UDRP decision highlights lack of sanctions where complaint is clearly frivolous

An entity referring to itself as Netbank Inc of Phoenix, Arizona, has lost a complaint filed with the World Intellectual Property Organisation in relation to the domain name ‘bancanetempresarial.com’ under the Uniform Domain Name Dispute Resolution Policy (UDRP).

To be successful in a complaint under the UDRP, a complainant must satisfy all three of the following requirements:

1. The domain name is identical, or confusingly similar, to a trademark or service mark in which the complainant has rights;
2. The respondent has no rights or legitimate interests in respect of the domain name; and
3. The domain name has been registered and is being used in bad faith.

The complainant claimed that it had US and Canadian registered trademarks and also common law rights in the terms ‘netbank’ and ‘banknet’.  The respondent, Banco Nacional de Mexico, one of the largest banks in Mexico, registered the domain name on May 16 2000 and had previously used it to provide customers with direct access to the respondent's online banking services.  

To satisfy the first limb of the UDRP, the complainant contended that the domain name was confusingly similar to its NETBANK and BANKNET trademarks since the domain name was composed of ‘banca’ and ‘net’, the Spanish translations of the words ‘bank’ and ‘net’. The respondent submitted that electronic searches of the US Patent and Trademark Office and the Canadian Intellectual Property Office had not produced any registered marks for NETBANK or BANKNET in the name of the complainant. Moreover, there was no evidence that the complainant had gained common law trademark rights. The respondent also argued that there could be no likelihood of confusion with the complainant's alleged trademarks, as the addition of the term ‘empresarial’ made the domain name "graphically" and "phonetically" different. 

Addressing the second limb of the UDRP concerning the respondent's rights or legitimate interests, the complainant claimed that the respondent was making illegitimate commercial use of the domain name to mislead the complainant's customers and tarnish the complainant's trademarks through dilution. The respondent provided evidence of trademark registrations for BANCANET and BANCANET EMPRESARIAL in Mexico. It pointed out that the terms ‘netbank’ and ‘banknet’ could not be diluted, as BANCANET EMPRESARIAL was a different registered trademark and was being legitimately used by the respondent.

Turning to the third limb of the UDRP and the question of registration and use in bad faith, the complainant argued that the domain name was not in use and had been registered to disrupt the business of the complainant who was a direct competitor of the respondent in the financial field. The respondent pointed out that it had registered the domain name 13 years ago, presumably prior to the existence or incorporation of the complainant. In relation to non-use, the respondent asserted that, for security reasons, the respondent’s online banking services were currently being provided from another website and the domain name was temporarily blocked. However, the domain name had been used in the past in connection with a website providing customers with direct access to the respondent’s online banking services and it was likely that the respondent was going to reactivate this service in the future. The respondent concluded that it was the largest bank in Mexico and was not attempting to disrupt the business of anybody. In addition, it noted that there was no evidence that the complainant had been offering financial services online.

The panel easily dismissed the case based on the first limb of the UDRP alone. The complainant provided no trademark evidence and so the panel conducted its own searches of the US and Canadian trademark databases and confirmed the respondent's assertion that the complainant did not own any registered trademarks (under the UDRP, panels are able to conduct limited factual research into matters of public record if it is deemed necessary to reach the right decision, and this may include viewing online trademark databases).  Furthermore, the complainant had made no attempt to prove that it had acquired unregistered trademark rights. Therefore, the panel did not even need to consider the other two limbs of the UDRP.

What is odd about this decision is that the complainant had previously brought a case against the same respondent just over a year ago, this time with regard to the domain name ‘bancanet.com’. The facts and arguments presented were almost identical and the (different) panel also dismissed the case out of hand based on the fact that the complainant had no trademark rights. It is thus difficult to understand why the complainant decided to bring the second case as it obviously had no chance of success. Indeed, it put the respondent to the trouble and inconvenience of responding not once but twice. In situations such as this, where a complaint is clearly frivolous, the UDRP does not provide for any sanctions such as payment of a respondent's costs or a prohibition on filing further complaints, and the only potential weapon a panel has is to make a finding of reverse domain name hijacking (RDNH).

Paragraph 15(e) of the UDRP Rules provides that, if "after considering the submissions the panel finds that the complaint was brought in bad faith, for example in an attempt at reverse domain name hijacking or was brought primarily to harass the domain name holder, the panel shall declare in its decision that the complaint was brought in bad faith and constitutes an abuse of the administrative proceeding". RDNH is defined under the UDRP Rules as "using the UDRP in bad faith to attempt to deprive a registered domain name holder of a domain name".

However, a finding of RDNH would usually require a respondent to make such a request to the panel and then to prove for example that the complainant knew that it had no trademark rights (perhaps by evidence of similar conduct, such as previous groundless proceedings). If a respondent fails to make such a request, panels are able to make a finding of RDNH on their own initiative, especially where the complainant has intentionally attempted to mislead the panel by omitting material evidence. In this case, the panel would certainly have been justified in making a finding of RDNH, given the previous decision, although it is possible that the panel was not made aware of it. However, even if the panel had made a declaration of RDNH, this may not act as much of a deterrent in practice as complainants are still free to file further UDRP complaints, even with findings of RDNH against them. 

David Taylor and Jane Seager, Hogan Lovells LLP, Paris