Lululemon obtains suspension of '.sale' domain name under URS

International

In a recent domain name dispute brought under the Uniform Rapid Suspension System (URS) before the National Arbitration Forum (NAF), a panel has ordered the suspension of a domain name under the ‘.sale’ new generic top-level domain (gTLD). The decision highlights how the URS offers quick relief for trademark holders seeking to tackle infringing domain names.

The ‘.sale’ new gTLD is one of the many new gTLDs recently launched by the Internet Corporation for Assigned Names and Numbers (ICANN) and it is aimed for both online and offline retailers and wholesalers in a wide range of industries. It was delegated into the root on December 25 2014 and became available for general registration on May 6 2015 following a sunrise period for trademark holders that opened on February 24 2015 and closed on April 25 2015. Approximately 600 domain names were registered during the sunrise period. ‘.sale’ domain name registrations have been steadily increasing since it became available for general registration, with currently over 3,500 domain name registrations.

The URS is a rights protection mechanism originally designed to provide a faster, cheaper alternative to the Uniform Domain Name Dispute Resolution Policy (UDRP) for clear-cut cases of cybersquatting under the new gTLDs. Although the substantive requirements of the URS are very similar to those of the UDRP, the URS imposes a heavier burden of proof ("clear and convincing evidence"). However, unlike the UDRP, the only remedy available is the suspension of the domain name in question for the remainder of the registration period (which may be extended for an additional year), as opposed to the transfer or cancellation of the domain name, which are remedies available under the UDRP. At the end of the registration period, however, the domain name will be allowed to lapse and may be snapped up by a third party.

In the case at hand, the complainant was Lululemon Athletica Canada Inc, an athletic apparel company based in British Columbia, Canada that was founded in 1998. The complainant was the owner of several LULULEMON and LULULEMON ATHLETICA marks used in connection with yoga apparel and related goods and services. The complainant claimed that its trademark was well known throughout the United States and the rest of the world for high-quality, premium yoga apparel and related goods and services.

The respondent was Domain Administrator, based in British Columbia. No other details about the respondent were known.

The disputed domain name was ‘lululemon.sale’. It was registered by the respondent on May 6 2015, on the first day of general availability. On May 27 2015 the complainant filed a URS complaint to obtain the suspension of the domain name. The proceedings commenced on June 3 2015 and within 15 days a decision by default was delivered in accordance with the URS Rules and Procedure.

To be able to obtain the suspension of a domain name under the URS, a complainant is required to prove each of the following three elements:

  1. the domain name is identical or confusingly similar to a word mark:

    • for which the complainant holds a valid national or regional registration and that is in current use;

    • that has been validated through court proceedings; or

    • that is specifically protected by a statute or treaty in effect at the time the URS complaint is filed;

  2. the registrant has no rights or legitimate interests in the domain name; and

  3. the domain was registered and is being used in bad faith.

The first requirement under Paragraph 1.2.6.1 of the URS requires a complainant to submit evidence of valid trademark rights. In addition, a complainant must submit proof of use of said trademark, whether by submitting evidence that the trademark has been validated by the Trademark Clearinghouse (a central repository created by ICANN) or by submitting direct proof of use.

In this regard, the examiner was satisfied that the complainant had established rights in the marks LULULEMON and LULULEMON ATHLETICA. The examiner noted that the domain name wholly incorporated the complainant's LULULEMON mark under the ‘.sale’ extension. Thus, the examiner found that the domain name was confusingly similar to the complainant's trademark. The complainant therefore satisfied the first requirement under the URS.

Turning to the second requirement under Paragraph 1.2.6.2 of the URS, the complainant was required to demonstrate that the respondent had no rights or legitimate interests in the domain name. The examiner observed that the respondent was not affiliated to the complainant in any way and nor was the respondent licensed or otherwise authorised by the complainant to make use of its LULULEMON trademarks, in a domain name or otherwise. The respondent had defaulted and so it was unable to rebut the complainant's prima facie case of lack of rights or legitimate interests. The examiner thus found that the respondent had no rights or legitimate interests in the domain name. The complainant therefore satisfied the second requirement under the URS.

Finally, the URS requires a complainant to demonstrate both registration and use of a domain name in bad faith, like the UDRP. Furthermore, like the UDRP, the URS also sets out a similar set of non-exhaustive circumstances that may be indicative of bad-faith registration and use. The examiner noted that the respondent was offering to sell the domain name for at least $12,500, which exceeded the respondent's documented out-of pocket costs relating to the domain name (the decision, however, does not reveal the circumstances surrounding the offer). In addition, the examiner also found that through its registration and use of the domain name, which wholly incorporated the complainant's LULULEMON mark, the respondent was attempting to disrupt the business of a competitor, which was evidence of the respondent's bad faith. The examiner thus found that the respondent registered and used the domain name in bad faith. The complainant therefore satisfied the third requirement under the URS.

The examiner thus found that the complainant had demonstrated by clear and convincing evidence that all three elements of the URS were met and ordered the suspension of the domain name for the remainder of its registration period. The website at ‘www.lululemon.sale’ now displays a banner stating "This site is suspended", with the text "The domain name you’ve entered is not available. It has been taken down as a result of dispute resolution proceedings pursuant to the Uniform Rapid Suspension System (URS) Procedure and Rules". There is also a link to the URS page on the ICANN website.  However, the WHOIS will continue to display the information of the respondent (except for the redirection of the name servers) for the remainder of the registration period.

It should be noted that the URS Rules, in an attempt to bring balance and protect due process rights, provide that, in default cases decided in favour of the complainant, such as the present case, the respondent will have an opportunity to file a response at any time up to six months as of the date of the notice of default, and may be entitled to request an extension of an additional six months. If, after examination, the examiner rules in favour of the respondent, then the respondent will recover full control over the domain name registration. Whilst this may be considered one of the disadvantages of the URS from a complainant's perspective, such cases will be rare and most probably unlikely to succeed.

The decision highlights how the URS is becoming an increasingly popular mechanism for trademark holders to tackle infringing domain names. Whilst the only remedy under the URS is the mere suspension of the domain name in question (as opposed to the transfer or cancellation), it offers quick and cost-effective relief for trademark holders - a complainant may obtain a decision in as quickly as a couple of weeks (as opposed to a couple of months under the UDRP) and the filing fees are considerably lower ($375 as opposed to $1,500).

Brand owners seeking quick and low-cost relief may therefore be advised to avoid the UDRP and opt for the URS, particularly if they are not particularly interested in adding the domain name in question to their portfolio. However, the URS is intended for the most clear-cut cases of cybersquatting and so domain name disputes involving more complex issues (such as fair use), are better suited to the UDRP, which affords complainants the opportunity to expand on their arguments and submit more evidence to support their claims. Thus the choice of whether to file a complaint under the URS or the UDRP should always be carefully considered, taking into account several factors including urgency, costs and potential defences. It should be noted, however, that both the URS and the UDRP complement each other and so a URS procedure does not preclude a trademark holder from subsequently seeking to obtain the transfer of a domain name under the UDRP.

Over 300 URS cases have been brought so far before NAF since it was first launched in 2013. Whilst the URS was originally designed for new gTLDs, it is proving to be a useful and cost-effective rights protection mechanism and has even been voluntarily adopted by a handful of smaller legacy gTLDs, namely ‘.travel’, ‘.pro’ and ‘.cat’.

David Taylor and Soraya Camayd, Hogan Lovells LLP, Paris

Get unlimited access to all WTR content