CIRA panel rewrites the rules

Canada

In Diners Club International Ltd v Planet Explorer Inc, a Canadian Internet Registration Authority (CIRA) panel has ruled that the bad-faith requirement, which is one of the three conditions for transfer set out in the CIRA Domain Name Dispute Resolution Policy (CDRP), need not be satisfied. The decision is slightly puzzling but is a positive development for trademark owners.

Prior to Diners Club and in accordance with the terms of the three-part CDRP test, domain names could be recovered by trademark owners under the CDRP where:

  • the registrant's domain name is confusingly similar to a mark in which the complainant had rights prior to the date of registration;

  • the registrant has no legitimate interest; and

  • the registrant has registered and is using the domain name in bad faith.

Bad faith under the CDRP is, in contrast to the Uniform Domain Name Dispute Resolution Policy, narrowly and exhaustively defined. Consequently, it was a difficult task for a complainant to discharge its burden of proving, on a balance of probabilities, that a domain name was registered with a lack of legitimate interest and in bad faith.

Two early decisions under the CDRP, Biogen Inc v Xcalibur Communications and Elysium Wealth Management Inc v Driscoll, recognized the problem with the restrictive CDRP definition of bad faith (see CDRP 'bad-faith' test wider than first thought). For example, in the Biogen Case, the panellist found that the total lack of any evidence from the registrant of a legitimate interest in the domain name combined with the facts that (i) the trademark BIOGEN was a coined word, and (ii) the registrant had failed to respond to the complaint, meant that the "only reasonable inference" was that the registrant was aware of the complainant's trademark before registering the domain name and, thereby, fell foul of at least one of the three tests for bad faith, if not all three. The clear implication of the Biogen decision was that a lack of legitimate interest constitutes bad faith.

CIRA has also tried to reduce the evidentiary burden of showing bad faith by introducing the Registration Information Access Rules and Procedures, which give potential complainants information on the other domain names a registrant has registered (to assist in showing that the registrant has engaged in a pattern of registering other parties' trademarks as domain names).

In Diners Club, the panel considered the domain names 'diners-club.ca' and 'dinerscard.ca', and ordered their transfer to Diners Club International. The panel found that because the registrant did not have a legitimate interest in the domain names, the existence of bad faith was irrelevant. In doing so, the panel seems to have indicated that the CDRP's bad-faith requirement need not be satisfied.

Another aspect of the Diners Club decision is worth noting. Although the panel confirmed that use of a domain name for the purposes of criticism was legitimate, it found that domain names used to criticize should contain language that identifies that fact in the domain name (for example, by including the term 'sucks' in the domain name). The same analysis was found to apply to fan-club use. The panel commented that in previous cases where a domain name that merely reproduced a mark was used for the purpose of criticism, that use has not been upheld. It, therefore, clearly displayed a preference for one line of UDRP decisions over another, without even acknowledging the existence of numerous rulings to the contrary, including the recent Anti-cybersquatting Consumer Protection Act decision of the US Court of Appeals for the Sixth Circuit in Lucas Nursery and Landscaping Inc v Grosse (see Interpretation of ACPA's area of control is on level ground).

The Diners Club decision is a positive one for trademark owners and, hopefully, it will be followed by subsequent CDRP panels. If so, trademark owners who may have been avoiding the CDRP because of the onerous burden of proving lack of legitimate interest and bad faith might want to reconsider.

Mark Edward Davis and R Scott MacKendrick, Ogilvy Renault, Toronto

Get unlimited access to all WTR content