CIRA panel orders transfer based on expanded bad-faith factors

Canada
In Glen Raven Inc v Kotarac, a three-member panel under the Canadian Internet Registration Authority (CIRA) Domain Name Dispute Resolution Policy (CDRP) has ordered the transfer of the domain name 'sunbrella.ca' to Glen Raven Inc, a maker of woven fabrics for outdoor and residential furniture, marine tops and interiors, and sunshading applications.
 
Glen Raven based its complaint against the individual registrant, an apparent entrepreneur, on a long-held Canadian trademark registration for SUNBRELLA that was first registered in 1971. The individual registrant had registered the domain name in 2011 and, according to his response, was planning to launch a new consumer product under that brand. No further information was provided, however, as to the reasons for selecting the particular brand name, what the new product might be or its stage of development.
 
As the complaint was filed after August 22 2011, it was decided based on the new version of the CDRP (version 1.3) that made the CDRP more consistent with the Uniform Domain Name Dispute Resolution Policy (UDRP), notably expanding the bad-faith criteria factors.
 
Under the new version of the CDRP, Glen Raven had to establish the following elements:
  • The domain name, 'sunbrella.ca', was confusingly similar to a mark in which Glen Raven had and has prior rights. The new version of the CDRP no longer narrowly prescribed what 'rights' or 'use' of a mark were required by the complainant to qualify for protection.
  • The registrant had no legitimate interest in the domain name. Like the UDRP, the new version of the CDRP made the list of legitimate-interest factors non-exhaustive (whereas it was formerly a closed list). A related change eliminated the requirement for a registrant to have 'used' a generic or descriptive domain name to establish a legitimate interest in such a domain name.
  • The registrant had registered the domain name in bad faith. Again, the new version of the CDRP made the list of bad-faith factors non-exhaustive like the UDRP. Furthermore, the use of a domain name for commercial gain was added to the list of bad-faith examples.
With respect to the three elements, the CIRA panel concluded that Glen Raven had pre-existing rights dating back to 1971 and that its SUNBRELLA mark was identical to the domain name. Therefore, the two were held to be confusingly similar.
 
With regard to the second element, the CIRA panel rejected all six recognised grounds of legitimate interest by the registrant (1. use in good faith by the registrant; 2. a clearly descriptive phrase; 3. a generic name; 4. non-commercial use; 5. an individual’s name; or 6. a geographical name). The panel recognised that the new version of the CDRP “expands the power of panels to find a registrant’s legitimate interest that does not fall strictly within the language of the six specifically listed circumstances”. However, the panel stated that the registrant had not proved any such legitimate interest in the domain name.
 
The CIRA panel wrestled with the third element, canvassing each of the four recognised bad faith factors that were listed in the policy. The panel found no compelling evidence to suggest that:
 
  • the registrant acquired the domain name primarily to profit from its sale;
  • he had engaged in a pattern of registering other domain names that were marks; or
  • he and the complainant were competitors and the domain name was acquired primarily to disrupt the business of the complainant.
However, the panel rested on the newly introduced bad-faith factor of use for commercial gain. This new factor is reproduced below:
 
Policy 3.5(d): the registrant has intentionally attempted to attract, for commercial gain, internet users to the registrant’s website or other online location, by creating a likelihood of confusion with the complainant’s mark as to the source, sponsorship, affiliation or endorsement of the registrant’s website or location, or of a product or service on the registrant’s website or location.”
 
The panel seized on the registrant’s admission that that he was establishing a brand for a consumer product and inferred that the project was started for commercial gain, and that likelihood of confusion with the complainant was inevitable. While he had not yet created a website, the registrant did admit an intention to create a website, and it was open for the panel to find bad faith outside the list of specifically listed factors.
 
Based on its findings on confusing similarity, no legitimate interest and bad-faith registration, the CIRA panel ordered the transfer of 'sunbrella.ca' to the complainant.
 
The changes to the CDRP policy were implemented to achieve a better balance of the interests of brand owners and domain name registrants. It is interesting to note that the closer alignment of the CDRP to the UDRP should make available a large body of UDRP jurisprudence relating to the bad-faith and legitimate-interest factors. This case shows that the expansion of the bad-faith factors has provided flexibility in addressing bad-faith registrations that did not fit within the previously closed list of circumstances.

Yuri Chumak, Borden Ladner Gervais LLP

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