Complainant found guilty of reverse domain name hijacking

In a particularly long decision issued by the National Arbitration Forum (NAF) in accordance with the Uniform Domain Name Dispute Resolution Policy (UDRP), a provider of pet transportation services, Airpet Animal Transport Inc, was denied the transfer of the domain name ‘petexpress.com’ for failing to prove both the absence of rights or legitimate interests and the bad faith of the respondent, Marchex Sales Inc. Both parties were based in the United States.

As part of its business, in 2004 the respondent purchased a portfolio of domain names, including ‘petexpress.com’, from a company named Ultimate Search for $165 million. Ultimate Search had registered the domain name itself in 2002. The respondent was using the domain name to display links to third-party websites, including the complainant's competitors. The complainant claimed that it had provided pet transportation services since 1978 using the term ‘pet express’ and offered its services both within the United States and internationally.

On November 6 2012 the complainant filed a UDRP complaint with NAF.

To be successful in a complaint under the UDRP, a complainant must evidence all of the following:

• The domain name registered is identical, or confusingly similar, to a trademark or service mark in which the complainant has rights;
• The respondent has no rights or legitimate interests in respect of the domain name; and
• The domain name has been registered and is being used in bad faith.

With regard to the first element of the UDRP, the complainant submitted that it had held a federally registered trademark in the United States, issued in 2011 as a result of an application filed in 2009, and also had common law trademark rights going back to 1978. The complainant submitted that the domain name included its entire trademark, while adding only the ‘.com’ top-level domain and removing the space between the terms ‘pet’ and ‘express’.

The respondent argued that the complainant did not exist prior to April 2005, according to the California Secretary of State, and that "[t]he complainant was, most assuredly, not doing anything since 1978" since "[n]owhere does the complaint claim any connection with a predecessor in interest in relation to the alleged mark, and nowhere does the complaint refer to or show an assignment of such alleged rights from a predecessor in interest".

The respondent also noted that the complainant's trademark registration for PET EXPRESS long post-dated the acquisition of the domain name by the respondent. In addition, the respondent explained at length that the trademark PET EXPRESS had been filed under Section 2(f) of the Lanham Act, which deals with trademarks that have become distinctive as a result of use, but was deemed inherently descriptive by the USPTO. The complainant did not contest this, but instead proceeded to file a declaration stating that the date of acquired distinctiveness was March 17 2011. In addition, the respondent pointed out that a number of other parties were using the term ‘pet express’ in connection with pet transport and pet-related services, and that the complainant's use could therefore not be said to be "substantially exclusive", as required to establish acquired distinctiveness under Section 2(f) of the act.

As far as the complainant's common law rights were concerned, the respondent argued that nowhere in the complaint had the complainant adequately evidenced that the trademark had acquired secondary meaning, other than in its declaration to the USPTO referring to a date in 2011. The complainant provided no documentary evidence and relied solely on an affidavit written by one of its directors, Mark Botten. According to the respondent, this affidavit was vague and inadequate, leading the respondent to wonder whether Botten had "profound neurological issues", or whether his declaration was simply unreliable. In short, Botten claimed to have "personal knowledge" dating back to 1978, but only began to work for the complainant when it was formed in 2005, and did not explain which entity had supposedly conducted the activities in question before this time.

The complainant subsequently countered that the business was founded in 1969 by a Jerry Mishler and that there had been a series of subsequent assignments of the goodwill, culminating in the complainant's purchase of the Pet Express business in 2005. Unfortunately, the respondent then produced a declaration by Mishler stating that he had only sold various assets and was still conducting business under the name Action Pet Express. In addition, Mishler believed that the term ‘pet express’ was descriptive and was aware that many businesses were using it in connection with pet transportation, including his.

The panel found that the complainant was the owner of the USPTO trademark registration for the PET EXPRESS mark and that panels have held USPTO registration of a trademark to be sufficient to demonstrate rights in a trademark, and that those rights extended back to the date that the registration was filed, in this case November 2009.

The panel then determined that the domain name was identical to the complainant's PET EXPRESS mark, noting that the deletion of a space and addition of a top-level domain do not cause a domain name, which is otherwise nothing more than a complainant's trademark, to be anything other than identical to the trademark in question.

To establish the second requirement of the UDRP, the complainant argued that:

• the respondent was not authorised to use the PET EXPRESS mark;
• the respondent used the domain name to promote competitive products;
• the respondent registered and used the domain name to attract internet users to its website for commercial benefit;
• the respondent had no legitimate right to use the PET EXPRESS mark given that it was neither a generic nor a descriptive term;
• the respondent had not been commonly known by the domain name;
• the respondent's use was not a legitimate non-commercial or fair use, without intent to profit; and
• the respondent used the domain name in a manner that was confusingly similar to the PET EXPRESS mark, falsely suggesting to consumers that a relationship existed between the parties.

The respondent defended itself by arguing that the complainant had not shown that, as of 2004 when the respondent acquired the domain name, it had acquired secondary meaning in the term ‘pet express’. The respondent further claimed that it had been legitimately using the domain name for far longer than any established trade or service mark claim proven by the complainant, in connection with pet-related goods and services, including pet transportation services. The respondent also asserted that the complainant presented no evidence of substantially exclusive use or of consumer recognition.

Noting that "the parties have spent a great deal of time and effort arguing about who has superior rights to the mark", the panel stated that such a decision was beyond its jurisdiction and simply found that the complainant had not established a prima facie case in support of its arguments that the respondent lacked rights and legitimate interests in the domain name.

Regarding the issue of registration and use in bad faith, the complainant pointed out that the respondent offered the domain name for sale for $50,000 and that the respondent was a "professional cybersquatter" and as such "[was] no stranger to UDRP proceedings".

The respondent claimed that its willingness to sell the domain name for $50,000 was not a demonstration of bad faith. The respondent argued that it spent $165 million on the purchase of a number of domain names, including the domain name at issue because of its valuable descriptive nature, and thus the asking price for the domain name was not unfounded. The respondent further argued that it had developed a history of good-faith registration and use of domain names and had prevailed in all but three instances of the nearly two dozen UDRP proceedings to which it had been a party.

The respondent additionally claimed that its good faith was clear, given the fact that its registration of the domain name pre-dated the complainant’s PET EXPRESS trademark application.

Lastly, the respondent asserted that the complainant had misrepresented numerous facts in the complaint and associated declarations. According to the respondent, the personal knowledge alleged by Botten was "blatantly false as he was not living in the United States or employed by the (non-existent) complainant prior to 2005". According to the respondent:

"The complainant’s behaviour here should shock the conscience […] The complaint reeks with the stench of violation of the UDRP certification, misleading and objectively false allegations concerning the complainant’s claimed pre-existence activities, omission of evidence of the prior correspondence between the parties, and what appears to be direct perjury. The complaint is such a kettle of wrong, that the respondent is comfortable to permit this panel to pick its favourites from it."

The panel found that the respondent had not registered and used the domain name in bad faith. With respect to the respondent's offer to sell the domain name, the panel stated that a willingness to sell a domain name, especially when a respondent had a legitimate interest, was not indicative of bad faith. Concerning the fact that the respondent had been involved in "nearly two dozen UDRP proceedings", the panel considered that "each case must be judged on its merits" and that the fact that the respondent was a frequent party to UDRP proceedings was "immaterial".

The panel noted that the complainant threatened to file a UDRP complaint in 2009 and then acquired formal trademark rights to bolster its case and that it did not disclose the respondent’s use of the trademark in its trademark application.

Finally, regarding the complainant's submissions, the panel found that:

• the complainant "was conclusory in its initial submission (and that is being charitable)";
• the complainant’s claims were not possible because it was not formed until 2005; and
• the complainant chose not to disclose the fact that the domain name was registered to the respondent when filing a trademark application with the USPTO, presumably to improve its chances in registering the trademark and in prevailing in a UDRP.

In light of the above, the panel not only denied the complainant's request to obtain a transfer of the domain name, but also found that the complaint was an abuse of the UDRP administrative procedure, otherwise known as ‘reverse domain name hijacking’. Such findings are rare (even though they do not entail any negative consequences for a complainant, apart from sullying its reputation with the implication of underhand behaviour), which indicates the level of the panel's disapproval of the complainant's submissions in this case. Taken at face value, the complaint itself was relatively convincing, and had the respondent not been a large corporation able to vigorously defend itself using experienced lawyers, the complainant may well have succeeded in obtaining a transfer order, hence why panels in such cases are keen to publically sanction such behaviour.

David Taylor, Sarah Taieb and Jane Seager, Hogan Lovells LLP, Paris