Bad-faith use cannot convert good-faith registration into bad-faith one

International
In Red Bull GmbH v Nabben (Case D2010-1358, September 30 1020), a World Intellectual Property Organisation panellist has found that the third element of the Uniform Domain Name Dispute Resolution Policy (UDRP) requires separate registration and use in bad faith, and that subsequent bad-faith use of a domain name would not suffice to infer registration in bad faith.

In this case, complainant Red Bull GmbH, while awaiting approval from the Norwegian authorities to sell its products in Norway, entered into an agreement with the respondent permitting the latter to sell Red Bull products through a website using the domain name 'redbullnorge.com'. Following expiry of the agreement, the respondent continued to sell Red Bull products in Norway from the website and to use the disputed domain name, despite the complainant’s demand that use of the website and domain name for the sale of Red Bull products be discontinued. The respondent did not comply with this demand and the complainant requested that the disputed domain name be cancelled.

The complainant claimed that the respondent did not have any right or legitimate interest in respect of the disputed domain name, as the consent to use had expired in May 2009. The complainant further claimed that the disputed domain name was registered and was being used in bad faith. It alleged that the respondent’s renewal of the domain name was made in bad faith because the respondent used the domain name to divert users to his internet site after the consent agreement had expired, and after the complainant’s express request for the respondent to cease using the website and domain name.

The respondent argued that:
  • he had invested considerable resources, over a long period of time, in the website to which the disputed domain name resolved; and
  • such investment was based on the promise of a trial period of full-scale sale and distribution of the Red Bull product in Norway once the product had been approved for sale by the Norwegian authorities.
It was on this basis that the respondent believed that he was entitled to a reasonable fee for the domain name owned by him.

The panellist found that the disputed domain name had been registered with the consent of the complainant and, therefore, was made in good faith. Subsequent conduct in continuing to use the disputed domain name without authority after the consent agreement had expired, and in using the disputed domain name to divert internet users to the respondent’s website, could not convert the registration made in good faith into a bad-faith registration. In dismissing the complaint, the panellist, following the consensus amongst previous panels, rejected the contention that the renewal of the domain name constituted a 'new' registration which could be interpreted as having been made in bad faith. 

There is currently a bifurcation in approach between the panels as regards the proper interpretation of the separate requirements for registration and use in bad faith under Paragraph 4(a)(iii) of the UDRP. The Red Bull case follows the approach that treats the requirements quite literally and separately, even in the face of the evidentiary presumptions in Paragraph 4(b)(iv). By contrast, the Octogen line of interpretation allows the two requirements to be elided in appropriate circumstances and permits a panel to make a retroactive finding of registration in bad faith on what amounts essentially to a 'purposive' approach to interpretation of the UDRP. Had the panellist in the present case adopted the Octogen approach, he might have considered that the respondent’s use of the domain name constituted bad faith sufficient to fulfil the requirements of the third element of the UDRP.   

The panellist in Red Bull reflected that some commentators consider that the separate requirement of registration and use in bad faith is a deficiency in the UDRP, but concluded that the UDRP was intended to cover abusive cybersquatting and not circumstances of consensual registration, as in this case. The panellist also observed that parties in the complainant’s situation could protect themselves by putting appropriate contractual protections in place, and that he felt constrained to apply the UDRP “as it is, rather than as it could or should be”. Cold comfort for the complainant, but pending any revision of the bad-faith requirements in the UDRP, this inconsistent divergence in approach is likely to remain.
 
Alistair Payne, Matheson Ormsby Prentice, Dublin

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