Respondent further adds that the disputed Domain Name was registered in connection with a planned business or website explaining how wine lovers can travel with wine. However, given the facts and circumstances of this case, the Panel does not consider this an appropriate case to go behind the Respondent’s denial of knowledge of the Complainant’s trademark when the Respondent registered the disputed Domain Name. Further, the Panel would not characterise the content of the “About Us” page by itself as disclosing that the Respondent’s primary business is the sale of domain names and telephone numbers. The whole annexure might be more appropriately characterized as promoting a brand consulting or development business.
It is important to remember that the Respondent registered the disputed Domain Name in February 2022, that is, before the Complainant registered its current primary domain name, <thewineflyer .co .uk> and well before the Complainant launched its current business. As of February 2022, the Complainant did have its two registered trademarks in the European Union and the United Kingdom. Further, there is no evidence that the Complainant’s promotional activities, or even awareness of its trademark, extended to the United States, where the Complainant had abandoned its trademark. The Panel accepts that the Respondent’s indication of a willingness to engage in “confidential settlement communications” could lead to an inference that the Respondent was seeking to use the disputed Domain Name for sale to the Complainant at a profit. On the other hand, if the Respondent genuinely had other plans for the use of the disputed Domain Name unconnected with its significance as the Complainant’s trademark, proposing negotiations of that kind would not indicate bad faith when the disputed Domain Name was registered.
The Panel would not characterise the expression “wine flyer” as either directly descriptive of the service the Respondent claims it was seeking to develop or otherwise as inapt for such a service. Accordingly, the Panel does not think the Respondent’s explanation of the intended purpose for the disputed Domain Name is so implausible it can be dismissed. More compellingly, the Respondent also claims to have registered more Domain Names incorporating the word ‘wine’. The Respondent subsequently offered at least some of these for sale. For present purposes, the registration of these names shows some interest in the subject matter the Respondent claims to have registered the disputed Domain Name for and an indication that the Respondent was not targeting the Complainant. Overall, therefore, the evidence available in this proceeding does not rise to the level where the Panel considers the Respondent must have known about the Complainant’s trademark and has attempted to take advantage of that trademark significance in the face of the Respondent’s denial. Accordingly, the Complainant has not established that the Respondent registered the disputed Domain Name in bad faith.
Complainants’ Counsel: Maucher Jenkins, United Kingdom
Respondents’ Counsel: Self-represented
Case Comment by ICA General Counsel, Zak Muscovitch: There appears to have been some doubt as to the Respondent’s bona fides here, though the Respondent’s other domain name holdings, the nature of the domain name, the chronology combined, and the apparent absence of notoriety in the United States, apparently caused the Panelist to find that the Respondent’s position was not “so implausible it can be dismissed”.
Other Panelists may have found otherwise in the circumstances, but I think it is important to note the ‘implausibility test’ that the Panelist employed here. Implausibility is a well-established factor in UDRP proceedings, borne out of the Telstra case which requires in part that “it is not possible to conceive of any plausible actual or contemplated active use of the domain name by the Respondent that would not be illegitimate, such as by being a passing off, an infringement of consumer protection legislation, or an infringement of the Complainant’s rights under trademark law”. Given, the Telstra test focuses on famous or well-known marks making the implausibility test a crucial and apt factor to consider. Nevertheless, it does also possibly have a role beyond those circumstances. For example, where there is doubt as to whether the Complainant sufficiently made out its case for bad faith combined with doubt as to whether the Respondent sufficiently made out its case for good faith, perhaps the “tie should go to the runner”, which is another way of saying that absence implausibility of the Respondent’s position, it should be given the benefit of the doubt as the Panelist did here. After all, the UDRP was not intended to apply to questionable cases of cybersquatting, but rather to clear cases of cybersquatting.
Respondent Proves to be a Better WatchDog, Retains Domain Name
Panelist: Mr. Fernando Triana, Esq. (Chair), Mr. Steven M. Levy, Esq., and Mr. Adam Taylor, Esq.
Brief Facts: The Complainant, founded in 2003, owns rights to the trademark WATCHDOG based on registration of the mark with the USPTO on June 13, 2023. The disputed Domain Name was originally registered on February 28, 1995; however, the Respondent’s predecessor acquired it in 2000. The disputed Domain Name is currently inactive but the Respondent contends that for many years before the Complainant’s trademark registration it was actively used and the disputed Domain Name consists entirely of a common word, which was selected and used for its common purpose. The Respondent further contends that it through its predecessors began using the disputed Domain Name in December 2001, became the Registrar of record for the disputed Domain Name in 2003, and then became the Registrant of Record in 2004. The Complainant did not come into existence until September 8, 2003, almost 2 years later.
Held: The Panel notes that, while the Respondent does not deny that the disputed Domain Name is currently inactive, its proof does support the contention that for many years before the Complainant’s trademark registration it was actively used. The Panel finds that the Respondent’s evidence is persuasive on the issue of rights and legitimate interests. Further, since the disputed Domain Name was owned by an entity connected with the Respondent since at least 2001, and the Complainant did not come into existence until 2003, it is impossible to conclude that the registration was done in bad faith, as that could not have been the intention of the Respondent at the time of acquisition of the disputed Domain Name. As for the use, the mere inactivity of the disputed Domain Name is not enough to establish bad faith.
RDNH: The Panel observes that such a finding is justified where a Complainant proceeds despite the fact that it knew or should have known that it did not have a colorable claim under the Policy. The Panel notes that the Respondent does have rights and legitimate interests in the disputed Domain Name for purposes of the Policy. Moreover, the disputed Domain Name registration predates the Complainant’s first claimed rights in the trademark WATCHDOG by almost 21 years. Nevertheless, the Complainant asserts that the disputed Domain Name was registered and is being used in violation of its trademark rights.
The Complainant’s trademark came into registration long after the disputed Domain Name was registered and the Complainant did not substantiate its vague claims of lack of rights or legitimate interest or bad faith registration and use. On balance, the Panel finds that the Complaint was brought in bad faith, in an instance of reverse domain name hijacking, and constitutes an abuse of the administrative proceeding.
Complaint Denied (RDNH)
Complainants’ Counsel: David Heckler of Watchdog USA, LLC, Pennsylvania, USA
Respondents’ Counsel: Peter J. Riebling of Riebling IP, PLLC, District of Columbia, USA
Respondent Attempts to Impersonate the Complainant
Panelist: Mr. Petr Hostaš
Brief Facts: The Complainant was originally founded in 1925 as a private enterprise and later transformed into regional co-operatives. Large parts of the Swiss population are members of the Migros cooperative, thus making the Complainant a supermarket chain that is owned by its customers. The Complainant owns a number of trademarks for the distinctive term MIGROS and the variations thereof under numerous classes. The Complainant’s MIGROS mark is well-known and recognized by numerous UDRP Panels and it uses its mark in numerous domain names as well in addition to its main website at <migros .com>.
The Complainant alleges that the disputed Domain Name, accessible from selected geographical areas, is clearly intended to exclusively “pass off” as the Complainant herein and have a free ride on its reputation and goodwill. This is further evident from the YouTube videos demonstrating how to use the website at the disputed Domain Name for USDT earnings, and these videos further contain references to the Complainant’s convenience stores, office building, logo and so on. As a result, the Respondent attempts to impersonate the Complainant and induce its customers to believe that the disputed Domain Name is that of the Complainant and/or associated in some manner with the Complainant. The Respondent did not file a Response.
Held: The disputed Domain Name does not resolve to any active webpage, however, it follows from the Google search, that the search results for <migros.vip> return the reference to the disputed Domain Name – the text “Forgot password? Sign in. Sign up>> or to the YouTube videos containing how to use the website at the disputed Domain Name for USDT earnings. Such “use” of the disputed Domain Name is not a piece of evidence that the Respondent is engaged in, or have engaged in any activity or work, i.e. legitimate or fair use of the disputed Domain Name, that demonstrates a legitimate interest in the disputed Domain Name. There is further no evidence, that the Respondent is known by the disputed Domain Name or that it has a legitimate interest in the disputed Domain Name.
The Respondent has registered the disputed Domain Name which consists of the Complainant’s trademark “MIGROS”. There are no doubts that the Complainant’s trademark is distinctive, famous and well-known worldwide as follows from the several UDRP decisions such as CAC-UDRP-103846 or CAC-UDRP-105122. It could be therefore concluded that the Respondent had or should have the Complainant and its trademark in mind when registering the disputed Domain Name. The Complainant has further established the fact that the disputed Domain Name creates a direct association with the Complainant and is therefore capable of creating a likelihood of confusion among the internet users. The registration and usage of the disputed Domain Name could, therefore, potentially harm the Complainant’s business by diverting traffic to a different website and violating the Complainant’s trademark rights, as well as demonstrate a lack of good faith in the registration and usage of the disputed Domain Name.
Complainants’ Counsel: SILKA AB, Sweden
Respondents’ Counsel: No Response
Comment by Newsletter Editor, Ankur Raheja: This is a typical cybersquatting matter of the type which the Policy was designed to address. The Domain Name incorporates the Complainant’s well-known distinctive mark in its entirety, such that there is a rebuttable presumption that the Respondent’s registration targeted the Complainant. The disputed Domain Name did not resolve to a website, however, the Respondent had some sub-pages activated inviting users to sign up from YouTube for USDT earnings. Moreover, the demo videos made use of the Complainant’s images including the registered mark, in an attempt to impersonate the Complainant. Such use can never confer rights or legitimate interests on a respondent and is in bad faith.