Starbucks prevails in UDRP dispute despite delay in filing

In Starbucks Corporation v Freeman, a three-member World Intellectual Property Organization panel has ordered the transfer of two domain names despite the respondent's claim that the complainant waived its rights by knowingly waiting several years before initiating the proceeding.

Starbucks Corporation has sold coffee and related products for 30 years under the STARBUCKS brand, and operates 5,000 retail outlets worldwide. It began selling a coffee drink under the mark FRAPPUCCINO in 1995. It also owns a US registration for the mark STARBUCKS COFFEE. Duncan Freeman registered the domain name 'starbuckscoffee.com' in April 1997 and 'frappuccino.com' in October of that year. Both domain names were registered with Network Solutions Inc (NSI), the sole registrar of '.com' top-level domains at that time.

In January 1998 Starbucks wrote to Freeman and objected to his unauthorized registrations. Over the next several weeks the parties exchanged correspondence, but no resolution was reached. Therefore, Starbucks resorted to NSI's domain name dispute resolution policy to obtain the suspension of the registrations as (i) the Uniform Domain Name Dispute Resolution Policy (UDRP) was not yet available, and (ii) NSI's policy did not allow it to seek the domain names' transfer. The domain names remained suspended until NSI's dispute resolution policy was replaced with the UDRP in February 2000. All domain names suspended pursuant to NSI's policy were then released. At this point, Freeman again took possession of the disputed domain names. However, Starbucks did not file a UDRP complaint until April 2003.

In his response to the UDRP complaint, Freeman claimed that he registered the domain names for use in connection with a non-commercial website about coffee and related products. He also noted that three years had passed since NSI released the domain names and approximately five years had elapsed since Starbucks first learned of the registrations. Freeman contended that the delay meant that Starbucks had waived its rights and should therefore be prevented from challenging his ownership of the domain names.

The panel rejected Freeman's arguments. While it recognized the defences of laches, acquiescence and estoppel pursuant to 15 USC § 1115(b)(9), it indicated that it is unclear whether these equitable defences apply under the UDRP. For the sake of argument, however, the panel held that, for Freeman to be able to claim estoppel, he would need to demonstrate that:

• Starbucks's delay in taking action was inexcusable;
  
  
• Freeman made a reasonable conclusion that the delay implied consent; and
  
  
• Freeman had relied, to his detriment, on Starbucks's delay.

The panel held that Freeman was unable to demonstrate any detrimental reliance and, given that Starbucks had put Freeman on notice of its trademark rights and objections, it would be unreasonable to conclude that Starbucks consented to the registrations. After denying Freeman's equitable defence, the panel applied the UDRP to the facts and held that Freeman had registered and used the domain names in bad faith. Accordingly, it ordered their transfer to Starbucks.

While the panel was somewhat ambivalent as to whether the equitable principles of laches, acquiescence and estoppel apply to UDRP proceedings, the Starbucks decision should make it more difficult for a domain name registrant to claim detrimental reliance after it has received notice of the trademark owner's rights and objections, even if that notice came several years before the filing of a UDRP complaint. Of course, the more prudent approach for trademark owners is to remain vigilant and identify potential conflicts to prevent infringers from even being able to raise a claim for laches, acquiescence or estoppel.

James R Davis, Arent Fox Kintner Plotkin & Kahn PLLC, Washington DC