UDRP decision highlights diverging opinions as to generic domain names

In a recent Uniform Domain Name Dispute Resolution Policy (UDRP) decision, the panel has found that, although the generic use of a domain name may give rise to a legitimate interest, the key element is bad-faith registration and use of the domain name.

The complainant was Two Way NV/SA, a company based in Belgium that is in the business of developing mobile telephone applications. The complainant planned to market an ‘app’ called Yu and acquired the Community trademark (CTM) YU (No 010214666, registered on January 25 2012). The complainant, however, had not yet launched nor commenced commercialisation of its product.

The respondent was Moniker Privacy Services of LLC of Oregon, United States. The registrant details of the respondent remain hidden. The disputed domain name was ‘yu.com’, which was acquired by the respondent on November 18 2006 from a previous owner.

The domain name resolved to a website displaying automatically generated ‘pay-per-click’ (PPC) advertising links relating to general interest goods and services, unrelated to the complainant. In addition, the website associated with the domain name also displayed an offer to sell the domain name of at least $1.67 million.

The complainant filed a UDRP complaint with the WIPO Arbitration and Mediation Centre to obtain the domain name based on its trademark rights. To be successful in a complaint under the UDRP, a complainant must satisfy all of the following three requirements:

• 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.

In the present case, the parties had agreed to resolve their dispute by a three-member panel. In such cases, each party nominates three candidates from WIPO's List of Experts to serve as co-panellist and WIPO will then choose one co-panellist from each list submitted by the parties. As for the presiding panellist, WIPO provides to the parties a list of five candidates which the parties will rank in their order of preference. WIPO will then appoint the presiding panellist taking into consideration the preferences of each party.

Concerning the three-member appointed panel, and prior to examining the three-prong requirements under the policy, it is worth noting two points raised in this decision.

The first issue concerns the complainant's request to recuse one of the members of the appointed three-member panel. Rule 7 provides that any appointed panellist:

"shall be impartial and independent and shall have, before accepting appointment, disclosed to the provider any circumstances giving rise to justifiable doubt as to the panellist’s impartiality or independence."

On the basis of this provision, the complainant questioned the impartiality of two of the panellists nominated by the other party. The complainant questioned the respondent's first nominee's impartiality on the grounds that it had “'a financial interest in as much as possible finding in favour' of counsel for respondent and its clients". In addition, the complainant also objected against the respondent's second nominee for sharing the same nationality as the respondent's counsel.

The complainant first objected against the panellist nominations by the respondent to the Arbitration and Mediation Centre. However, the centre rejected the complainant's request on the basis that the Rules do not provide for the possibility of contesting panellist nominations by a party and, furthermore, the centre considered that there was no evidence for such a claim.

The complainant then renewed its request for recusal to the appointed panel. The panel, however, noted that it had no jurisdiction to decide on the complainant's request. The panel stressed that there is no legal basis neither in the Policy, the Rules nor the Supplemental Rules to contest the appointment of a panellist and, in particular, in the case of three-member panels. The panel further noted that, in the case of a three-member panel, the UDRP was deliberately designed to allow each party to play an active role in the composition of the panel and thereby exert some influence in its composition, which according to the panel, is part of the reason why neither the Policy nor the Rules expressly provide for a mechanism that allows one party to challenge the nominations of another party.

The panel thus concluded that, in view of the absence of any provision in the Policy, the Rules and the Supplemental Rules, the issue of panel recusal was not within its jurisdiction.

The second issue worth noting is that, whilst the three-member panel seemed to agree on the result of the case (to deny the transfer of the domain name), it was unable to reach an agreement as regards to the reasoning of its decision, to the extent that the presiding panellist indicated that he no longer wished to be associated with the panel and that the remaining members issued their own separate opinions for the second and third prong of the test.

Turning to the first limb of the three-prong test, the panel found that the complainant's CTM registration was sufficient to establish that it had trademark rights in the name Yu. The panel noted that, whilst the complainant's trademark post-dated the registration of the domain name, such fact is immaterial for the purpose of the first limb of the test, although it may be relevant for the second and third limb of the Policy.

Having established that the complainant had rights in the name Yu, the panel went on to examine whether the domain name was identical, or confusingly similar, to the complainant's rights. It is well established that the suffix ‘.com’ is irrelevant when assessing the identity or confusing similarity between a trademark and a disputed domain name, and so the panel also found that the domain name was identical to said trademark. The panel thus held that the complainant had met the first limb of the three-prong test.

With regard to the second limb of the test, whilst the complainant argued that the respondent had no rights or legitimate interests in the domain name given that the PPC links were "unrelated to the generic meaning of the disputed domain name", the respondent claimed that the domain name consisted of a common Chinese surname, Yu, and that the registration of common terms was "a common and permissible business practice" that generated a legitimate interest.

Whilst one of the members of the panel (Andrew Christie) considered that the respondent had no rights or legitimate interests in the domain name, the other disagreed (Hon Neil Brown).

In particular, panellist Christie considered that the respondent did not have any rights or legitimate interest in the domain name given that the PPC links on the website associated with the domain name were not "genuinely related to the meaning of the family name Yu and thus agreed with the complainant's reasoning. The panellist relied on the WIPO Overview of WIPO Panel Views on Selected UDRP Questions, Second Edition, namely Paragraph 2.2 which provides that domain names consisting of generic or common terms may generate a legitimate interest provided that the domain name is "genuinely used or at least demonstrably intended for such use in connection with the relied-upon meaning (and not, for example, to trade off third-party rights in such word or phrase)".

Panellist Christie also partially cited Paragraph 2.6, which provides that:

"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."

However, the following condition was omitted from the citation:

"provided there is no capitalisation on trademark value (a result that PPC page operators can achieve by suppressing PPC advertising related to the trademark value of the word or phrase). By contrast, where such links are based on trademark value, UDRP panels have tended to consider such practices generally as unfair use resulting in misleading diversion."

This is exactly the point raised by panellist Brown, who was of the opinion that domain names consisting of generic or common terms may generate a right or legitimate interest "provided that [the domain name] is not used to target a trademark or its owner or to engage in other inappropriate conduct that is deleterious to the complainant". The panellist relied on a series of prior UDRP cases, in particular Altom v Domain Administrator, PortMedia (WIPO Case D2012-1326), which had a similar set of facts.

According to panellist Brown, it is essential to examine whether the respondent was aware of the complainant or its rights, or that it was targeting the complainant or its rights. In the present case, however, he found that there was no evidence of awareness of the complainant by the respondent, particularly given that the domain name was registered long before the complainant had acquired trademark rights in the name and before it had even started its business.

Furthermore, panellist Brown also noted - and contrary to panellist Christie's opinion - that the fact that the website associated with the domain name displayed links to generic sites promoting general goods and services, and thus not related to the meaning of the name Yu, did not suggest an absence of a legitimate interest, as long as there was a generic use of the domain name. Thus, panellist Brown held that the respondent's generic use of the domain name gave it a legitimate interest in the domain name.

Thus, whilst panellist Christie found that the respondent did not have any rights or legitimate interest in the domain name because the links on the website associated with the domain name were not related to the family name Yu, panellist Brown found that the respondent had a right or legitimate interest in the domain name because there was a "generic use of the domain name". However, given that both panellists agreed that the respondent did not register and was not using the domain name in bad faith, as discussed below, whether or not the respondent had a right or legitimate interest did not have an impact on the outcome of the decision.

Turning to the third limb of the policy, the complainant argued that:

1. the website associated with the domain name was being used as a parking page displaying PPC links;
2. the respondent was offering for sale the domain name at an excessive price;
3. the respondent was concealing its identity by means of a privacy shield; and
4. the respondent failed to reply to the complainant's cease and desist email requesting to reveal the underlying registrant's details.

In turn, the respondent argued that the domain name was acquired long before the complainant had even applied for its trademark YU. Thus, the respondent asserted that it was impossible to have the complainant in mind when it registered the domain name. In addition, the respondent contended that there was no evidence of bad-faith use of the domain name.

Whilst both panellists found that the complainant had failed to prove registration and use in bad faith, they again delivered separate opinions in this regard.

Panellist Christie held that the complainant had failed to establish the existence of any of the circumstances indicating bad-faith registration and use pursuant to Paragraph 4(b) of the Policy. In addition, he noted that, although circumstances other than those set in Paragraph 4(b) may be indicative of bad faith, none of those invoked by the complainant were sufficient to support a finding of bad-faith registration and use. In particular, panellist Christie held that the respondent's failure to correctly identify its identity was not, by itself, sufficient evidence of bad-faith registration and use of a domain name. According to the panel, "for 'other circumstances' to justify the award of a remedy, they must be of a level of gravity proximate to the level of gravity of the circumstances specified in Paragraph 4(b)".

Whilst concurring with panellist Christie's reasons to reject a finding of bad-faith registration and use of the domain name, panellist Brown further added that, in the present case, it was impossible to see how the respondent could have been motivated by bad faith, given that at the time of registration of the domain name, the complainant had not even applied for a trademark and had not even started its business.

In relation to the respondent's failure to provide correct identification details, panellist Brown noted that:

"although a UDRP action is nominally brought against the domain name registrant, in practice it is brought against the domain name – ie, effectively it is an action in rem, not in personam. The correct description of the registrant is thus not of the significance or importance given to it by those who might say bad faith has been made out in this case. It was certainly not regarded by those who drew the UDRP as a ground of bad faith, as it is not specified as such and nor does it fit easily under the other circumstances category. It may be a breach of the registration agreement and consequences may flow from it if the registrar takes action against the registrant. But that does not make it a form of bad faith, as the registrant may have had its own reasons, good or bad, for the incomplete description and yet such a shortcoming may not amount to bad faith."

The panel denied the complaint and, surprisingly, did not make a finding of reverse domain name hijacking.

This decision is interesting in that a three-member panel was appointed but, although the panel seemed to agree on the result of the decision, it was unable to reach an agreement as regards to its reasoning, with the result that the presiding panellist disassociated himself from the panel and the remaining members issued their own separate opinions. In particular, this decision also highlights that there are diverging opinions among UDRP panellists as regards to the use of common or generic domain names, which brings an element of uncertainty for complainants. However, as demonstrated by this case, whether the respondent has a legitimate interest or not, the decisive element in such cases seems to be whether the domain name was registered and used in bad faith and, in such circumstances, awareness of the complainant's trademark rights seems to be the key element taken into consideration by UDRP panellists.

David Taylor and Soraya Camayd, Hogan Lovells LLP, Paris