The ICA wishes all of its readers attending INTA® 2023 Annual Meeting a productive and enjoyable time.
We hope you will enjoy this edition of the Digest (Vol. 3.20), as we review these noteworthy recent decisions, with commentary from our General Counsel, Zak Muscovitch.
‣ False Allegations Used to Support Hijacking Attempt (WebSec .com *with commentary)
‣ Drop-Caught Domain Name Valuable despite Complainant’s Trademark (DataCap .com)
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Complaint Brought to “Harass” and “Coerce” Respondent after Failed Attempt to Purchase Million Dollar Domain Name
Panelist: Mr. Christopher S. Gibson
Brief Facts: The Complainant, founded in 2014, is an apparel brand that designs and manufactures footwear products, among other goods. The Complainant sells footwear exclusively through its website at the Domain Name <thursdayboots .com> (registered on June 9, 2014). The Complainant owns trademarks registered since 2020 with the earliest first use in commerce of October 1, 2014. The Respondent acquired the Domain Name for USD $40,000 on July 6, 2011, and currently links to a website titled “Thursday” and states “Enter Store Using Password.” The website hosted at the Domain Name remains in virtually the same state as it was in 2011, unused and the Complainant claims that it is impossible to conceive of Respondent using the Domain Name in a legitimate way.
The Respondent made repeated attempts to register trademarks with the USPTO for the mark, THURSDAY, in connection with a variety of products commencing in 2011, however, all of these attempts were abandoned. The Complainant, anonymously through a broker, offered Respondent USD $75,000 for the Domain Name to which the Respondent initially countered at USD $5.0 million, and ultimately demanded USD $1.5 million, along with the sale and transfer of the Respondent’s various related social media assets.
The Complainant alleges that the Respondent never used the disputed Domain Name and cites Telstra, finding that under certain circumstances “passive use” of a domain name can constitute bad faith use, and argues that a registrant has a duty that includes a representation and warranty that the registration will not now or in the future use the domain name in violation of any laws or regulations. The Complainant further urges the Panel to consider the holding in the 2009 Octogen decision that a domain name can be registered in good faith but retroactively be deemed to have been registered in bad faith. The Complainant claims Respondent became aware of the Complainant and its THURSDAY marks over the course of the last eight years, and that Respondent keeping the Domain Name in its current state is an abuse of Complainant’s valuable goodwill in its THURSDAY marks.
The Respondent states that the Complainant filed the Complaint knowing that the Respondent had registered the Domain Name in 2011, three years prior to the Complainant acquiring purported rights in any THURSDAY related trademarks and knows that it does not have, and cannot claim, exclusive rights in the word “Thursday”. The Respondent claims that when purchasing the Domain Name in 2011, he intended immediate use of the Domain Name as evidenced by filing use-based United States federal trademark applications for THURSDAY and THURSDAY.COM in August 2011. Respondent states that has used the Domain Name in connection with the password-protected website since at least as early as 2013 and for email.
Held: The Panel finds that the Respondent has provided evidence of intent to use the Domain Name for legitimate purposes as early as 2011. There is no evidence that the Respondent has ever targeted the Complainant in any use of the Domain Name, or that the Respondent changed the use of the Domain Name in response to the Complainant or its marks. The Panel determines it is not necessary to make a finding under the second element of the Policy.
The record is undisputed that the Respondent acquired the Domain Name identical to the common word “Thursday” and then sought corresponding trademarks before the USPTO approximately three years before the Complainant registered its <thursdayboots .com> domain name. The Complainant did not exist in 2011 and there is no further evidence that the Respondent targeted the Complainant when acquiring the Domain Name and consequently no evidence of registration in bad faith. Further, to the extent, the Complainant argues as regards retroactive bad faith registration, this line of reasoning is clearly disfavored under UDRP precedents (see Overview 3.0, section 3.2.1). The Panel agrees with the consensus approach. Moreover, the Complainant, in any event, provides no evidence to indicate that the Respondent failed to comply with the registrant representations in UDRP paragraph 2.
There is no evidence that the Respondent ever targeted the Complainant in any way. Aside from Complainant’s broker-based interaction, there is no evidence that the Respondent ever sought to sell the Domain Name to the Complainant. Moreover, although the Complainant cites the Telstra case, it fails to meet the criteria set forth in that case to demonstrate that any “passive holding” or “passive use” of the Domain Name has been in bad faith. In relation to Complainant’s squatting argument, where no trademark exists at the time of registration, there can be no targeting and it is not bad faith registration even if followed by non-use.
RDNH: The primary factor in support of this finding is that the Domain Name was registered approximately three years before Complainant’s trademark rights came into existence, and the Complainant is using this case in a bad faith attempt to coerce the Respondent into transferring the Domain Name after failing to obtain it by other means. The Complainant, represented by counsel, brought its Complaint with the clear knowledge that the Respondent had registered the Domain Name long before the Complainant and its trademarks existed.
The Complainant did not come close to meeting the Telstra factors and provided no evidence of bad faith use. The Complainant was aware of the Respondent and its Uncrate .com business, supporting the logical inference that this case is brought in harassment against the Respondent after the Complainant failed to purchase the Domain Name while using a broker, and without having alleged any bad faith registration or use in any prior communications. In conclusion, the Panel finds RDNH against the Complainant.
Complaint Denied (RDNH)
Complainants’ Counsel: Beard & Barks PLLC, United States
Respondents’ Counsel: Taft, Stettinius & Hollister, LLP, United States
Case Comment by ICA General Counsel, Zak Muscovitch: Panelist Gibson properly rejected the Complainant’s “retroactive bad faith” argument and properly found RDNH. As I have written about repeatedly in this Digest, we often see Panels avoid making an affirmative finding in favor of the Respondent on the second part of the test, viewing the second part as ‘only a test of the Complainant’s allegations of lack of rights and legitimate interest’ rather than an obligation to make an affirmative finding in the Respondent’s favor where the facts support it. Here, the Panelist expressly acknowledged that the Respondent “provided evidence of intent to use the Domain Name for a legitimate purpose as early as 2011” which was prior to the Complainant’s existence but did not make an affirmative finding in favor of the Respondent.
It is important to bear in mind that the UDRP expressly enables a Respondent under Paragraph 4(c) to “Demonstrat[e] [its] Rights and Legitimate Interests [in] Responding to a Complaint”. The second part of the UDRP test is not just there for Complaints, it is also there for Respondents. It appears that some Panelists begrudge a “legitimate interest” finding in favor of Respondents and this calls into question whether Respondents are afforded the “equal treatment” that they deserve under UDRP Rule 10(a): “In all cases, the Panel shall ensure that the Parties are treated with equality and that each Party is given a fair opportunity to present its case”. So while I can appreciate judicial economy and can also appreciate that in some cases it is best to decide a case on the clearest basis available, making such affirmative findings is not optional where warranted.
What I find particularly interesting about this case however, is how the Panelist dutifully respected the consensus application of the UDRP regarding the discarded and discredited “theory of retroactive bad faith” and found RDNH because “the Complainant, represented by counsel, brought its Complaint with clear knowledge that Respondent had registered the Domain Name long before Complainant and its trademarks existed” and “did not come close to meeting the Telstra factors for bad faith passive holding”. Contrast this with East End N.Y. Imports Inc. v. DYNAMO.COM, c/o Privacy Protection and Autorenewal, WIPO Case No. D2015-0995, where the same Panelist joined with another Panelist in refusing to find RDNH (Panelist Tony Willoughby strongly dissented and would have found RDNH) despite; a) the domain name registration having also preceded the existence of any trademark rights; b) the complainant making comparable “retroactive bad faith” arguments; and c) the complainant improperly relying upon Telstra. Also contrast the present case with Camilla Australia Pty Ltd v. Domain Admin, Mrs Jello, LLC, WIPO Case No. D2015-1593 where the same Panelist found registration and use in bad faith despite a finding that the Respondent did not and could not reasonably have known of the Complainant’s trademark when it registered the disputed domain name in May 2009 (Note: “The UDRP Decision ordering the transfer of the CAMILLA.COM domain name to the Defendant [was] vacated in its entirety” pursuant to a joint application made in the District Court of New Jersey in 2016).
It is therefore comforting to see that the Panelist’s approach has evolved along with the case law and consensus view. Had a Panelist been appointed who did not respect the consensus approach, the outcome may have been quite different. This demonstrates the immense discretion delegated to Providers under the Policy to ensure or not to ensure, that their roster Panelists demonstrate fidelity to the Policy and to its accepted interpretation, in the absence of ICANN oversight or formal Panelist review or complaints procedures.
False Allegations Used to Support Hijacking Attempt
Panelists: Mr. Luca Barbero, Ms. Sally M. Abel and Mr. Alfred Meijboom
Brief Facts: The Complainant is a cybersecurity company headquartered in the Netherlands, which was incorporated on August 3, 2020. It owns trademark registrations for WEBSEC before EUIPO (September 7, 2022) and USPTO (February 21, 2023; claiming first use as of March 8, 2020). The Complainant also owns the domain name <websec .nl>, which was registered on June 7, 2016, and is currently used by the Complainant to promote its cybersecurity services under the trademark WEBSEC. The disputed Domain Name was acquired by the Respondent in September 2016 and is not pointed to an active website.
The Complainant claims that it has used the trademark WEBSEC since 2016 in the European Union and subsequently in the United States since 2020, although also claims that multiple United States confidential partnerships had been put in place before 2018. Further, the Complainant indicates that, on October 27, 2020, it commenced contact with the Respondent, offering to purchase the disputed Domain Name for the amount of EUR 1,000, which the Complainant found to be corresponding to the fair market value of the disputed Domain Name. The Respondent however replied on the same date claiming it paid more than USD $1,000 for the disputed Domain Name, and offered to sell it to the Complainant for USD $10,000.
The Respondent rebuts the Complainant’s contentions stating that the Complainant falsely attempted to attribute the first use of the trademark WEBSEC in 2016 and that there is no proof that the Complainant ever came into possession of trademark rights belonging to any predecessor entity as claimed by the Complainant, whilst the Respondent registered the disputed Domain Name in 2016. The Respondent further contends that its website at the disputed Domain Name ran for several years and provided users the ability to automatically scan websites to find security vulnerabilities and also provides evidence as regards substantial preparations he undertook to develop the website further in 2017. The Respondent underlines that neither the Complainant nor its falsely claimed “predecessor” existed at the time.
Held: The majority of the Panel finds that the Complainant has proven that the disputed Domain Name is identical to a trademark in which the Complainant has established rights according to paragraph 4(a)(i) of the Policy. Panelist Sally M. Abel, instead, considers the first prong to be satisfied only with proof of prior trademark rights, which proof is lacking in this case. According to Panelist Abel, this prong of the test is not to be for procedural standing purposes only. Therefore, according to Panelist Abel, the Complainant already fails under the first requirement and the Panel should be under no obligation to consider this matter further.
The Respondent rebuts the Complainant’s contentions stating that it acquired the disputed Domain Name in 2016 and, before the filing of the Complainant’s trademark; it had been using the term “websec” in good faith for the sole purpose of providing a service in connection with its business. The Respondent demonstrated that its website at the disputed Domain Name was active for several years in the past, providing users the ability to automatically scan websites to find security vulnerabilities and additionally, the Respondent undertook substantial preparations to develop the website. The Respondent also submitted a notarized certificate showing that it adopted “Websec .com” as registered business name on April 11, 2017. The Panel finds that the Respondent has proved that it has been using the disputed Domain Name in connection with a bona fide offering of goods or services since long before the Complainant’s foundation and its filing of trademark applications for WEBSEC in the European Union and in the United States.
The Respondent acquired the disputed Domain Name in 2016, several years before the Complainant was established in its present form, filed its first trademark applications for WEBSEC in 2022 and started using the trademark. Accordingly, the Respondent could have not been aware of the Complainant’s claimed trademark rights at the time of the acquisition of the disputed Domain Name. Moreover, there is no evidence that the Respondent might have ever used the disputed Domain Name to target the Complainant and its trademark. The Panel, therefore, finds that the Complainant has also failed to demonstrate that the Respondent registered and used the disputed Domain Name in bad faith.
RDNH: The Panel concludes that the Complainant’s actions constitute Reverse Domain Name Hijacking for the reasons that firstly, the represented the Complainant should have appreciated the weakness of its case in view of the fact that the disputed Domain Name was registered well before the Complainant acquired trademark rights on WEBSEC. Secondly, the Complainant provided false allegations in the Complaint claiming commencement of operations in 2016 or that it had been using the trademark WEBSEC since 2016 in the European Union and subsequently in the United States since 2020 but did not submit any evidence of use to substantiate its allegations.
The Complainant’s case appears to be based on the argument that the Respondent’s use of a common/descriptive domain name in connection with a currently inactive website – which in the past offered web security services independently of any awareness of the Complainant – and the offering the disputed Domain Name for sale amounts to evidence of bad faith. The Panel finds that the Complainant should have contemplated that it could not succeed with such an argument. Moreover, the circumstances of the case clearly show that this was launched by the Complainant after its failure to purchase the disputed Domain Name from the Respondent.
Complaint Denied (RDNH)
Complainants’ Counsel: Solace Law, United States of America
Respondents’ Counsel: John Berryhill, Ph.d., Esq., United States
Case Comment by ICA General Counsel, Zak Muscovitch: As noted above in the summary of the facts, Panelist Abel instead, “consider[ed] the first prong to be satisfied only with proof of prior trademark rights, which proof is lacking in this case. According to Panelist Abel, this prong of the test is not to be for procedural standing purposes only. Therefore, according to Panelist Abel, the Complainant already fails under the first requirement and the Panel should be under no obligation to consider this matter further.”
It is indeed well-established that the first prong of the test is satisfied by ‘any trademark right at any time’. So for example, if a Complainant acquired trademark rights for the first time just last week, this is sufficient to meet the test – even if the Respondent registered the disputed domain name 30 years prior. In my comments about the Thursday case, I emphasized the importance of respecting the consensus view. But Panelist Abel has nevertheless raised a very interesting issue which calls into question the utility of the established practice on this particular issue: ‘Why accept a trademark right regardless of if it is junior to the domain name registration?’ Yes, that is the way we do it and have been doing it for some time, but does it really make sense? A trademark right is only material to a UDRP proceeding if it is senior to the Respondent’s domain name registration, so it seems rather aimless to go through the motions of accepting a trademark under the first part only to dismiss its relevance under the third part.
We previously saw Panelist Abel’s approach adopted in WEX Inc. v. Tom Soulanille, NAF Claim Number: FA2204001991413 which we covered in Digest Volume 2.21. There, the majority of the Panel including The Honourable Neil Brown and Gerald Levine, who noted that the usual approach would not have “achieved anything” since ultimately the Complainant would not be able to show that the Domain Name had been registered in bad faith because the Domain Name was registered prior to the Complainant’s trademark rights. Accordingly, rather than wait to determine this issue under the third part of the test, the majority of the Panel made a finding that the Domain Name was not identical or confusingly similar to a trademark in which the Complainant had rights, based upon the Complainant not having those rights at the material time, i.e. prior to the date of the Domain Name registration.
Now, it is true that the wording of the Policy refers to “has rights”, suggesting current rights in a trademark rather than rights at the material time (“your domain name is identical or confusingly similar to a trademark or service mark in which the complainant has rights”). But what is the point of merely having a trademark right at present if it is of no use to you against a senior domain name registration in a UDRP proceeding? There is merit in this perspective for two reasons: 1) Accepting a trademark right regardless of whether it was registered at the material time can serve to mislead inexperience Complainants who are understandably led to believe that since they have a trademark right, they qualify to use the UDRP; and 2) Our current approach unnecessarily belabors the UDRP analysis since if we required a trademark right from the material time, Panelists would be able to make quick work of Complaints that are based upon immaterial trademark rights.
That being said, it may very well be that for the most part, we end up at the same place regardless of which approach we take. Inexperienced Complainants will continue to bring faulty cases regardless, and Panelists will in any event have to evaluate the ‘rights chronology’ regardless of whether it is done under the first part or under the third. There is also of course the consideration that consensus once reached, should not be easily departed from. Nevertheless, the alternative approach adopted in this case is worth thinking more about.
Proxy Services Can be the Actual Registrant
Panelist: Mr. Gerald M. Levine, Ph.D., Esq.
Brief Facts: The Complainant is a very well-known cloud-based e-commerce platform designed for small and medium-sized businesses. It offers its services through various websites, including those accessible through the domains “shopify .com” and “shopify .ca.” It has offered its services for more than fifteen (15) years around the world in association with the coined trademark SHOPIFY, registered in a number of national jurisdictions. The disputed Domain Name was registered on March 5, 2023, and at the time of filing the complaint, the URL resolved to a shopping page, but it presently resolves to a warning page: “Dangerous Webpage Blocked.” The Complainant alleges that the registration of the disputed Domain Name openly impersonates the Complainant and the intrepid searchers who ignore the warning are either likely to be ensnared in some kind of deceptive scam or worse. The Respondent has not appeared to answer the complaint.
Preliminary Issue: In this case, the beneficial holder of the disputed Domain Name has chosen to hide its identity behind a Proxy shield. Where a registrar discloses the registrant as a proxy service the Panel has discretion to determine the identity of the beneficial owner or true registrant, which may be the proxy as stand-in for the undisclosed principal. Such is the case here. Non-appearance by either the beneficial owner or the Proxy is discussed in Padberg v. Eurobox Ltd., D2007-1886 (WIPO March 10, 2008) in which the Panel asked: “So who is the Respondent for the purposes of 3(b)(v) of the Rules?” It answered: “In the Panel’s opinion the only sensible answer to this question is that it is prima facie the entity that is recorded in the registrar’s register as revealed by a Who-Is search.”
Also see WIPO Overview 3.0” at section 4.4.5, as follows: Panel discretion – In all cases involving a privacy or proxy service and irrespective of the disclosure of any underlying registrant, the appointed panel retains the discretion to determine the respondent against which the case should proceed. As the Proxy is the only person disclosed by the registrar then “prima facie” it is the Respondent. Accordingly, the caption is corrected to reflect PrivacyGuardian .org Llc. as the Respondent as a stand-in for the beneficial registrant.
Held: The Respondent whose identity is hidden behind its proxy PrivacyGuard .org llc (the “Proxy”) has not appeared, and neither has the Proxy. As the beneficial holder of the disputed Domain Name has chosen to have its Proxy stand in its place it shall be responsible for the consequences of its and its Proxy’s default.
The Complainant has adduced evidence sufficient in itself to establish that the Respondent registered and is using the disputed Domain Name without the Complainant’s permission. The Respondent falsely projects itself as a merchant affiliated with the Complainant through an invitation to visit a website that at the present time carries a warning. In its earlier incarnation, as the Complainant shows, the disputed Domain Name resolved to a website offering various merchandise. Whichever page shows to an Internet searcher the Respondent is either using the disputed Domain Name for “commercial gain [. . .] by creating a likelihood of confusion with the complainant’s mark” or for malign and malicious purposes to entrap or cause harm to consumers in some manner. The evidence supports the further conclusion that the Respondent was well aware of the Complainant and was targeting both the Complainant and consumers looking to reach the Complainant’s website.
The registration of a domain name that is identical or confusingly similar to a trademark by an entity that has no relation to the owner or its mark is suggestive of bad faith. Where a party is found to have used a disputed Domain Name in bad faith, the question then arises as to whether it also registered it in bad faith. Abusive registration can be found if a review of the complete record shows the Respondent engaged in a nefarious purpose. Here, that purpose is demonstrable from the Respondent’s contents of the resolving website as well as the warning that it is a “known and dangerous page.” As use in bad faith presages registration in bad faith, the Panel finds that the Respondent also registered the disputed Domain Name in bad faith. On all the grounds set forth above, the Panel concludes that Respondent’s registration and use of the disputed Domain Name is an opportunistic exploitation of Complainant’s SHOPIFY mark.
Complainants’ Counsel: Daniel Anthony of Smart & Biggar
Respondents’ Counsel: No Response
Case Comment by ICA General Counsel, Zak Muscovitch: It is helpful for Panelists to sometimes go out of their way to include some additional information and analysis about an issue that arises in a case but it not necessarily determinative. Here, Panelist Gerald Levine provides us with such additional information and analysis regarding the approach to proxy services under the UDRP.
Free Speech is Protected by the UDRP
Panelist: Mr. Nicholas J.T. Smith
Brief Facts: The Complainant operates one of the largest airlines in the United States and owns rights in the SOUTHWEST mark (dated March 8, 1983). The disputed Domain Name was registered on March 06, 2023, and resolves to a website that provides non-commercial criticism of the Complainant’s engagement with Diversity, Equity and Inclusion policies as well as its (apparent) support for LGBTI rights and the Black Lives Matter movement and asserts that the Complainant has “gone woke”.
The Complainant alleges that the Respondent does not use the Domain Name for any bona fide offering of goods or services. Rather, the Respondent, through the use of the Complainant’s marks, images of the Complainant’s employees and trade indicia, seeks to disrupt Complainant’s business and pass itself off as the Complainant by operating a competing website. The Complainant further alleges that the Respondent registered the Domain Name using false WHOIS information and had actual or constructive knowledge of the Complainant’s rights in the SOUTHWEST mark. The Respondent did not file a Response.
Held: The disputed Domain Name consists of a play on the SOUTHWEST name, replacing the “west” element with the “woke”. The term “woke” can be used positively to refer to someone who is aware of racial (and increasingly social) inequities, but is increasingly used as an insult to describe a person or entity who is engaged in overzealous or performative left-wing behavior. There is no evidence that the Respondent competes with the Complainant, has sought to sell the Domain Name or seeks any commercial gain from the Respondent’s Website, rather the Respondent is using a Domain Name that refers to the Complainant, but contains a word (“woke”) that in the context would be seen as derogatory, to offer what appears to be genuine (in the sense that it is not a front for commercial gain) criticism of Complainant’s corporate policies.
The WIPO Overview 3.0 at Section 2.6, states “UDRP jurisprudence recognizes that the use of a domain name for fair use such as non-commercial free speech, would in principle support a respondent’s claim to a legitimate interest under the Policy.” In the present case, the disputed Domain Name does not create an impermissible risk of user confusion through impersonation as no ordinary consumer would think that the Complainant operates a website at the disputed Domain Name. While the Panel notes the Complainant’s arguments that the Respondent’s Website reproduces images and marks connected to the Complainant, that by itself does not result in the Respondent lacking rights or legitimate interests in a domain name containing a clear derogatory term used for non-commercial criticism. For the foregoing reasons, the Respondent has shown a right and legitimate interest in the Domain Name.
Moreover, the Uniform Domain Name Dispute Resolution Policy is designed to deal with clear cases of cybersquatting. The Panels have recognized that “[t]he Policy’s purpose is to combat abusive domain name registrations and not to provide a prescriptive code for resolving more complex trade mark disputes”.
Complainants’ Counsel: Matthew S. Anderson of Munck Wilson Mandala, LLP, Texas, USA
Respondents’ Counsel: No Response
Case Comment by ICA General Counsel, Zak Muscovitch: Panelist Nicholas Smith properly rejected this Complaint; a) because the UDRP recognizes non-commercial criticism and free speech as a “legitimate interest”; and b) This case is outside the limited scope of the UDRP which is only intended to address clear cases of cybersquatting and not more complex disputes. The UDRP provides in effect, a “safe harbor” for noncommercial or fair use of a domain name under Paragraph 4(c)(ii) of the Policy: You can “Demonstrate Your Rights to and Legitimate Interests” if “You are making a legitimate noncommercial or fair use of the domain name, without intent for commercial gain to misleadingly divert consumers or to tarnish the trademark or service mark at issue.”
The incorporation of the adjective “legitimate” into 4(c)(ii) has proven problematic. Some panelists have treated criticism that they view as derogatory or pejorative as “illegitimate”. Deciding which expressions of non-commercial criticism are legitimate or illegitimate places Panelists into fraught territory. Given the limited mandate of the UDRP and national freedom of expression rights which may trump a particular panelist’s view of the Policy, Panelists should consider themselves ill-suited to adjudicate this kind of dispute. This is so regardless of whether the content of the website is pejorative or derogatory of a Complainant’s brand or business. As noted by Nat Cohen in “Does the UDRP Interfere With Free Speech Rights? The StopSpectrum .com Decision” (CircleID, December 19, 2022), “even if the gripes and commentary may be untrue – the proper cause of action in that circumstances would be one for defamation, not dilution or cybersquatting” (Panelist Brian Winterfeldt in Courtney Cox, Ivy Lane Living v. Domain Admin, Privacy Protect, LLC (PrivacyProtect.org) / Betsy Riot, Betsy Riot, WIPO Case No. D2018-1256). This is so regardless of whether the content of the website is pejorative or derogatory of a Complainant’s brand or business.
Drop-Caught Domain Name Valuable despite Complainant’s Trademark
Panelist: Mr. Robert A. Badgley
Brief Facts: The Complaint, since 1983, has produced and sold “integrated point-of-sale (‘POS’) terminals marked with DATACAP” and operates a website at <datacapsystems .com>. The Complainant filed for trademark registration before USPTO on October 24, 2022, claiming the first date of usage as March 1, 1985, which is pending registration. The Complainant was aware of the previous registration of <datacap .com> and was notified that the previous registration of the disputed Domain Name had expired on May 23, 2022. The Complainant attempted backorder of the Domain Name but failed to acquire it. The disputed Domain Name was registered on June 25, 2022, by the Respondent, who contends that his “primary business is the acquiring, holding for resale, and sale of valuable, generic domain names – especially domain names composed of dictionary word(s)” and that he “has implemented reasonable processes and procedures to ensure that its domain name registrations do not violate the rights of any third parties”.
On September 20, 2022, the Complainant discovered that the disputed Domain Name resolved to a web page containing a “link farm” containing hyperlinks to websites of the Complainant’s competitors and also stated, “This domain may be for sale”. On September 21, 2022, an agent of the Complainant contacted the domain name broker used by the Respondent, to inquire about purchasing the Domain Name. The asking price was USD $79,999, but the Complainant made a smaller offer (undisclosed by the Complainant). That same day, Complainant’s agent sent an email stating that the Complainant was prepared to file an “arbitration” to recover the Domain Name.
On October 5, 2022, the Complainant’s lawyer sent an inquiry to the broker and asserted that the “link farm” was a bad faith use of the Domain Name. By letter dated October 6, 2022, Respondent’s counsel rejected Complainant’s offer to buy the Domain Name and asserted that the Complainant was improperly “attempting to reverse domain hijack” the Domain Name. The Respondent’s counsel questioned Complainant’s ability to prove common law trademark rights, given the number of other businesses that use the terms “datacap” or “data cap.” On or after October 10, 2022, the hyperlinks were removed from the website to which the Domain Name was resolved. The site continued to state that the Domain Name may be available for purchase.
Held: The Panel concludes, on this record, that the Complainant has failed to prove that the Respondent registered the disputed Domain Name in bad faith under the Policy. As such, the Complaint must fail.
The Respondent admits to having used a “drop-catch” service to acquire the Domain Name, and at the same time flatly denies having had any knowledge of the Complainant or its unregistered trademark DATA CAP at the time it registered the Domain Name. The Panels in previous UDRP cases have ruled against the respondents who have employed drop-catching services, in part because the very use of such a service means that the respondent knew that it was acquiring a domain name that someone else had previously owned and that such acquisition was perhaps because of its value as a trademark. Not all drop-catching cases, however, lead to a ruling against the respondent. In this case, the Respondent laid out in detail its standard protocol (as a domainer) for ensuring that its acquisition of domain names does not violate third-party trademark rights.
As Respondent explained, it acquired this Domain Name, while knowing that someone else had previously held it, because it was short and reflected a term widely used, both by businesses as a trademark, and as a common term in business parlance. Further, as noted above, while the Complainant claims to use and has some renown since as early as 1985, the Complainant had no registered trademark for DATACAP at the time the Respondent acquired the Domain Name. As such, Respondent’s standard search procedures did not reveal Complainant and its (common law) trademark.
On the record presented, and while acknowledging that this is a fairly close call, the Panel concludes that the Complainant has failed to prove that the Respondent registered the disputed Domain Name in bad faith. Because of the foregoing finding, the Panel need not address the issue of alleged bad-faith use.
Complainants’ Counsel: Ryder Mazzeo & Konieczny LLC, United States
Respondents’ Counsel: Law Offices of Grant G. Carpenter, United States