UDRP decision shows fine line between domaining and cybersquatting

International

In Electronic Arts Inc v Abstract Holdings International LTD (Claim No FA1111001415905, January 4 2012), US company Electronic Arts Inc has lost a case filed under the Uniform Domain Name Dispute Resolution Policy (UDRP) in relation to the domain name ‘ssx.com’. SSX (short for Snowboard Super Cross) is an award-winning snowboarding computer game that was developed by Electronic Arts in 2000. The domain name itself was registered on March 2 2000. A three-member panel from the National Arbitration Forum (NAF) ruled that the current registrant, Abstract Holdings International, a professional domaining company, was allowed to retain ownership of the domain name, acquired by it as part of a bulk purchase on October 5 2011.

To be successful in a complaint under the UDRP, a complainant must evidence that:

  • the domain name is identical, or confusingly similar, to a trademark or service mark in which it 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 panel was satisfied that the complainant had established the first requirement. Evidence of the registrations for its SSX mark, as well as proof of first use on October 17 2000, was enough to convince the panel that the domain name was identical to the complainant's mark. It was irrelevant under the first limb that the registration of the domain name pre-dated registration of the complainant’s mark, as the relevant date of acquisition was the date in 2011 when the domain name was actually acquired by the respondent.

In relation to the second requirement of the UDRP, the complainant failed to make a prima facie argument showing that the respondent had no rights or legitimate interests in the domain name. This was because the respondent was a professional domainer, and the buying and selling of generic domain names is considered in certain circumstances to be a good-faith offering of goods and services resulting in rights and legitimate interests. The respondent submitted evidence that it had paid $200,000 for a portfolio of generic domain names containing the domain name. In this regard, the fact that the trademark was comprised of only three letters and that a number of companies held rights in the same name or acronym prevented the complainant from being able to assert a monopoly in the term ‘SSX’, and it only had limited ownership rights.

Turning to the third prong of the UDRP, the panel pointed out that, since the respondent had legitimate interest in the domain name, there was no reason to examine the possibility of registration and use in bad faith. However, the panel went on to examine this anyway, and the complainant failed again on the basis that mere assertions of bad faith are generally insufficient. In particular, the respondent did not violate any of the factors listed at Paragraph 4(b) of the UDRP or demonstrate any other conduct that could constitute proof of bad faith. Lack of diligence did not amount to bad faith in this particular case.

The panel found that there was no attempt by the respondent to “target” the complainant’s trademark or to capitalise on the goodwill associated with it. In these circumstances, subsequent use of the domain name to obtain ‘click through’ revenue was insufficient to demonstrate bad faith. The panel also observed that the respondent had never offered to sell the domain name specifically to the complainant - the offer was automatically generated on the corresponding website and the respondent would equally have sold the domain name to the complainant or to any other person at any time. The panel thus denied the complaint.

It is clear that the nature of the domain name itself was key to this case. The fact that it only consisted of three letters and did not immediately bring to mind one particular brand owner was of particular importance. It seems likely that, had the domain name been at all distinctive, the panel may have found for the complainant on the basis that wilful blindness is indicative of bad faith, especially when it comes to professional domainers and bulk purchases. The panel commented:

“[The complainant] has not established a prima facie case of bad faith. [The complainant]’s allegations of bad faith in part are based upon the lack of due diligence conducted by retailers of domain names like the respondent. [The complainant] would seem to require that entities like the respondent conduct an international search for relatively obscure trademarks in order to determine whether a name is a registered mark.  The panel is not willing to go so far, as discussed below.

Still, and particularly in this case, the respondent is treading on thin ice. A fair reading of its pleadings reveals that the respondent made absolutely no attempt to examine its purchases for domain names which were also trademarks.  Again, here, at least one ‘generic’ string of three letters has been trademarked and is perhaps a common law mark of a number of business and other entities in a number of lines of business all around the world. Given the ease of searches using the common tools of the internet, how much is it to ask of a retailer like the respondent to do a little extra work?”

The case demonstrates the difficult task faced by professional domainers who frequently acquire large portfolios of domain names and underlines that the level of diligence necessary depends on a myriad of interwoven factors. There is a fine line between domaining and cybersquatting and domain owners who wish to remain on the right side of the line must remain vigilant.

The case is also interesting on a procedural level in that both parties filed lengthy additional submissions in addition to the complaint and the response. The panel underlined that such submissions would have been inadmissible under the Supplemental Rules of the World Intellectual Property Organisation (another provider for UDRP disputes and one of NAF’s main competitors) and strongly discouraged parties from filing submissions of that nature.

The WIPO Supplemental Rules remain silent on additional submissions, which may be accepted at the discretion of the panel, but the NAF Supplemental Rules contain a specific provision stating that a party may file an additional written statement within five days of the response (or the due date for the response) for an extra fee of $400. Further, the other party may file an additional statement in response within a further five days. This illustrates a significant difference between WIPO and NAF that may be of interest to so-called forum shoppers in difficult cases, and is something that many onlookers would argue takes the ‘Uniform’ out of the UDRP. 

David Taylor and Jane Seager, Hogan Lovells LLP, Paris

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