American Automobile Association fails to obtain transfer of ''

United States of America
In American Automobile Association Inc v QTK Internet (Case FA0905001261364, July 25 2009), a National Arbitration Forum panel has refused to order the transfer of the domain name '' to the American Automobile Association Inc (AAA).    

AAA sought to halt the use of the domain name '' by filing an action under the Uniform Domain Name Dispute Resolution Policy (UDRP) with the National Arbitration Forum. The action was filed some 10 years after the domain name was registered. The proceedings were heard by a three-member panel, which split on the ultimate outcome. Two panel members sided with the domain name owner, while the dissenting panellist sided with AAA. 

The majority decision refused to apply principles that categorically characterize click-through advertising as bad-faith use. While the majority recognized that AAA held valid trademark rights in the AAA mark (which it had used in commerce in the United States since 1902), and that the disputed domain name was identical to the mark, the panel refused to find that the domain name owner lacked “legitimate interests” in the domain name. The decision distinguished prior rulings holding that such advertising constituted bad faith (eg, The American Automobile Association Inc v CCG), because the domain name owner in the present case did not appear to have exploited the registered trademark AAA. 
Expressly finding the '' domain name to be desirable for “a variety of other reasons”, including bond ratings, battery size, shoe widths and as an acronym for third-party organizations, the majority found that the domain name owner may have had “a number of reasons that have nothing to do with [AAA’s] business” for registering the domain name. Furthermore, the majority determined that the pay-per-click advertisements were “generally not related to the goods or services associated” with AAA’s mark. These two factors led the panel to determine there had been no bad faith in registering the domain name - an essential element for establishing a UDRP claim. Concluding that “[b]ad faith is at its core a question of intent”, the majority found the record insufficient to prove the domain name owner’s “illicit motives” based on the factual record before the panel. 
Revealingly, one of the majority panellists focused on the delay in bringing the proceedings. The panellist recognized that while the laches doctrine does not apply to UDRP proceedings, delay in challenging a domain name is not “totally irrelevant”. The panellist noted that “the passage of such a lengthy time casts doubt” on the legitimacy of AAA’s claim of bad faith by the domain name owner. This panellist would have more than denied the AAA claim - he would have found AAA a reverse domain name hijacker.
The dissenting panellist rejected all of these arguments. He characterized the click-through advertisements as a "diversion of internet customers from [AAA’s] business", relying primarily on prior rulings to the same effect. This panellist also found that the posting for a period of time of a defamatory word on the '' website constituted tarnishment of the AAA mark. While acknowledging that this case was a “close call”, the dissenting panellist criticized the domain name owner’s business model generally and refused to give it any validity. 
The decision highlights the uncertainty that remains over whether pay-per-click advertising constitutes a use that can be characterized as bad faith for the purposes of UDRP proceedings. It also highlights the effect that delay can have on proceedings, even if the laches doctrine is not a recognized defence to domain name challenges.

In the end, the decision should stand as a cautionary tale for trademark owners that delay bringing UDRP challenges. As a practical matter, the longer the delay, the more likely there will be a heightened concern as to the legitimacy of the challenge and the greater the need for the challenger to establish a compelling set of facts - or risk losing its UDRP claim.
Rochelle D Alpert, Morgan Lewis, San Francisco

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