The pandemic has seen a major swich to online presence. For trademark owners this meant an increased risk for their online business, that was targeted by cybersquatters. Keeping an online safe presence for the customers means taking action against abusive registration of domain names that target the trademark.
I will focus in this post on UDRP, and its advantages, as it has proven in over 20 years of application to be a swift procedure for trademark owners to protect their trademarks against abusive registration of domain names.
UDRP: an ADR Provided in the Registration Agreement
In cases of conflicts between a prior trademark and the domain name a special alternative dispute resolution procedure is available, respectively the procedure provided by the Uniform Domain Name Dispute Resolution Policy (UDRP or the Policy) adopted by ICANN.
The UDRP is accepted by the persons registering domain names from the date of conclusion of the registration agreement which includes references to UDRP and the relevant procedural rules.
Therefore, at the registration of a domain name the person applying for registration agrees, that in case a third-party claiming breach of his prior trademark rights by the registration of the domain name would initiate the special ADR procedure provided by UDRP, to accept the procedure and its consequences without exclusion of his right to access to justice.
When registering a domain name, the registrant represents inter alia the registration of the domain name will not infringe upon or otherwise violate the rights of any third party.
UDRP: Scope of Application
The UDRP procedure is applicable only to disputes between a holder of trademark rights and a domain name registrant.
Moreover, the UDRP is only applicable if the limited conditions provided by the UDRP Policy and Rules are strictly observed.
The scope of the procedure is to prevent abusive registration of domain names (cybersquatting), dealing with cross-border trademark-abusive domain name registration, and not to solve complex litigation between the parties, such as those deriving from prior commercial relationships.
The UDRP is applicable to the generic Top Level Domains and a number of country code Top Level Domains.
UDRP: What the Complainant Must Prove
In order that a trademark holder succeeds in a claim grounded on the UDRP, he must prove three elements:
- that the domain name is identical or confusingly similar to a trademark or service mark in which the complainant has rights,
- that the domain name older has no rights or legitimate interest in respect of the domain name and
- that the domain name has been registered and is being used in bad faith.
UDRP: the First Element
As regards the first condition, in all cases the complainant must hold trademark rights at the filing of the compliant. Trademark rights can be registered or acquired by use in commerce. In the latter case the complainant must generally prove that the name became distinctive sign associated with the complainant or his services.
When analyzing this first element of the Policy it does not matter for which classes of products or services the opposed trademark is registered. The place or date of registration or of the first use in commerce of the trademark bear no relevance as well when analyzing if the complainant holds prior trademark rights.
To determine if the second condition of the first element is met, a comparison between the trademark and the domain name is performed, to determine likelihood of Internet user confusion. To satisfy this test, the relevant trademark would generally need to be recognizable as such within the domain name, with the addition of common, dictionary, descriptive, or negative terms typically being regarded as insufficient to prevent threshold Internet user confusion.
Application of the confusing similarity test under the UDRP would typically involve a straightforward visual or aural comparison of the trademark with the alphanumeric string in the domain name.
While each case must be judged on its own merits, circumstances in which a trademark may not be recognizable as such within a domain name may include where the relied-upon mark corresponds to a common term or phrase, itself contained or subsumed within another common term or phrase in the domain name (e.g. trademark HEAT within domain name theatre.com).
The top level domain is typically disregarded when assessing confusing similarity under the Policy. Also, the content of the website at the domain name in dispute is normally disregarded under the first element of the Policy.
UDRP: the Second Element
The second condition that the complainant must fulfil is that the holder of the domain name has no rights or legitimate interest in respect of the domain name.
In this regard UDRP comprises few examples which can be construed as evidence of rights or legitimate interest:
(i) before any notice of the dispute, the respondent’s use of, or demonstrable preparations to use, the domain name or a name corresponding to the domain name in connection with a bona fide offering of goods or services; or
(ii) the respondent (as an individual, business, or other organization) has been commonly known by the domain name, even if the respondent has acquired no trademark or service mark rights; or
(iii) the respondent is 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 consensus view of UDRP panels is that the burden of proof in establishing no rights or legitimate interests in respect of the domain name rests with the complainant in as far as making out a prima facie case that the respondent lacks rights or legitimate interests. Once such prima facie case is made, the burden of production shifts to the respondent.
Lack of any evidence from the respondent or any response may determine, together with the rest of the elements of the case, a solution in the sense that the respondent does not hold rights or legitimate interest over the domain name in dispute.
UDRP: the Third Element
The third condition the complainant must comply with in order to succeed in a UDRP claim is that the domain name was registered and is used in bad faith. Bad faith must exist both at the date of registration and at the date of the complaint.
As pointed out above, the Policy was developed to fight against cybersquatting cases, respectively cases where certain persons register domain names with the knowledge that they represent trademarks of other persons, with the intention to generate damages for the trademark owners and/or to incorrectly exploit the trademarks in their own advantage.
Under the Policy, any one of the following non-exclusive scenarios constitutes evidence of a respondent’s bad faith:
(i) circumstances indicating that the respondent has registered or acquired the domain name primarily for the purpose of selling, renting, or otherwise transferring the domain name to the complainant who is the owner of the trademark or service mark or to a competitor of that complainant, for valuable consideration in excess of the respondent’s documented out-of-pocket costs directly related to the domain name; or
(ii) the respondent has registered the domain name in order to prevent the owner of the trademark or service mark from reflecting the mark in a corresponding domain name, provided that the respondent has engaged in a pattern of such conduct; or
(iii) the respondent has registered the domain name primarily for the purpose of disrupting the business of a competitor; or
(iv) by using the domain name, the respondent has intentionally attempted to attract, for commercial gain, Internet users to its website or other on-line location, 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 location or of a product or service on the respondent’s website or location.
Remedies under the UDRP
In a UDRP proceeding a complainant could obtain the transfer or cancellation of the domain name in dispute. The registrars will implement the decision by an administrative panel if no claim was filed against it.
Although not an arbitration per se (if the UDRP decision is challenged, there will be a de novo hearing of the case), UDRP is an essential procedure to handle clear cases of cybersquatting.
It is a faster and less expensive mean of dealing with abusive registration of domain names than court litigation.
It also provides for a swift mechanism in terms of applicable law, as the Policy was designed to operate in a global context: even if the applicable principles have roots in trademark laws, proving a case does not require litigating over specific national laws, rather resorting to the principles developed under the Policy case law.