Heartbreak hotel: UDRP complainant fails to obtain transfer of ‘villagehotels.app’

• Village Hotels sought transfer of ‘villagehotels.app’ under UDRP
• Panel found that, as domain name was registered almost one year ago, mere “Coming Soon” website was insufficient to support claim to demonstrable preparations for use in good faith
• However, complainant failed to prove that respondent had registered and used domain name in bad faith 

In a recent decision under the UDRP, a panel has refused to order the transfer of a domain name that exactly matched a complainant's trademark because the complainant had failed to prove that the respondent registered and used the domain name in bad faith, despite the fact that the complainant had succeeded in proving that the respondent had no rights or legitimate interests.

Background

The complainant was VUR Village Trading No 1 Limited t/a Village Hotels, a British owner of 30 hotels in the United Kingdom. The respondent was Puneet Malhotra, an individual based in the United Arab Emirates.

The disputed domain name, 'villagehotels.app' was registered in July 2018. It resolved to a website containing the words "Coming Soon" and “Villages and Hotels in India…". The complainant’s lawyers sent a cease-and-desist letter to the respondent in March 2019, but the respondent did not reply.

To be successful in a complaint under the UDRP, a complainant must satisfy the following three requirements under Paragraph 4(a):

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

Decision

With regard to the first limb, the complainant contended that the domain name consisted of its European and United Kingdom trademarks for VILLAGE HOTELS, registered by the complainant in 2016. The complainant also submitted that it possessed common law rights in this expression.

The panel, however, was only partially convinced by the complainant's arguments. It noted that the complainant did indeed have two registered trademarks, but decided that it did not have enough evidence to decide on whether the complainant had acquired common law rights in VILLAGE HOTELS. First of all, the panel noted that the trademark in which the complainant had rights was descriptive and, therefore, the latter was required to present detailed evidence of how it used the claimed trademark as far as common law rights were concerned. The panel underlined that the complainant's mark VILLAGE HOTELS was displayed on the complainant's website in a stylised form and that there were also numerous uses of the word ‘village’ on the complainant’s website either alone or in combination with other words. As a consequence, the panel found that the evidence of use of the trademark submitted by the complainant was insufficient to conclude that the complainant had acquired a reputation in the expression ‘Village Hotels’.  

The panel then moved on to the visual and aural comparison between the disputed domain name and the complainant's registered trademark. The panel noted that questions related to considerations that may be relevant to an assessment of infringement under trademark law, such as the scope of the trademark rights and the geographical location of the respective parties, were not relevant under the first limb of the UDRP. Finally, the panel found that the only difference between the disputed domain name and the complainant’s trademark was minor and could therefore be disregarded.

The panel thus made a finding that the disputed domain name was identical, or confusingly similar, to the complainant’s mark, and so the complainant had satisfied the first limb.

As far as the second requirement under the UDRP was concerned, the complainant pointed out that the respondent was not commonly known by the disputed domain name and was not associated with the complainant or authorised to use the complainant’s mark. According to the complainant, the respondent had not used the disputed domain name in connection with a good-faith offering of any goods or services nor made demonstrable preparations to do so. Moreover, the complainant suggested that any website or email address associated with the disputed domain name had the potential for fraud as it would be likely to cause confusion in the minds of the public that the disputed domain name was connected with the complainant in some way. The respondent rebutted these statements by underlining that he had acquired the disputed domain name because he “had plans” for an “app”. Further, the respondent also explained that he acquired the disputed domain name after expiry of the Sunrise and Early Access periods for domain names in the ‘.app’ gTLD and so the acquisition was made on the "first-come, first-served" basis.

The panel disagreed with the respondent. In the panel's view, the expiry of the Sunrise and Early Access period did not automatically confer on the respondent rights or legitimate interests under the UDRP. The panel also expressed objections as to the respondent's demonstrable preparations to use the disputed domain name in connection with a good-faith offering of goods or services. the panel found that the disputed domain name was registered almost one year ago and so the mere "Coming Soon" website was not sufficient to support a claim to demonstrable preparations for use in good faith, especially because it was not clear when this page was uploaded and no evidence was presented by the respondent as to the development of his "app".

Taking all these circumstances into consideration, the panel therefore considered that the complainant had satisfied the second limb and that the respondent had no rights or legitimate interests in the domain name.

Turning to the third requirement and bad faith, the complainant asserted that the disputed domain name prevented the complainant from registering its trademark in the ‘.app’ gTLD. Moreover, according to the complainant, the respondent had registered other domain names infringing the IP rights of third parties, such as ‘dumpster.app’. On the other hand, the respondent argued that the complainant’s business was in the United Kingdom, where the respondent had no intention to operate.

Following the reasoning under the second requirement of the UDRP, the panel excluded the respondent's claimed business plan from its considerations. Instead, the panel focused on the respondent's alleged history of infringing registrations of other domain names. The panel found that the complainant had failed to identify the IP rights of third parties that were meant to be infringed by the registration of ‘dumpster.app’. The panel also added that ‘dumpster’ was a dictionary term. The panel noted that there was no evidence that the respondent had used the complainant’s services or had visited the United Kingdom. Finally, the panel found that the disputed domain name without the gTLD was a combination of ordinary English words which were not devoid of descriptive significance in relation to hotel services.

Accordingly, the panel found that the respondent had not registered and used the disputed domain name in bad faith. Therefore, the panel denied the transfer of the domain name to the complainant.

Comment

This decision highlights how having a trademark does not necessarily mean that the rights holder will succeed in obtaining the transfer of a domain name, even if it is identical to such trademark and even if the website associated with the domain name appears to have always been inactive. This is particularly the case when a disputed domain name consists of descriptive or generic terms.

The decision also serves as a reminder of the importance of a respondent's diligence when submitting evidence of demonstrable preparations to use a disputed domain name in connection with a good-faith offering of goods or services. In practice, examples of efficient evidence under this element of the policy include business due diligence, legal advice and correspondence, credible investment in website development or promotional materials or proof of a genuine business plan utilising the domain name.