Saturday, August 28, 2010

UDRP Panelist Slams Complainant With Charge Of Reverse Domain Name Hijacking: Might This Decision Reverse A Longstanding Trend Of Pro-Trademark Owner Panelists and Decisions?

A recent Uniform Domain Name Dispute Resolution Policy (“UDRP”) decision may be seen as a ray of hope for Domainers with respect to reversing a longstanding trend of pro-trademark leaning panelists and decisions. In the case of M. Corentin Benoit Thiercelin v. CyberDeal, Inc. (decided August 10, 2010), single panelist Tony Willoughby pulled out paragraph 15(e) of the UDRP regulations and reprimanded the complainant for abusing UDRP proceedings and for an attempt to reverse hijack the subject domain name.

Complaint, M. Corentin Benoit Thiercelin, runs a company named VirtualExpo, which was registered in 2000. Complainant did not secure trademark registration until 2005. Complainant claimed that CyberDeal, Inc. had registered - and was using - the domain name in bad faith to prevent Complainant from acquiring the domain name for itself. Interestingly, CyberDeal had registered the domain name in 1996, at least four years before Complainant had acquired any alleged rights in the name VirtualExpo and nearly ten years before Complainant secured trademark registration.
 
Per the decision, prior to the filing of the UDRP proceeding, Complainant’s attorney sent CyberDeal a cease and desist letter alleging that CyberDeal was using the subject domain name in connection with a web site that was “causing commercial as well as image damages for which my client will seek damages.” Interestingly, however, there was no evidence placed in the UDRP proceeding record to suggest that the domain name had ever been put to any use.
 
The panelist considered whether (1) the subject domain name and Complaint’s mark were confusingly similar, (2) the defendant had any legitimate interests in the subject domain name and (3) the subject domain name was registered in bad faith.

The panelist found that the mark VirualExpo and domain name are confusingly similar. The panelist elected to skip prong two of the test and move directly to the issue of whether the subject domain name was registered in bad faith.

The panelist first considered the issue of whether a domain name can be registered in bad faith before trademark rights are acquired by a third party. Although bad faith will not generally be found when a subject domain name was registered before acquired trademark rights, there are those cases where bad faith may be found. For example, in those instances where a domain name holder had inside knowledge of a trademark owner’s plan to use a certain trademark.

In this case, Complainant's earliest alleged trademark rights began in 2000, or four years after the registration of the subject domain name. Based upon the record of this case, the panelist stated, “On the papers before the Panel this was a wild, unsupported and wholly misconceived claim.” The panelist continued on to state the following:

In the view of the Panel this is a Complaint which should never have been launched. The Complainant knew that the Domain Name was registered nearly 10 years before the Complainant acquired his registered rights, no attempt was made to demonstrate the existence of any earlier rights nor was any attempt made to address the issue arising from the disparity in dates. It simply was not mentioned. Instead, a flagrantly insupportable claim was made as to the Respondent’s bad faith intent at time of registration of the Domain Name and the Panel can only assume that it was hoped that the Panel would miss the point.”

Reverse domain name hijacking occurs when trademark owners secure domain names by making false cybersquatting claims against rightful owners of domain names. In those closer cases that result in transfers of domain names to complainants, but still constitute reverse domain name hijacking, places trademark owners in jeopardy of being sued in federal court for reverse domain name hijacking. Although there are no statutory damages for reverse domain name hijacking, the idea of defending a federal court action – not to mention receiving a “black eye” - should cause trademark owners to pause and seriously consider whether to bring arguably baseless UDRP claims.

Could this decision be a turning point for reversing a longstanding trend of pro-trademark leaning panelists and decisions or simply nothing more than a decision regarding clear abuse of the UDRP process?

Should federal trademark law be amended to provide statutory damages for victims of reverse domain name hijacking? What about “attempted” hijacking? I think it should.

What should the standard and statutory damages be? What do you think?

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