Not so crystal-clear case shows importance of well-drafted complaint

In a decision issued by the World Intellectual Property Organisation (WIPO) in accordance with the Uniform Domain Name Dispute Resolution Policy (UDRP), complainant Baccarat SA, a French company manufacturing fine crystal, has obtained the transfer of the domain name ‘onlinebaccarat.com’.

The domain name was registered in 2001 in the name of a US company, VirtualClicks.com. The complainant owned a number of registered trademarks around the world, including the United States. In addition, the complainant operated a website at ‘www.baccarat.fr’.

The domain name ‘onlinebaccarat.com’ pointed to a website which offered for sale a variety of products which appeared to relate to card games, gambling and jewellery. It also included a search function directing to sponsored links, as well as an offer to sell the domain name.

On February 14 2013 Baccarat filed a UDRP complaint with WIPO. To be successful in a complaint under the UDRP, a complainant must show all of the following:

• The domain name 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.

The first limb of the UDRP considers whether the domain name is identical or confusingly similar to a trademark in which the complainant has rights. The complainant relied upon its registered trademarks, its domain names, including ‘baccarat.com’, for online shopping and its reputation established over a number of years. The complainant also stated that its name and its trademarks were both famous and identified with itself by the relevant sector of the public. According to the complainant, the prefix ‘online’ was no more than a description of the nature of the service likely offered by the website at the domain name, as this term enhanced confusion by deluding visitors to the website to assume it was a website for online sales of Baccarat products.

In its response, the respondent relied upon the word ‘Baccarat’ as signifying the card game or gambling. The respondent also cited the number of hits generated by a search on the term ‘Baccarat’ and their priority listing with the predominance of gambling related sites in such hits. Therefore, according to the respondent, ‘Baccarat’ was a generic term more attributable to gaming or gambling rather than the complainant’s products. The respondent also pointed out that it registered the domain name in 2001. Finally, the respondent said that the complainant had previously failed to secure the domain name ‘baccarat.biz’ and thus that the root mark or sign ‘Baccarat’ was generic.

In addressing the first limb of the policy, the panel first considered whether the complainant had rights over the term ‘onlinebaccarat’. In this respect, having noted that the complainant had evidenced that it had rights over the term ‘Baccarat’, the panel stated that the prefix ‘online’ added nothing and served only to describe the nature of the product or service. The panel then focused on the issue of whether the respondent was correct that ‘Baccarat’ was generic or, more accurately, descriptive, describing gaming or gambling. The panel recognised that ‘Baccarat’, in and of itself, could describe and refer to the card game and likewise it can also refer to the town in France named Baccarat where the complainant was based. As such, no exclusive rights could be acquired by the word ‘Baccarat’ when used to describe or refer to the card game or the French town. The panel considered that, in the context of this case, if the term ‘onlinebaccarat’ was being used simply in association with the card game alone, the complainant would likely not have a strong case. However, the panel considered that a trademark should not be "considered in isolation and devoid of the context in which it is used".

As such, the panel noted that confusing similarity must be answered by considering the manner in which the respondent was using the domain name. The panel held that, given that the website at the domain name allowed a click-through to other sites offering for sale online crystal products but not those of the complainant, the use by the respondent was confusingly similar to the complainant's trademarks. The panel then determined that the domain name was confusingly similar to the complainant's BACCARAT trademark, noting that the card games offered by the respondent were also click-through windows to third-party sites offering crystal product for sale. Therefore, it was clear that the respondent did not itself use the domain name for the purposes of offering a Baccarat card game online.

With regard to the second limb of the three-prong test, the complainant argued that the respondent did not trade in Baccarat crystal products or services, was not known by that name, and had no association or link with the complainant. In addition, the complainant referred to and relied upon previous involvement by the respondent in adverse UDRP decisions.

The respondent claimed in turn that it had registered the domain name for 12 years. With respect to this argument, the panel noted that, although the complainant did not address the two years during which the domain name was registered via a proxy provider, the respondent did however clearly assert that it had used the domain name since 2001, so the panel decided to draw the inference that the respondent had been the owner of the domain name for over 12 years. However, the panel noted that it was unclear when the respondent started offering, even on a pay-per-click basis, access to third-party gambling or gaming sites.

The respondent further explained that its involvement in four other UDRP decisions was irrelevant - it owned over 10,000 domain names and four orders of transfer by UDRP panels was a minuscule proportion.

The panel noted that the respondent did not justify a proprietary right to the BACCARAT trademark and that it appeared to rely upon the generic or descriptive use of ‘Baccarat’ as a card game together with online offerings of access to e-versions of the game. The panel considered in any event that, as the website at the domain name included links to third-party websites, including websites offering crystal ware for sale online, the respondent could not rely upon any business or trading operation known as or by reference to the BACCARAT mark.

The panel noted that neither the complainant nor the respondent had adequately dealt with the second element of the UDRP.

This situation put the panel "in a state of equivocation". On the one hand, the consensus view as set out in Paragraph 2.1 of the WIPO Overview of WIPO Panel Views on Selected UDRP Questions, Second Edition states that the complainant is at least required to establish a prima facie case of the respondent having no rights or legitimate interests, and the panel did not seem to believe that the complainant had established such prima facie case. On the other hand, the respondent had included click-through links to third-party websites offering for sale crystal ware of manufacturers which competed with the complainant. According to the panel, the links included on the website at the domain name could not be considered legitimate use for purposes of the second element of the UDRP.

In light of this, the panel found that the respondent had no rights or legitimate interests in the domain name. Thus, the panel held that the complainant had proved the second requirement of the three-prong test as well.

Turning to the third limb of the policy, the complainant relied upon its trademark as being a famous trademark, and thus considered that the respondent must have known of this mark when it registered the domain name in 2001 and that it did so for some ulterior purpose. Furthermore, the complainant asserted that the website at the domain name enabled a visitor to access other websites selling the complainant’s competitors’ crystal products online. The complainant thus alleged that the respondent had acted in bad faith by registering the domain name for opportunistic purposes to deceive customers and to trade off the well-established reputation of the complainant.

The respondent denied registration of the domain name for the purposes of preventing the complainant from registering it. It said that this was an absurd contention. It finally said that the fact that the domain name was for sale was irrelevant and that it had sold hundreds and hundreds of domain names as part of its business.

Concerning its use of the domain name, the respondent said that this was simply the respondent using what it described as “underdeveloped domain names with professional domain name parking services which pay a share of the advertising revenue they generate”. In addition, the respondent denied any attempt to pass off or utilise the reputation and goodwill of the complainant. Finally, the respondent accused the complainant of reverse domain name hijacking.

The panel considered that the complainant did not adequately address the bad-faith issue and that it had been left to the panel to consider what approach would therefore be adopted. The panel decided to first address the issue of use in bad faith and concluded that, at the time of the filing of the complaint, the domain name was used in bad faith given the links to third-party websites offering for sale crystal products, coupled with the offer for sale of the domain name.

Regarding registration in bad faith, the panel noted that this aspect of the complaint was most unsatisfactory given the absence of direct evidence from the complainant or the respondent. In particular, the panel stated that it was a concern that the complainant had put on no direct evidence of the respondent’s intention or inferred intention when the domain name was initially registered in 2001, nor had it explained at all the delay for filing its complaint 12 years later. The panel indulgently suggested that this may be for good reason and it may be that the links to websites of the complainant's competitors on the website at the domain name were only of recent origin. However, the panel stated that it is not part of a panel’s function to speculate and, rather, it is for the parties to put on such evidence. The panel was therefore left to decide whether, regardless of purpose at assumed initial registration, subsequent renewals by the respondent could constitute registration in bad faith. According to the panel, such decision was necessary because, if the respondent indeed first acquired the domain name in 2001 and had owned it since then, there was simply no evidence for the panel to conclude that the domain name was registered in bad faith. The panel stated that the preponderance of UDRP decisions favour the view that subsequent renewals do not constitute new registrations and that there needs to be something more such as a change of registrar, sale or transfer of the disputed domain name, or repeated offers for sale. In this respect, the panel found that there was no such "something more" in this case.

In light of this finding, the panel then relied upon a previous UDRP decision, Eastman Sporto Group LLC v Jim and Kenny (WIPO Case No D2009-1688), in which the panel stated:

“If a respondent has registered a domain name for a legitimate business purpose, and another business comes along that chooses to use the same name, should he not be allowed to take advantage of that fact? The answer to that question depends upon how exactly the domain name is used. If he merely intends to continue to do what he has always legitimately done, then it is difficult to see how that continued use could be characterised as use in bad faith.”

The panel in the case at stake considered that the perfectly legitimate registration and use of the domain name became abusive at some time, but noted that "it is not stated in the [UDRP] policy that the date or time at which an original registration becomes abusive is critical". The panel thus decided to base its finding regarding registration in bad faith upon the content of the website at the time of the filing of the complaint. Therefore, the panel concluded, in its own words "by a very slender margin", that the domain name was being used for the purposes of attracting business by confusing visitors to the website into thinking that the domain name and associated website were in some way associated with the complainant or alternatively that the respondent was gaining some commercial advantage by virtue of its links to third-party websites offering for online sale crystal ware.

The complainant in this case could well have been denied transfer of the domain name on the basis that its complaint was not sufficiently documented and, more particularly because it did not sufficiently demonstrate that the domain name was registered in bad faith. Indeed the panel was under no obligation to try to find arguments in favour of the complainant. This decision therefore shows the importance of a well-drafted complaint, in particular in cases which are not straightforward as was the case here.

David Taylor and Sarah Taieb, Hogan Lovells LLP, Paris