Importance of substantiating UDRP complaints highlighted

United States of America
In GrubHub Inc v Nelson (Claim FA1005001327153, July 20 2010), the National Arbitration Forum (NAF) has refused to order the cancellation of the domain name 'hubgrub.com' under the Uniform Domain Name Dispute Resolution Policy (UDRP).
 
GrubHub Inc, a Delaware corporation set up in 2004, provides internet users with the ability to find restaurants and order food online via its website at 'grubhub.com'. GJ Nelson, a website designer residing in Massachusetts, registered the domain name 'hubgrub.com' on June 26 2004.

On May 27 2010 GrubHub submitted a complaint to NAF with a view to obtaining the cancellation of the domain name. On June 21 2010 a response was received and determined to be complete by NAF.

To obtain the transfer or cancellation of a domain name under the UDRP, a complainant must prove each of the three following criteria:
  • The domain name registered by the respondent 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.
In order to satisfy the first limb of the UDRP, GrubHub submitted the trademark GRUBHUB, which was registered with the US Patent and Trademark Office on July 31 2004 and is owned by a Matthew M Maloney. GrubHub asserted that the domain name was confusingly similar to the trademark.

As for the second element of the UDRP, GrubHub highlighted the fact that the website to which the domain name pointed was not fully operational and, hence, could not relate to a good-faith offering of goods or services. In addition, GrubHub submitted that Nelson had no interest in the term 'hubgrub', which had no inherent meaning and did not correspond to any company, corporation or business name of Nelson.

Finally, to establish the third limb of the UDRP, GrubHub alleged that:
  • it had spent substantial resources in developing and promoting its website and brand; and
  • Nelson's website format and design was intentionally set up to mimic GrubHub's website.
In addition, GrubHub claimed that:
  • there had been actual customer confusion between 'grubhub.com' and 'hubgrub.com'; and
  • while Nelson was aware of this confusion, he had refused to take down his infringing website.
In response to these allegations, Nelson pointed out that he had no knowledge of GrubHub's trademark when it registered the domain name and that he had registered the domain name with a view to reviewing local 'grub' in Boston. Boston also has the nickname 'the hub'. In addition, Nelson asserted that there could not be any confusion between GRUBHUB and HUBGRUB, which are neither phonetically nor visually similar. Further, Nelson pointed out that:
  • he had registered the domain name before GrubHub even filed its trademark application for GRUBHUB; and
  • he could not be said to have registered the domain name for the purpose of disrupting the business of a competitor, since he was not a competitor of GrubHub.
Finally, Nelson contended that GrubHub's claim was abusive and constituted reverse domain name hijacking.

The panel denied the complaint and found that GrubHub had failed to establish any of the three required elements. First, the panel found that GrubHub had failed adequately to document its rights in the GRUBHUB mark, which is owned by Maloney. In addition, the fact that Nelson had changed the order of the two generic words 'grub' and 'hub' was likely to dispel likelihood of confusion, and GrubHub had failed to provide any evidence to the contrary.

Turning to the second limb, the panel found that GrubHub had not met the burden of proof in relation to Nelson's absence of rights or legitimate interests. As the burden of proof had not been met by GrubHub, the panel found in favour of Nelson on this point.
 
Finally, the panel dismissed GrubHub's assertion that the domain name had been registered and used in bad faith, pointing out that Nelson had registered the domain name before GrubHub began using the mark it sought to rely on.

As for the issue of reverse domain name hijacking, the panel disagreed with Nelson on the basis that, while the complaint was questionable, it did not "rise to the level of bad faith required to support a finding of reverse domain name hijacking".

Given the underlying facts, the panel's decision to deny the complaint was almost a foregone conclusion. It seems that, in this case, bringing a complaint under the UDRP may have been ill-advised. In order for a complaint such as this to succeed, it would have required very meticulous drafting and substantiating to pass muster.

While the UDRP was meant to create a streamlined process for resolving cases of cybersquatting as a quicker and less expensive alternative to a challenge via the courts, the standard of proof is higher than often thought. It is insufficient to ascertain that the three elements are met, while omitting to provide evidence to support the assertions made in the complaint.

In the present instance, it is not surprising that the complaint failed at the first hurdle, given that GrubHub omitted to provide any explanation as to how it had rights in a trademark owned by a third party.

Furthermore, given that the order of the words 'grub' and 'hub' had been changed, it was far from evident that there was confusing similarity - this would have required particular attention in drafting the complaint. In addition, the fact that the domain name had been registered before the trademark should have prompted GrubHub to provide additional evidence in terms of its rights and use of the GRUBHUB mark in the course of trade prior to the registration of the domain name.

It also seems rather incoherent for the complaint to have stated that Nelson's website was not operational and purported to be "available soon", to then state that Nelson's website format and design was intentionally set up to mimic the 'grubhub.com' website. Finally, it seems that GrubHub merely stated that there had been actual customer confusion between 'grubhub.com' and 'hubgrub.com', without providing evidence of such customer confusion.

While there are a number of cases where a domain name registration and use blatantly constitute cybersquatting, there are other instances where it is not so straightforward. Such cases will turn on how carefully drafted and substantiated the complaint was. It should also be borne in mind that a panel should not be expected to conduct investigations in order to compensate for a complaint's lack of arguments or evidence, as it would be unfair to respondents.
 
David Taylor and Vincent Denoyelle, Hogan Lovells, Paris

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