CDRP 'bad-faith' test wider than first thought

Two decisions issued under the Canadian Internet Registration Authority Domain Name Dispute Resolution Policy (CDRP) may help to clarify its 'bad-faith' test. The panellist in one case held that trademark infringement alone was sufficient evidence of bad-faith registration, while in the other, a clear lack of a legitimate interest in a domain name was found to constitute bad faith.

The CDRP is based on the Uniform Domain Name Dispute Resolution Policy (UDRP). However, many trademark lawyers have suggested that its scope is narrower than that of the UDRP. The bad-faith requirement is markedly different to the test set out in the UDRP, where bad faith can be demonstrated in a variety of ways and the categories are not exclusive. In contrast, Paragraph 4.1 of the CDRP provides that bad faith exists "if, and only if," on a balance of probabilities, the registrant registered the domain name:

• primarily for the purpose of selling, renting, licensing or otherwise transferring the registration to the complainant or a competitor of the complainant for valuable consideration in excess of the registrant's actual costs;
  
  
• in order to prevent the complainant from registering the domain name, and there is a pattern of registering domain names belonging to others; or
  
  
• primarily for the purpose of disrupting the business of the complainant where the complainant is a competitor of the registrant.

Gathering the necessary evidence to prove bad faith under the CDRP has presented a significant challenge. The time for assessing whether or not bad faith exists would seem to be the date on which the domain name was registered. Proving the motives of another party at some time in the past is difficult. Fortunately for trademark owners, the panellists in Elysium Wealth Management Inc v Driscoll and Biogen Inc v Xcalibur Communication may have widened the CDRP's 'bad-faith' test.

In the Elysium Case, the panellist found that the registrant, Driscoll, and the complainant, Elysium, are competitors. There was no evidence to suggest that Driscoll knew of Elysium's trademark CEO FUND at the time he registered 'ceofunds.ca'. Nevertheless, the panellist held that the fact that the domain name was being used by one of Elysium's competitors infringed its exclusive rights to use the mark under Section 19 of the Trademarks Act. This trademark infringement alone, divorced from any actual intent, was held to be sufficient proof of bad faith.

In the Biogen Case, the panellist found that because the registrant, Xcalibur, had no legitimate interest in 'biogen.ca', combined with the facts that (i) Biogen's mark is a coined word, and (ii) Xcalibur had failed to respond to the complaint, it was aware of the BIOGEN mark before registering the domain name and, therefore, had done so in bad faith. This implies that registration without a legitimate interest in a domain name may constitute bad faith for the purposes of the CDRP.

For a comparison of the CDRP and UDRP see Domain name dispute resolution policies compared.

R Scott MacKendrick and Mark Edward Davis, Ogilvy Renault, Toronto