Transfer of domain name ownership held to constitute 'cyberflight'

International
In Isoterm AS v BusinessService Ltd (Case D2009-1376, April 19 2010), Isoterm AS, a Norwegian company, has won a complaint filed with the World Intellectual Property Organization in relation to the domain name 'isoterm.com' under the Uniform Domain Name Dispute Resolution Policy (UDRP).
 
Isoterm is in the business of producing frost-proof pipes. It started operations in 1971 and, since that time, has obtained Norwegian and Danish trademark registrations for ISOTERM. It is also the registrant of the domain name 'isoterm.no' and exports its products to several European countries. However, it discovered that a company, BusinessService Ltd (the first respondent), which is established in Russia, had registered the domain name 'isoterm.com'. Isoterm attempted on various occasions to communicate with the first respondent, but in vain.
 
In order to be successful in a UDRP procedure, a complainant must establish that:
  • 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 registrant has no rights or legitimate interests in the domain name; and
  • the domain name has been registered and is being used in bad faith.
In response to Isoterm's assertions that the three requirements of the UDRP were met, the first respondent filed a procedural response where it indicated that it did not agree with being part of the proceedings. The first respondent alleged that it had transferred the domain name to FirmaOnline Ltd (the second respondent) before being notified of the complaint.
 
However, according to Isoterm, the transfer had taken place after the first respondent had been notified of the complaint. Thus, this was a clear case of 'cyberflight', a practice where the information relating to the registrant is altered or the disputed domain name transferred to a third party just after the registrant of record is notified of the filing of a complaint for the recuperation of the domain name.
 
The respondents submitted that the agreement for the transfer of the domain name had been concluded before the first respondent was notified of the complaint, but that the domain name was transferred only after such notification due to a delay on the part of the registrar. The first respondent also tried to rebut the cyberflight allegation by stating that it was under financial difficulties and needed to sell off a large number of domain names to compensate its losses, but not to gain profit.
 
This did not convince the panel, which decided that:
  • the transfer of ownership constituted cyberflight; and
  • both the first and the second respondent were proper respondents.
Establishing the first prong of the UDRP did not prove difficult for Isoterm, given that the ISOTERM mark was exactly reproduced in the domain name. Although the respondents alleged that the trademark ISOTERM was a combination of two generic terms, 'isolation' and 'thermal', the panel pointed out that it had no jurisdiction to decide the validity of trademark registrations. However, the panel did have the ability to decide whether 'isoterm' constituted a generic word, and found that ISOTERM was a distinctive mark.
 
Concerning the second element of the UDRP, Isoterm asserted that six main issues prevented a finding of legitimate non-commercial or fair use of the domain name:
  • The first respondent was the holder of over 800 domain names;
  • The first respondent had already lost several UDRP domain name disputes;
  • There was no other use of the domain name 'isoterm.com' apart from offering it for sale on the website;
  • The first respondent never responded when it was contacted by Isoterm;
  • The trademark ISOTERM was distinctive; and
  • The first respondent transferred the domain name to the second respondent to avoid proceedings.
The panel explained that it was more likely than not that the first respondent knew about Isoterm's trademark at the time of registration of the domain name. In the panel's view, a simple Google search would have alerted the first respondent of the existence of Isoterm and its trademarks.
 
The panel then considered the use of the domain name, both at the time of the filing of the complaint (when the domain name was pointing to a website offering the domain name for sale with a starting bid of $7,220) and after the transfer to the second respondent (which had used the domain name to provide sponsored links). The panel also underlined that the first respondent's submission that it was never contacted by Isoterm did not appear to be correct, as Isoterm presented copies of its communications to the first respondent.
 
On the basis of these elements, the panel found that:
  • the respondents had failed clearly to prove their rights or legitimate interests in the domain name; and
  • there was no evidence the respondents had used the domain name in connection with a good-faith offering of goods and services.
Turning to the third criterion under the UDRP, Isoterm submitted that the domain name had been registered long after Isoterm had started operations and that the respondents had knowledge of Isoterm's trademarks. Isoterm also argued that the first respondent's intention when registering the domain name was to sell it for a profit. Both the cyberflight and the fact that the first respondent was the holder of over 800 domain names were further indications of bad faith.
 
In this respect, the respondent had submitted that:
 
"en masse registration of domain names that consist of generic, common or descriptive terms, if supported by proven legitimate interest and rights and absence of bad faith, is recognized both by UDRP panels and Russian arbitration courts as a legitimate practice".
 
In the panel's opinion, the first respondent had clearly engaged in a pattern of bad faith by registering 800 domain names that incorporated trademarks that belonged to third parties. Taking this into account, along with the overall circumstances of the case, there was sufficient evidence of bad faith on the respondents' part.
 
The first respondent claimed that Isoterm was trying to create a likelihood of conspiracy by bringing the complaint against both respondents and that this constituted abuse of procedure. The panel found that, to prevail on a reverse domain hijacking case, a respondent must show that the complainant knew of the respondent's unassailable right or legitimate interest in the disputed domain name, or of the clear lack of bad-faith registration and use, and nevertheless brought the complaint in bad faith. The panel thus denied the request for a finding of reverse domain name hijacking and ordered the transfer of the domain name to Isoterm.
 
David Taylor, Hogan Lovells LLP, Paris

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