UDRP panel makes finding of reverse domain name hijacking against owner of generic mark

In a recent decision under the Uniform Domain Name Dispute Resolution Policy (UDRP) before the World Intellectual Property Organisation (WIPO), a panel has denied the transfer of a domain name and made a finding of attempted reverse domain name hijacking for failure to prove that the domain name was registered and used in bad faith.

The complainant was Foundation Fitness LLC, a company specialised in the creation and distribution of indoor bicycles and bicycle accessory products, established in the United States in 2009 and based in Portland, Oregon. The complainant provided evidence of valid trademark registrations for STAGES, STAGES CYCLING and STAGES POWER in various countries including the European Union, the United States, Australia, Japan and the Republic of Korea.

The respondent was Jiang Zhou, an individual of Auckland, New Zealand, who operated a number of online business and held registrations for many domain names.

The disputed domain name was ‘stages.com’. It was originally created on December 10 2001 and was acquired by the respondent on or around 17 December 2014. The disputed domain name resolved to a website advertising a computer program for the trading of stocks, a survey relating to ‘Telstra Internet’ or a survey supposedly giving participants the chance to win vouchers for the Australian department store Myer.

On September 3 2015 a three-member panel unanimously denied the complaint and made a finding of reverse domain name hijacking, defined in Paragraph 1 of the UDRP Rules as "using the policy in bad faith to attempt to deprive a registered domain name holder of a domain name".

To be successful in a complaint under the UDRP, a complainant must satisfy the following three requirements set out at Paragraph 4(a):

(i) the domain name is identical, or confusingly similar, to a trademark or service mark in which the complainant has rights;

(ii) the respondent has no rights or legitimate interests in respect of the domain name; and

(iii) the domain name has been registered and is being used in bad faith.

As far as the first limb was concerned, the complainant argued that the disputed domain name was likely to confuse consumers into believing that the respondent was affiliated with, endorsed by, or sponsored by the complainant, or that the respondent’s use of the disputed domain name was authorised by the complainant. The respondent countered this by arguing that the disputed domain name was composed solely of an English dictionary word that was used purely in a descriptive sense. However, the panel followed traditional UDRP case law and simply found that the disputed domain name was identical to the complainant's STAGES mark, it being well established that the ‘.com’ addition was not sufficient to separate the disputed domain name from the trademark under the UDRP. The first limb was satisfied.

Turning to the second limb, the complainant argued that the respondent had no rights or legitimate interests in respect of the disputed domain name because he had not made use of it in connection with a good-faith offering of goods or services and had not been commonly known by it. Furthermore, the respondent was not making a legitimate, non-commercial or fair use of the disputed domain name because it was used for a pay-per-click site or parked with an auction site.

In response, the respondent claimed that he had acquired the disputed domain name because of the plain meaning of the word and his own professional and personal interest developing a theatre-related website. He added that the complainant's trademarks were not well known to the general public and in particular not in New Zealand where the respondent resided, and thus he had no knowledge of the complainant or the STAGES marks at the time of registration of the disputed domain name. Finally, the respondent argued that offering the domain name for sale was not improper because the business of selling generic domain names was a legitimate business endeavour.

The panel was sceptical as to whether the respondent's allegations of use could amount to a right or legitimate interest. Indeed, in the panel's opinion it was unclear what use the respondent had made of the disputed domain name as it did not appear that the respondent had ever used the disputed domain name for its common or dictionary meaning. However, the panel did not find it necessary to reach a conclusion on this question, given its conclusions on bad faith.

As far as the third limb was concerned, the complainant argued that the disputed domain name had been acquired by the respondent primarily for the purpose of selling it to the complainant or another trademark owner for valuable consideration well in excess of the respondent's out-of-pocket costs. In addition, the complainant stated that the respondent had registered and used the disputed domain name in bad faith because the respondent had exhibited a pattern of registering domain names featuring names and trademarks in which he had no legitimate interests, citing ‘directtvsports.com’, ‘bellavita.com’, ‘nicolekidman.org’, ‘peterjackson.co.nz’, ‘tekkenmovie.com’ and ‘wphone.com’ as examples. Furthermore, the respondent was disrupting the complainant's business by depriving it of the right to host a website at the disputed domain name.

The respondent countered that it had not used the disputed domain name for cycling products or anything remotely related to the complainant's business and had not targeted the complainant in any bad faith manner. Neither did the respondent contact the complainant to sell the disputed domain name, rather he had simply responded to the complainant's unsolicited offer. The respondent stressed that he had simply registered many common word domain names and created websites for such domain names. In view of this, the respondent requested the panel to make a finding of reverse domain name hijacking. In the respondent's opinion, the complainant had abused the UDRP process by bringing a complaint which it knew to have no chance of success in the hope of obtaining a default judgment and securing the disputed domain name, despite its failed purchase attempt.

First, the panel found that the complainant's argument that the disputed domain name was acquired primarily for the purpose of selling it at a high price was not made out. The panel cited a previous decision where it was held that "offering to sell a domain name at a high price is a very common business practice". In the case at hand, the panel pointed out there was no indication that the respondent was aware of, or interested in, the complainant at the time of registration, as his denial of actual knowledge of the STAGES marks and the disputed domain name's intrinsic value as a dictionary word were plausible reasons for choosing and using it.

Furthermore, the panel held that the respondent's large portfolio of domain names, consisting mainly of other attractive ordinary words, was not in itself probative of bad faith. The panel's searches had not revealed any previous UDRP proceedings involving the respondent and thus the panel was not prepared to find a pattern of abusive registrations. In the panel's opinion, the six examples cited by the complainant did not give rise to the level of a "pattern" of conduct, particularly as some of the names in question were relatively obscure from a trademark perspective.  

Finally, given the significant third-party use evidenced by the respondent (the search results for ‘Stages’ conducted on search engines provided millions of results, of which at least the first two pages showed no reference to the complainant), the panel was not willing to find that the respondent had intentionally attempted to attract business to his website by creating a likelihood of confusion with the STAGES marks. In this regard, the panel adopted the view expressed in Investone Retirement Specialists Inc v Motohisa Ohno (WIPO Case No D2005-0643) that:

"it will not be sufficient to demonstrate that the respondent’s conduct was directed to a mark in the abstract; rather, there must be a nexus between the mark and the complainant, which is known to the respondent, before a finding of intentional misappropriation of the rights of that brand owner can be made."

In view of the above findings, the panel chose to go on to consider the issue of reverse domain name hijacking. According to the panel, the lack of evidence to substantiate the allegations of bad faith by the respondent meant that the complainant should have known, before it filed the complaint, that it lacked a genuine claim under the UDRP. Indeed, the disputed domain name consisted of a common descriptive English word and the complainant knew that the respondent had registered numerous other domain names, the majority of which were descriptive. In addition, the panel took into account that the complainant had failed to contact the respondent and attempted to negotiate a resolution of the matter prior to initiating the proceedings.

In the panel's opinion, this was a case where the complainant had adopted a very generic term as its trademark, in full knowledge that it did not have the corresponding ‘.com’ domain name at the time of adoption. The panel therefore concluded that the complaint was filed in an attempt to remove the disputed domain name from a registrant that appeared to have bought it legitimately, and thus made a finding of attempted reverse domain name hijacking.

David Taylor and Jane Seager, Hogan Lovells LLP, Paris