Sunday, November 28, 2010

More Puzzling Statements in National Arbitration Forum UDRP Decision: The New York Times Company v. Name Administration Inc. (BVI)

I'm so fired up over this one that I had to break from another project to write this post. The recent Uniform Domain-Name Dispute-Resolution Policy (“UDRP”) decision in The New York Times Company v. Name Administration Inc. (BVI) has me amped for two reasons – none of which relate to the holding itself in favor of BVI.

In this case, The New York Times sought transfer of the domain name dealbooks.com from BVI. The New York Times argued that it began using the mark DealBook in 2001 under common law and secured federal trademark registration of that mark in 2006. BVI reserved the subject domain name in 2004. BVI asserted that it used the subject domain name in connection with a web site that advertises online gaming with travel booking. In September 2010, The New York Times filed its UDRP complaint requesting transfer of the subject domain name. There are other facts to this case, of course, but for today’s post, I’m only concerned with those basic facts.

The UDRP policy requires a complainant to prove each of the following three elements to obtain an order for transfer of a subject domain name:

1. The domain name registered by Respondent is identical or confusingly similar to a trademark in which Complainant has rights; and

2. Respondent has no rights or legitimate interests in respect of the subject domain name; and

3. The domain name has been registered and is being used in bad faith.

The Panelists first turned to prong one of the UDRP test. Although Complainant’s mark, DealBook, and subject domain name, dealbooks.com, are confusingly similar – the Panel had to also decide whether Complainant had trademark rights in its mark at the time BVI reserved the subject domain name in 2004.

Since The New York Times didn’t own a federal trademark registration as of the date on which BVI reserved the subject domain name, The New York Times didn’t have presumptive trademark rights in its mark DealBook. Accordingly, The New York Times had to establish that it had common law trademark rights in its mark as of the date on which BVI reserved the subject domain name. After reviewing the evidence of record in support of The New York Time’s claim of prior common law rights, the Panel decided that such evidence didn’t support a finding that The New York Times had acquired common law trademark rights in its mark prior to the reservation of the subject domain name. Accordingly, the Panel held in favor of BVI. In so holding, however, the Panel also went on to make the following odd statement:

“As Complainant was computer savvy regarding Internet usage and domain names as well as knowledgeable concerning trademark law, Complainant’s failure to secure and register the disputed domain name or seek governmental registration of its mark until 2006 supports a conclusion that Complainant did not deem that it had any exclusive rights to enforce until that time. Thus Respondent’s registration and use predates Complainant’s rights in the mark.”

What? Because Complainant failed to seek federal registration of its mark until 2006, Complainant didn’t deem that it had any exclusive trademark rights to enforce until that time? How does the Panel know what The New York Times thought? There are plenty of reasons why brand owners choose not to seek federal trademark registration for their marks. Is that a new factor in determining trademark rights under the UDRP policy? I find that statement to be bazaar and, quite frankly, misguided.

Another interesting issue raised by the Panel in this case regards the issue of laches. In this case, BVI raised the defense of laches. Laches is a defense to a claim of trademark infringement. The essence of the laches defense is that a complainant has unreasonably delayed in asserting its rights and, as a result, the complainant is no longer entitled to its claim.

Although UDRP policy doesn’t specifically express the recognition of a laches defense, this Panel, contrary to just about every other UDRP panel, stated in its decision that laches should be a recognized defense in UDRP cases. The Panel went on to state:

“The Panel does believe that the circumstances of this case are the type that support a decision for the Respondent based on laches.”

The Panel went on to make the following contradictory statement:

“Where such a Complainant fails to police its claimed mark and does nothing for a substantial time while a Respondent develops an identical domain name for its own legitimate purpose, laches should bar that Complainant from turning a Respondent’s reliance to its own unjust enrichment.”

But wait! If a Respondent develops its own “legitimate” business purpose in connection with a domain name – then UDRP policy mandates—under prong two (and three) of the test - that Respondent prevail in a UDRP proceeding. In such a case, laches is irrelevant. Furthermore, if a Respondent is found to have misappropriated a brand owner’s trademark and in so doing deceives the consuming public and profits off of a brand owner’s goodwill, then why should a cybersquatter be entitled to hide behind the defense of laches? Who’s truly being hurt here? A cybersquatter!

Although laches may reflect the strength of a complainant’s case – the reality is that laches should not be dispositive evidence that a complainant has approved or condoned a respondent’s use of complainant’s mark in a domain name. The fact that a brand owner has sat on his hands while a cyber-thief has made ill-gotten gains should not bar a brand owner from protecting its trademark rights and brand in a UDRP proceeding – late or not. Period!

5 comments:

  1. I think maybe you're over-reading the UDRP to be about trademark protection. It is (emphatically) not. It is about clear and obvious cybersquatting. See my post discussing this case at http://udrp-attorney.com/2010/11/23/dont-wait-too-long-the-doctrine-of-laches-the-udrp/ ... suffice to say, I think the complaint failed because it did not contain enough evidence in support of the common law trademark the NYT was claiming, not because of any overreaching or misapplication of law by the Panel.

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  2. Bret, thanks for the comment. Thought my post was clear that I didn't have a problem with the decision in favor of the respondent(as I have not reviewed the evidence made of record). My problem is two part: the panel's comment regarding timing of seeking federal trademark protection and the other regarding laches and "legitimate" business purposes -- as discussed above.

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  3. Roger,
    I don't see the problem - particularly given the nature of UDRP panels. They make all sorts of assumptions against the respondents. From a pure evidence standpoint they have virtually eliminated the hurdle in the 1st element and relied on a newly baked "prima facie" standard for the 2nd and 3rd. Under this newly baked recipe the respondent must not only just show evidence calling the presumption into question (in which case the presumption would normally disappear), the respondent must convince the panel that its version is correct. Thus, a complainant can rely upon boilerplate renditions of the provisions of the 2nd and 3rd element by alleging them in the negative. The respondent ends up with the burden of proof.
    But, I don't see many tm attorneys complaining about panels undertaking presumptive analysis when done so in favor of the complainant.
    Bret's comment is correct. The UDRP is intended only for gross cyber squatting situations. The panelists are largely tm attorneys who both act as panelists and represent complainants before the same ADR providers.

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  4. Paul, many thanks for the comment. I don't disagree with anything you say. As I note in my post, I am not troubled by the decision itself. However, I was/and still am troubled by a couple of the statements made in the opinion -- including "Complainant’s failure to secure and register the disputed domain name or seek governmental registration of its mark until 2006 supports a conclusion that Complainant did not deem that it had any exclusive rights to enforce until that time." To me, that’s a puzzling statement – not so much speaking in terms of UDRP proceedings, but generally. Especially in light of the fact that the USPTO database shows that NYT owns two registrations for the mark DealBook that registered straight up – no need for 2f claim or supp. registration.

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