Mere lack of UDRP success insufficient to constitute reverse domain name hijacking

International

Complainant Co-Ro Food A/S, a Denmark-based company active in the business of producing flavourings, has lost a complaint under the Uniform Domain Name Dispute Resolution Policy (UDRP) with the World Intellectual Property Organisation (WIPO) against Moniker Privacy Services, a Whois privacy service based in Florida, and Domain Administrator, a company based in Hong Kong (collectively the respondent) concerning the domain name ‘sunjoy.com’. The complainant failed to establish the respondent’s lack of rights or legitimate interests and bad faith in accordance with Paragraphs 4(a)(ii) and 4(a)(iii) of the UDRP.

The domain name was registered on May 13 2002. It was used in connection with a website containing pay-per-click (PPC) advertising links. Given that the domain name incorporated the complainant's trademark SUNJOY in its entirety, the complainant decided to file a complaint under the UDRP seeking transfer of the domain name.

To be successful in a UDRP procedure, a complainant must evidence that:

  • 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. 

Concerning the first limb of the UDRP, the complainant owned the Community trademark SUNJOY. The proof of the domain name being identical to the complainant's trademark was thus easily satisfied. The panel also explained that the issue of whether the complainant had registered its mark well after the respondent registered the domain name was irrelevant in deciding whether the first condition of the UDRP was fulfilled.

With regard to the second limb of the UDRP, the panel found that the complainant had failed to establish a prima facie case that the respondent lacked rights or legitimate interests in the domain name. Although the panel admitted that the term ‘sunjoy’ was not a common or descriptive English term, it nevertheless consisted of the two common descriptive English terms ‘sun’ and ‘joy’ and, in the panel's view, the complainant's mark could not prevent others from using these two words or the combination of these words in their generic and descriptive sense. According to the panel, the mere fact that a domain name is being used to point to a website containing PPC links could not constitute proof in itself that a respondent lacked legitimate interests when these links were merely related to the descriptive meaning of the term incorporated in such domain name. The panel explained:

"the disputed domain name’s value derives from its generic nature rather than a possible specific trademark value and, hence, the PPC business model of the respondent corresponds to a legitimate interest in the disputed domain name."

The panel thus followed the view of the majority of UDRP panels - summarised in Paragraph 2.6 of the WIPO Overview of WIPO Panel Views on Selected UDRP Questions, Second Edition (WIPO Overview 2.0) - according to which "panels have generally recognised that use of a domain name to post parking and landing pages or PPC links may be permissible in some circumstances" and, "as an example of such permissible use, where domain names consisting of dictionary or common words or phrases support posted PPC links genuinely related to the generic meaning of the domain name at issue, this may be permissible and indeed consistent with recognised sources of rights or legitimate interests under the UDRP, provided there is no capitalisation on trademark value".

Turning to the third limb of the UDRP, the complainant once again failed to prove any of the circumstances set out by the UDRP to support a finding of bad-faith use and registration. The panel pointed out that:

  • the complainant’s mark was registered for the first time on February 5 2010, whereas the domain name was registered by the respondent on May 13 2002; and
  • the complainant had not provided proof that it owned any unregistered or common law trademark rights in the term ‘sunjoy’ at the time the domain name was registered, nor any reference which would have led the panel to believe that unregistered or common law trademark rights existed at that time.

In the panel's view, such lack of proof or information was a clear indication on the complainant's part that it did not own any trademark rights at the time the domain name was registered. The panel concluded that "since the complainant did not have any trademarks rights in the word ‘sunjoy’ in 2002… the registration could not have been in bad faith vis-à-vis the complainant".

Interestingly, although the panel had already concluded that the registration of the domain name could not have been made in bad faith - and, therefore, that the third limb of the UDRP was not fulfilled - it nevertheless thought necessary to explain that, since the complainant and the respondent were active in two different areas of business, "no disruption of business could be caused by the respondent’s use of the disputed domain name". The panel added that the issue of whether the registration of the domain name might have infringed trademark rights of third parties, in response to the complainant's contentions, was irrelevant for the present proceeding.

The panel then assessed the respondent's argument that the complainant had brought the complaint in an attempt at reverse domain name hijacking. On that point, the panel reiterated that:

"in order for a respondent to prevail on such a claim, it must show that a complainant knew of the respondent’s unassailable rights or legitimate interests in the disputed domain name or the clear lack of bad-faith registration and use, but nevertheless brought the complaint in bad faith."

The panel went on to explain that the onus of proving such bad faith is on a respondent, and that "mere lack of success of a complaint is not of itself sufficient to constitute reverse domain name hijacking". The panel was satisfied that the respondent had not established that the complainant had acted in bad faith in the present case since, although the domain name had been registered before the complainant acquired trademark rights in the term ‘sunjoy’, in the complainant’s view, the respondent's business of collecting generic domain names and connecting them to PPC websites did not provide the respondent with any rights or legitimate interests in the domain name. It would thus seem that a complainant making genuine plausible legal arguments in order to defend its case will not generally be found liable for reverse domain name hijacking, even though these arguments are in fact ultimately rejected by a panel.

David Taylor and Jane Seager, Hogan Lovells LLP, Paris

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