UDRP panel makes finding of reverse domain name hijacking, even if respondent did not request it

In a recent decision under the Uniform Domain Name Dispute Resolution Policy (UDRP) before the World Intellectual Property Organisation, a panel has denied the transfer of a domain name and went on to make a finding of reverse domain name hijacking, even though the respondent did not specifically ask for such relief.

The complainant was iPayment Inc, a company providing credit-card and debit-card payment processing services, based in California. The complainant started providing such services in 2001 and was now providing them to approximately 150,000 small business merchants located throughout the United States. Its charge volume for the first nine months of 2014 was $16.9 billion. The complainant provided evidence of two valid US trademark registrations for IPAYMENT.

The respondent was Kwangpyo Kim of a company called Mediablue Inc, doing business in the Republic of Korea. The disputed domain name was ‘ipayments.com’. It was originally created on March 7 1997 and was subsequently owned by the complainant, but not renewed. It was then acquired by the respondent at auction on or about June 12 2015. At the time that the complaint was filed, it was pointing to a website containing links to third-party websites and also offering the disputed domain name for sale.

On September 2 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):

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.

In the case at hand, the complainant argued that the respondent's use of the disputed domain name was intentionally designed to cause deception through the practice of typosquatting because it was diverting internet users seeking the complainant's website and directing them to the respondent's website. The complainant also stated it that it was inconceivable that the respondent was not aware of its trademark rights when it registered the disputed domain name, and that the respondent had acquired it for the purposes of selling it to the complainant. Finally, the complainant argued that the respondent had registered and was holding the disputed domain name in order to prevent the complainant from registering it.

The respondent pointed out that the complainant had not disclosed the fact that it had previously owned the disputed domain name but had failed to renew it, which is why the respondent was able to acquire it at auction. The respondent also revealed that it had purchased many other domain names with the ‘I’ prefix, such as ‘ishoppers.com’ or ‘i-channel.com’, and stated that it had not heard of the complainant's business, given that the complainant operated in the United States and that the respondent was resident in the Republic of Korea.

Although the first limb of Paragraph 4(a) was satisfied (namely that the disputed domain name was confusingly similar to the complainant's IPAYMENT mark), the panel found that the respondent did indeed have rights or legitimate interests in the disputed domain, and so the complaint failed at the second hurdle. Given this, the panel did not need to go on to continue the third issue of bad faith and denied the complaint.

In the panel's opinion, the fact that the complainant chose not to mention that it had previously owned the disputed domain name, combined with the evidence provided by the respondent (namely that it was based in the Republic of Korea and had not heard of the complainant, together with its prior domain name registrations forming part of a legitimate business strategy), cast a different light on the respondent's conduct. Although the complainant had attempted to characterise the respondent's conduct as abusive, this was not borne out by the evidence.

In view of this, the panel chose to go on to consider the issue of reverse domain name hijacking, even though the respondent had not specifically requested this remedy. Non-disclosure of material facts is among the circumstances cited by prior panels as a basis for a finding of reverse domain name hijacking, and in this regard the panel came to the conclusion that the complainant had failed to disclose a number of material facts, namely:

(a) its prior ownership and subsequent abandonment of the disputed domain name;

(b) the purchase by the respondent at auction; and

(c) the reference by the complainant to a third IPAYMENT trademark that had in fact expired.

In the panel's opinion, this non-disclosure was compounded by the complainant's aggressive pleadings, which attempted to characterise the respondent's conduct in a manner which was not consistent with reality. In this regard, the panel cited two specific examples, namely:

(a) the references to intentional typosquatting (despite the fact that the complainant had facilitated the acquisition of the disputed domain name by the respondent by allowing it to be put up for auction); and

(b) the allegation that the respondent had registered and was holding the disputed domain name in order to prevent the complainant from registering it (again despite the fact that the complainant had previously registered the disputed domain name but had then allowed it to lapse).

In the panel's view, this last allegation implied that the complainant had a genuine need or intention to register the disputed domain name, although the evidence in fact demonstrated the opposite, namely that the complainant had in fact abandoned the disputed domain name. The panel concluded by stating that the complainant's failure to disclose and explain its conduct was inexcusable.

This case shows that unsubstantiated standard allegations of typosquatting that run contrary to the actual factual evidence supplied by the opposing party will not be well received by UDRP panels and, when combined with the omission of material facts, may result in a finding of reverse domain name hijacking, even if the respondent does not request this. 

David Taylor and Jane Seager, Hogan Lovells LLP, Paris