The Complainant is Camon S.p.A. of Verona, Italy, represented by McCracken & Frank LLP, United States of America.
The Respondent is Intelli-Pet, LLC of California, United States of America.
The disputed domain name, <walkydogusa.com> (the “Domain Name”), is registered with GoDaddy.com, Inc. (the “Registrar”).
The Complaint was filed with the WIPO Arbitration and Mediation Center (the “Center”) on December 14, 2009. On December 15, 2009, the Center transmitted by email to the Registrar a request for registrar verification in connection with the Domain Name. On December 18, 2009, the Registrar transmitted by email to the Center its verification response confirming that the Respondent is listed as the registrant and providing the contact details.
The Center verified that the Complaint satisfied the formal requirements of the Uniform Domain Name Dispute Resolution Policy (the “Policy” or “UDRP”), the Rules for Uniform Domain Name Dispute Resolution Policy (the “Rules”), and the WIPO Supplemental Rules for Uniform Domain Name Dispute Resolution Policy (the “Supplemental Rules”).
In accordance with the Rules, paragraphs 2(a) and 4(a), the Center formally notified the Respondent of the Complaint, and the proceedings commenced on December 29, 2009. In accordance with the Rules, paragraph 5(a), the due date for Response was January 18, 2010. On January 13, 2010, the Respondent requested an extension of time to file a Response and in accordance with paragraph 5(d) of the Rules, the Center extended the due date to file a Response to January 25, 2010.
The Respondent did not submit any response. Accordingly, the Center notified the Respondent's default on February 1, 2010.
The Center appointed Tony Willoughby as the sole panelist in this matter on February 8, 2010. The Panel finds that it was properly constituted. The Panel has submitted the Statement of Acceptance and Declaration of Impartiality and Independence, as required by the Center to ensure compliance with the Rules, paragraph 7. Due to the Comparative complexity of the matter in dispute in these proceedings, the Panel finds it appropriate to have extended the due date to that listed on the concluding page of the decision.
The Complainant and the Respondent are in competition with one another. They sell pet products and amongst other things a dog leash attachment device to be attached to a bicycle to enable the rider to walk the dog while riding the bicycle. The Complainant's device is branded WALKYDOG. The Respondent's device is branded K-9 Bike Jogger. The unchallenged evidence of the Complainant is that they are substantially identical.
In 2007 the Complainant acquired Bice S.r.l. (“Bice”) an Italian company, which had from at least as early as 2003 been using the trade mark WALKYDOG in relation to its dog leash attachment device for use with a bicycle. Bice marketed its WALKYDOG product over the Internet using its domain name, <walkydog.com>, a domain name which it registered on September 11, 2002.
The Domain Name was registered by the Respondent1 on October 27, 2003. Mr. DeMarco is named as the administrative and technical contact for the Domain Name.
When the Complainant acquired Bice, Mr. DeMarco was Bice's US distributor for the WALKYDOG device. Mr DeMarco's distributorship was terminated in January 2008. However, for a period thereafter while considering whether or not to accept a position with the new distributor, he was authorized by the Complainant to act as a sub-distributor2.
The Respondent's website connected to the Domain Name promotes the Respondent's K9 Bike Jogger. “walkydog” is embedded as a metatag in the Respondent's website.
On March 25, 2009 the Complainant applied for registration of the trade mark WALKY DOG (words) in class 18 at the United States Trade Mark and Patent Office. That application matured into a registration on October 13, 2009 under number 3,695,507.
On March 27, 2009 the Complainant's representative wrote to Mr. DeMarco drawing attention to the Complainant's rights, alleging infringement of those rights by Mr. DeMarco and demanding assurances from Mr. DeMarco that he will desist from further use of the WALKY DOG trade mark, including use of the Domain Name. One of the concluding paragraphs of that letter reads as follows:
“Finally, your website refers to Intelli-Pet, Inc. and Intelli-Pet LLC and a registered trademark in the name of K-9 Bike Jogger. However, our investigation shows that no such entities and that no such registration exists.”
The Complainant asserts that no reply was received to that letter.
The Complainant contends that the Domain Name is identical or confusingly similar to a trade mark in which the Complainant has rights.
The Complainant further contends that the Respondent has no rights or legitimate interests in respect of the Domain Name.
Finally, the Complainant contends that the Domain Name is being used in bad faith.
The Respondent did not reply to the Complainant's contentions.
According to paragraph 4(a) of the Policy, for this Complaint to succeed in relation to the Domain Name, the Complainant must prove each of the following, namely that:
(i) The Domain Name is identical or confusingly similar to a trade mark or service mark in which the Complainant has rights; and
(ii) The Respondent has no rights or legitimate interests in respect of the Domain Name; and
(iii) The Domain Name has been registered and is being used in bad faith.
The Domain Name comprises the Complainant's United States registered trade mark WALKY DOG (words), the geographical acronym ‘usa' and the generic domain suffix, the last of which may be ignored for the purposes of assessing identity and confusing similarity for the purposes of paragraph 4(a)(i) of the Policy.
The fact that the trade mark registration post dates registration of the Domain Name is of no consequence insofar as paragraph 4(a)(i) of the Policy is concerned. For the purpose of this paragraph all that is necessary is that the Complainant has trade mark rights at the date of the Complaint.
However, the Panel is satisfied on the evidence before him that the Complainant also had common law trade mark rights in respect of the name WALKY DOG as at the date of registration of the Domain Name. The Panel observes that the Respondent's administrative contact, Mr. DeMarco, who had adopted for the Domain Name the brand name of the product which he had been appointed to distribute, would not have been best-placed to deny the existence of such rights at that time.
The Panel finds that the Domain Name is confusingly similar to a trade mark in which the Complainant has rights.
The Complainant has asserted that the Respondent selected the Domain Name at a time when Mr. DeMarco, the person identified as the administrative and technical contact for the Domain Name, was the United States distributor of the Complainant's WALKY DOG product.3
The Complainant seems to have accepted that up until the termination of Mr. DeMarco's sub-distributorship for the Complainant's WALKY DOG product the use by the Respondent/Mr. DeMarco of the Domain Name was legitimate. The Complainant's allegations against the Respondent all relate to the subsequent use of the Domain Name by the Respondent/Mr. DeMarco.
Legitimate use of a domain name in relation to a bona fide offering of goods and services will usually defeat a complaint under the Policy. Paragraph 4(c)(i) of the Policy, which is addressed to registrants (i.e. respondents) reads:
“How to Demonstrate Your Rights to and Legitimate Interests in the Domain Name in Responding to a Complaint. When you receive a complaint, you should refer to Paragraph 5 of the Rules of Procedure in determining how your response should be prepared. Any of the following circumstances, in particular but without limitation, if found by the Panel to be proved based on its evaluation of all evidence presented, shall demonstrate your rights or legitimate interests to the domain name for purposes of Paragraph 4(a)(ii):
(i) before any notice to you of the dispute, your use of, or demonstrable preparations to use, the domain name or a name corresponding to the domain name in connection with a bona fide offering of goods or services;”
In the view of this Panel this was not intended to cover situations such as the present case, but cases where the respondent has no reason to anticipate that registration and/or use of the domain name in issue is likely to lead to a complaint. Where, as here, the Respondent/Mr. DeMarco will have known that continued use of the Domain Name following termination of the WALKY DOG distributorship in order to promote a competitor product will constitute an infringement of the Complainant's rights, that flagrantly mala fide use cannot sensibly be permitted to be franked by the previous bona fide use.
In this case the use of which complaint is made is undoubtedly abusive. The Respondent/Mr. DeMarco, a one-time distributor of the Complainant's WALKY DOG product, is now using the Domain Name featuring that trade mark, without the authority of the trade mark owner, to promote sales of the K-9 product, a competitor product to the WALKY DOG.
The Panel finds that the Respondent has no rights or legitimate interests in respect of the Domain Name.
The Conjunctive Requirement
To succeed in a Complaint under the Policy a Complainant must prove that the Domain Name was registered and is being used in bad faith (paragraph 4(a)(iii) of the Policy).
What is plain to this Panel from the factual background as set out in section 4 above combined with the finding under C above, is that the registration of the Domain Name was in good faith and the recent use of the Domain Name since termination of Mr. DeMarco's sub-distributorship for the WALKY DOG product has been in bad faith.
The Complainant does not argue otherwise. The Complainant has made no allegation relating to the bona fides of the Respondent/Mr. DeMarco as at the date of registration of the Domain Name. The heading of that section dealing with paragraph 4(a)(iii) of the Complaint reads “The Domain Name is being used in bad faith”.
Accordingly, on the face of the wording of paragraph 4(a)(iii) of the Policy (“your domain name has been registered and is being used in bad faith”), the Complaint should fail. Paragraph 4(a)(iii), on its face calls for the Complainant to prove both bad faith registration and bad faith use (commonly known as the “conjunctive requirement”).
However, as will be seen below, the issue is not straightforward and has been the subject of many detailed and thoroughly considered decisions. This Panel has felt it necessary to review the cases again in some detail, first, because the present case is a very stark one (the good faith registration is so obvious that the Complainant has not sought to question it; yet the bad faith use is so flagrant); secondly, the Panel's decision may seem counter-intuitive to some and the Panel takes no pleasure in it; thirdly, the Panel is dissenting from the views of some panelists of high repute.
For most panels appointed by the Center, the first port of call when reviewing the views of panelists on difficult questions is the WIPO Overview of WIPO Panel Views on Selected UDRP Questions, which is to be found on the Center's website. Currently, the only question in the Overview, which addresses good faith registration and bad faith use, is not precisely on point, but it does tend toward the view that it will be difficult for a complainant to succeed where the registration was made in good faith. The question (paragraph 3.1) reads:
“3.1 Can bad faith be found if the disputed domain name was registered before the trademark was registered/common law trademark rights were acquired?”
The answer, which is expressed to be a ‘consensus view' reads:
“Normally speaking, when a domain name is registered before a trademark right is established, the registration of the domain name was not in bad faith because the registrant could not have contemplated the complainant's non-existent right.
However, in certain situations, when the respondent is clearly aware of the complainant, and it is clear that the aim of the registration was to take advantage of the confusion between the domain name and any potential complainant rights, bad faith can be found. This often occurs after a merger between two companies, before the new trademark rights can arise, or when the respondent is aware of the complainant's potential rights, and registers the domain name to take advantage of any rights that may arise from the complainant's enterprises.”
While the latter part of the answer may seem to open the door to bad faith conduct leading to a finding of a bad faith registration, it all relates to the motive for registration of the domain name in issue, not its use.
The next port of call is the Index of WIPO UDRP Panel Decisions, which is also to be found on the Center's website. If one searches the topic “Registration in good faith, usage in bad faith”, one currently finds a list of 17 cases, the first 15 of which date from 2000 to 2006 and all 15 result in the complaint being denied. The 16th, which was issued on November 19, 2009, resulted in a transfer and will be reviewed in due course. The 17th, which was issued on January 29, 2010, resulted in a denial and will also be mentioned again in due course.
Typical quotes from the first 15 cases are:
“This finding that the respondent has used the domain name in bad faith does not disturb the finding that the original registration of the domain name was not in bad faith. Consequently, the dual test of Paragraph 4a(iii) has not been met.” Olly's B.V. v. CPS Korea, WIPO Case No. D2000-0203.
“The question, then, is whether bad faith use alone is sufficient to satisfy the bad faith requirement of the policy. In one sense, paragraph 4(b)(iv) may be read as supporting such an argument because that paragraph refers only to bad faith ‘use,' and does not also discuss registration. In the broader context of the Policy, though, it is clear that both bad faith use and bad faith registration are required. Policy paragraph 4(a)(iii); World Wide Wrestling Federation v. Bosman, WIPO Case No. D99-0001; Bandon Dunes L.P. v. DefaultData.com, WIPO Case No. D2000-0431; Interep National Radio Sales, Inc. v. Technical Staffing Corporation, WIPO Case No. D2000-0175. Although bad faith use may, in appropriate cases, give rise to an inference of bad faith registration, such an inference cannot be made where, as here, Complainant's mark was not yet in existence at the time of the domain name registration..” e-Duction, Inc. v. John Zuccarini, d/b/a The Cupcake Party &Cupcake Movies, WIPO Case No. D2000-1369.
“Previous decisions have considered the matter of good faith registration followed by bad faith use. The prevailing view is that the Policy was not designed to prevent such situations. In Substance Abuse Management, Inc. v. Screen Actors Modesl [sic] International, Inc. (SAMI), the panel stated that “If a domain name was registered in good faith, it cannot, by changed circumstances, the passage of years, or intervening events, later be deemed to have been registered in bad faith”. In Teradyne Inc.Teradyne, Inc. [sic] v. 4tel Technology, WIPO Case No. D2000-0026, the Respondent registered a domain name to reflect its own business name but subsequently sought to sell the name for profit when its business dissolved. The panel found that to decide the case on the subsequent bad faith action would “extend the Policy to cover cases clearly intended to be outside its scope.” Similarly, in Telaxis Communications Corp. v. William E. Minkle, WIPO Case No. D2000-0005, the respondent registered the disputed domain name in good faith but subsequently began to use it in bad faith. It was held that because the registration was made in good faith the requirement of Paragraph 4(a)(iii) was not met.” Yoomedia Dating Limited v. Cynthia Newcomer/Dateline BBS, WIPO Case No. D2004-1085.
“Nevertheless, it is paramount that panelists decide cases based on the limited scope of the Policy. Match.com, LP v. Bill Zag and NWLAWS.ORG, WIPO Case No. D2004-0230. The Policy provides a remedy only in cases where the complainant proves that the domain name has been registered and is being used in bad faith. In view of the foregoing, the Panel is constrained to conclude that the Complainant has not met its burden under paragraph 4(a)(iii) in this case.” MediaSpan Group, Inc. v. Raghavan Rajagopalan, WIPO Case No. D2005-1282.
“Having reviewed the cases, the Panel considers that the consensus view, that the original registration or subsequent acquisition must have been in bad faith, should be followed in the interest of clarity and certainty.” Guildline Instruments Limited v. Anthony Anderson, WIPO Case No. D2006-0157.
Those first 15 cases cited in that section of the Index of WIPO UDRP Panel Decisions (from which the above quotes have been taken) are only a very small proportion of the total number of cases in which panelists have concluded that bad faith use cannot turn a good faith registration into a bad faith registration. Other notable cases confirming the existence of the conjunctive requirement were the first case ever decided under the Policy World Wrestling Federation Entertainment, Inc. v. Michael Bosman, WIPO Case No. D1999-0001:
“It is clear from the legislative history that ICANN intended that the complainant must establish not only bad faith registration, but also bad faith use. ‘These comments point out that cybersquatters often register names in bulk, but do not use them, yet without use the streamlined dispute-resolution procedure is not available. While that argument appears to have merit on initial impression, it would involve a change in the policy adopted by the Board. The WIPO report, the DNSO recommendation, and the registrars-group recommendation all required both registration and use in bad faith before the streamlined procedure would be invoked. Staff recommends that this requirement not be changed without study and recommendation by the DNSO'. Second Staff Report on Implementation Documents for the Uniform Dispute Resolution Policy, submitted for Board meeting of October 24, 1999, para. 4.5,a.”
and the most cited of all cases decided under the Policy, namely Telstra Corporation Limited v. Nuclear Marshmallows, WIPO Case No. D2000-0003:
“So understood, it can be seen that the requirement in paragraph 4(a)(iii) that the domain name ‘has been registered and is being used in bad faith' will be satisfied only if the Complainant proves that the registration was undertaken in bad faith and that the circumstances of the case are such that Respondent is continuing to act in bad faith.”
More recently, this Panel participated in a three member panel in Meeza QSTP-LLC v. Torsten Frank/medisite Systemhaus GmbH, WIPO Case No. D2009-0943, wherein it was said:
“For many panels (including the members of this Panel) in proceedings under the Policy a complaint cannot succeed unless the complainant can prove on balance that the domain name in issue was both registered in bad faith and is being used in bad faith, as provided in paragraph 4(a)(iii) of the Policy.”
For many of those panelists who take a different view, the starting point is paragraph 4(b)(iv) of the Policy.
Paragraph 4(b)(iv) of the Policy
Paragraph 4(b) of the Policy sets out a non-exhaustive list of circumstances which “if found by the Panel to be present, shall be evidence of the registration and use of a domain name in bad faith”. It reads:
“Evidence of Registration and Use in Bad Faith. For the purposes of Paragraph 4(a)(iii), the following circumstances, in particular but without limitation, if found by the Panel to be present, shall be evidence of the registration and use of a domain name in bad faith:
(iv) by using the domain name, you have intentionally attempted to attract, for commercial gain, Internet users to your web site or other on-line location, by creating a likelihood of confusion with the complainant's mark as to the source, sponsorship, affiliation, or endorsement of your web site or location or of a product or service on your web site or location.”
It will be noted that paragraph 4(b)(iv) makes no reference the Respondent's state of mind at time of registration of the domain name in issue, simply the nature of the use.
It is convenient to point out at this stage that in this case the Panel is satisfied that the use which the Respondent is making of the Domain Name falls full square within the description of use set out in paragraph 4(b)(iv) of the Policy. The Respondent, in using the Domain Name, is intentionally attempting to attract, for commercial gain, Internet users to its website by creating a likelihood of confusion with the Complainant's mark as to the source of the website or of a product on its website. Clearly, the Respondent is hoping and anticipating that visitors to its website, expecting to find the Complainant's product, will instead opt for the Respondent's equivalent product.
What does paragraph 4(b)(iv) mean? One of the earliest cases to comment on this apparent anomaly (paragraph 4(a)(iii) calling for both bad faith registration and bad faith use as against paragraph 4(b)(iv) which only talks of a bad faith use) was Shirmax Retail Ltd./Détaillants Shirmax Ltée v. Ces Marketing Group Inc., eResolution Case No. AF-0104 wherein the Panel addressed the issue as follows:
“The requirement of bad faith registration and use in paragraph 4(a)(iii) is stated in the conjunctive. Registration in bad faith is insufficient if the respondent does not use the domain name in bad faith, and conversely, use in bad faith is insufficient if the respondent originally registered the domain name for a permissible purpose. The first three examples in paragraph 4(b) all refer to registration for various illegitimate purposes as evidence of registration and use in bad faith; but in each instance bad faith use may well be implicit in the act of registering a domain name, since all of the improper purposes mentioned can be accomplished merely by passively holding a domain name.
The fourth example (paragraph 4(b)(iv)), however, refers only to improper use, and does not appear to require that the domain name also have been registered in bad faith. This example thus appears to conflict with the rule set forth in paragraph 4(a)(iii). The language of paragraph 4(a)(iii) is clear, and the only reasonable interpretations are to regard the fourth example as a narrow exception to the preceding subparagraph's conjunctive rule, or to apply the conjunctive rule as it is written and disregard the example entirely.”
In other words, in the view of the panelist in that case, paragraph 4(b)(iv) is an aberration to be ignored or a narrow exception to the conjunctive requirement of paragraph 4(a)(iii). Thus, in the present case, if the Panel takes the view that paragraph 4(b)(iv) is an aberration, the Complaint fails for lack of proof of the conjunctive requirement, whereas if it is to be treated as a narrow exception to paragraph 4(a)(iii), the Complaint succeeds.
To the best of this Panel's knowledge and belief, no panel has yet regarded paragraph 4(b)(iv) as an aberration to be ignored, but two distinct lines of approach leading to diametrically opposed results have emerged. One developing line of authority (still somewhat in its infancy) takes the view that if the circumstances described in paragraph 4(b)(iv) are present, that is evidence of bad faith registration and use irrespective of the respondent's motives at time of registration of the domain name in issue (i.e. bad faith registration is deemed and this sub-paragraph is an exception to the conjunctive requirement of paragraph 4(a)(iii)). The other line of authority, first espoused in the early days of the Policy, rejects the proposition that bad faith registration can be deemed (as opposed to inferred) under the Policy and relies upon contrasting the opening words of paragraph 4(b) of the Policy with those of paragraph 4(c) of the Policy.
Over 9 years ago the three member panel in Viz Communications, Inc. v. Redsun d/b/a www. Animerica.com and David Penava, WIPO Case No. D2000-0905 stated and adopted the view previously articulated both in Shirmax Retail Ltd./Détaillants Shirmax Ltée v. Ces Marketing Group Inc., (Supra), and subsequently in Passion Group Inc. v. Usearch, Inc., eResolution Case No. AF-0250, that:
“The panel is assisted in forming a view as to how to interpret paragraphs 4(a)(iii) and 4(b)(iv) by the contrast between the introductory words of paragraph 4(c): ‘any of the following circumstances …shall demonstrate your rights or legitimate interests' and the introductory words of paragraph 4(b): "the following circumstances…shall be evidence of the registration and use of a domain name in bad faith.
This contrasting language indicates that use of the kind described in 4(b)(iv) is to be taken as evidence of bad faith registration as well as evidence of bad faith use. But this evidence is not necessarily conclusive. Furthermore, the panel is not required to assign substantial weight to evidence of constructive bad faith registration furnished by paragraph 4(b)(iv), and the panel may have regard to other evidence in determining whether the requirements of 4(a)(iii) have been proved.
This approach accords with the Policy by enabling a finding of bad faith registration to be made where bad faith use within 4(b)(iv) is the only evidence tending to show the purpose for which the domain name was registered. Where, however, there is other relevant evidence, such as evidence that the domain name was registered for a permissible purpose, it must be weighed against any evidence of bad faith registration constituted by evidence of bad faith use within 4(b)(iv). It is difficult to imagine circumstances in which, under this approach, subsequent bad faith use within 4(b)(iv) would suffice to prove that a domain name was originally registered in bad faith.”
This was followed in the recent case of Torus Insurance Holdings Limited v. Torus Computer Resources, WIPO Case No. D2009-1455:
“In paragraph 4(c), proof of any of the three examples provided in the paragraph “shall demonstrate” the respondent's rights or legitimate interests in respect of the disputed domain name. The meaning is clear beyond doubt: proof of any one of the listed circumstances will necessarily be fatal to the complaint.
The examples in paragraph 4(b) on the other hand, are merely said to constitute “evidence” of the registration and use of the disputed domain name in bad faith. That “evidence” is not stated to be conclusive, or irrebuttable. Comparing the different language used in the introductory parts of paragraphs 4(b) and 4(c), it seems at least possible that the intention was that proof of circumstances falling within any of the subparagraphs of paragraph 4(b) of the Policy would provide a sufficient basis for a panel to infer both bad faith registration and bad faith use under paragraph 4(a)(iii), in the absence of countervailing evidence. That interpretation would appear to have the advantage of accommodating the fact that, while subparagraphs 4(b)(i) – (iii) appear on their face to be concerned only with bad faith registration and paragraph 4(b)(iv) only with bad faith use, all four subparagraphs are deemed to provide evidence of bad faith registration and bad faith use.
In this Panel's view, at the end of the day, paragraph 4(b) only provides examples of the kind of evidence which will be indicative of bad faith registration and use. Paragraph 4(a)(iii) is clearly the paragraph with primacy, and it requires proof of both.”
That decision was followed a few days later by the decision in Validas, LLC v. SMVS Consultancy Private Limited, WIPO Case No. D2009-14134, where again that approach was approved.
The emerging line of authority to the effect that paragraph 4(b)(iv) of the Policy is a deeming provision providing an exception to the ‘rule' that this is a two stage process requiring a complainant to prove both bad faith registration and bad faith use is discussed in the 16th of the cases currently appearing in the Index of WIPO UDRP Panel Decisions under the topic, “Registration in good faith, usage in bad faith”, namely Ville de Paris v. Jeff Walter, WIPO Case No. D2009-1278:
“The fundamental question that arises for determination can be stated simply: does the absence of bad faith intent by the respondent at the time of acquisition of the disputed domain name inevitably preclude the complainant from succeeding under the Policy, even though the respondent has subsequently used the domain name in bad faith? In this Panel's view, the answer to that question is provided by the express terms of the Policy itself, and that answer is “no”. Like the panelist in the Octogen trio of cases, this Panel finds guidance in answering this question from the analysis and reasoning adopted in the Telstra decision. In Telstra it was noted that, of the four (non-exclusive) scenarios deemed by Paragraph 4(b) of the Policy to be “evidence of registration and use of the domain name in bad faith”, only one of these scenarios – the one described in Paragraph 4(b)(iv) – describes an actual use of the domain name. The other three scenarios describe purposes for which the domain name was registered. As the panelist in the Octogen trio of cases insightfully noted, this fact is relevant not only to the issue under consideration in Telstra – which was whether a passive holding of the domain name following a bad faith registration could satisfy the Paragraph 4(a)(iii) requirement – but also to the issue under consideration in the Octogen trio of cases: namely, whether a bad faith use of a domain name following a non-bad faith acquisition could satisfy the Paragraph 4(a)(iii) requirement. It is relevant to the latter issue because it shows that the Policy expressly deems one particular scenario to be “registration and use of the domain name in bad faith” even though that scenario makes no mention of the mental state of the registrant at the time of acquisition of the domain name. The Policy expressly states that the Paragraph 4(b) scenarios are “without limitation” – that is, the Policy makes clear that there can be other scenarios that are also evidence of registration and use in bad faith. It follows, therefore, that the Policy expressly recognizes that the Paragraph 4(a)(iii) requirement of bad faith can, in certain circumstances, be satisfied where the respondent has used the domain name in bad faith, even though the respondent may not have been acting in bad faith at the time of acquisition of the domain name.”
A detailed review of these cases is to be found in the Validas decision (supra):
“some recent decisions have expressly espoused the idea that subsequent bad faith use may, in certain circumstances, support a finding of bad faith registration; or, as some other Panels have put it, the idea that bad faith registration can be deemed to have occurred even without regard to the state of mind of the registrant at the time of registration, if the domain name is subsequently used to trade on the goodwill of the mark holder. See City Views Limited v. Moniker Privacy Services / Xander, Jeduyu, ALGEBRALIVE, WIPO Case No. D2009-0643; Phillip Securities Pte Ltd v. Yue Hoong Leong, ADNDRC Decision DE-0900226; and Octogen Pharmacal Company, Inc. v. Domains By Proxy, Inc. / Rich Sanders and Octogen e-Solutions, WIPO Case No. D2009-0786 (“the Octogen trio of cases”); Denver Newspaper Agency v. Jobing.com LLC, NAF Claim No. 1282148; Ville de Paris v. Jeff Walter, WIPO Case No. D2009-1278 and Country Inns & Suites By Carlson, Inc. v. Shuai Nian Qing, La Duzi, WIPO Case No. D2009-1313. See also Hertz System, Inc. v. HVH Worldwide Ventures, LLC, WIPO Case No. D2009-1181; Hertz System, Inc. v. Kwan ming Lee, WIPO Case No. D2009-1165; Richard “Cheech” Marin, Tommy Chong v. Traced, Inc., WIPO Case No. D2009-1273; and Zerospam Security Inc. v. Internet Retail Billing, Inc., Host Master, WIPO Case No. D2009-1276 in which this recent approach has been discussed.”
These cases, starting with the Octogen trio of cases in mid-2009, rely heavily on the approach taken by the panellist in Telstra as authority for the proposition that in certain circumstances a domain name may be deemed to have been registered and used in bad faith even though the registration was not in bad faith.
For this Panel, the adoption of paragraph 4(b)(iv) as a deeming provision on the basis of an analysis of the Telstra decision (supra) is unsatisfactory. This Panel has always regarded Telstra as authority for the proposition that proof of both bad faith registration and bad faith use is necessary for a complaint under the Policy to succeed. What else could the panellist in Telstra have meant when he said in paragraph 7.6 of that decision:
“So understood, it can be seen that the requirement in paragraph 4(a)(iii) that the domain name "has been registered and is being used in bad faith" will be satisfied only if the Complainant proves that the registration was undertaken in bad faith and that the circumstances of the case are such that Respondent is continuing to act in bad faith.”?
It is to be noted that the placing of the ‘and' in italics was done by the panelist in that case and was done presumably to emphasise the importance of the word.
However, the Telstra panelist is also the author of the Paris de Ville decision in which he summarises the position thus:
“In summary, it seems clear to this Panel that the intent and effect of the Policy is that the requirement of Paragraph 4(a)(iii) can, in certain circumstances, be met where the respondent has used the domain name in bad faith even though it may have been acquired in good faith. As the Telstra decision states, “the relevant issue is … whether, in all the circumstances of the case, it can be said that the Respondent is acting in bad faith”.”
How can those two seemingly contradictory quotations from the same panelist be reconciled? Whence does the final sentence in the last quote come? It does indeed come from his Telstra decision, but the full quotation reads:
“7.9 This fact does not, however, resolve the question. As discussed in paragraph 7.6, the relevant issue is not whether the Respondent is undertaking a positive action in bad faith in relation to the domain name, but instead whether, in all the circumstances of the case, it can be said that the Respondent is acting in bad faith. The distinction between undertaking a positive action in bad faith and acting in bad faith may seem a rather fine distinction, but it is an important one. The significance of the distinction is that the concept of a domain name “being used in bad faith” is not limited to positive action; inaction is within the concept. That is to say, it is possible, in certain circumstances, for inactivity by the Respondent to amount to the domain name being used in bad faith.”
Accordingly, as can be seen, the passage in question is concerned exclusively with the issue of bad faith use, not registration and is not, in the view of this Panel, support for the proposition advocated in Paris de Ville.
It should not be forgotten that in Telstra the Respondent's motives at time of registration of the domain name in issue were clearly abusive and the sole decision for the panelist was whether absence of any evidence as to the Respondent's proposed use of the domain name precluded a finding of bad faith registration and use under paragraph 4(a)(iii) of the Policy. Registrants do not register domain names for no purpose, so it is logical to assume that a registrant registering a domain name in bad faith is likely to have a bad faith use in mind5. In the common law tradition, the fact that the bad faith use may be a non-use in the sense of a blocking use (e.g. blocking entry to a trade mark register) or a threatened use hanging over the head of the trade mark owner like the Sword of Damocles has never in the experience of the Panel led to a court finding of non-use such as to preclude injunctive relief. That is not to say that that has never happened, but the Panel is not aware of any such instance and ventures to suggest that it will have been a rarity.
As this Panel sees it, for very good reasons the bad faith ‘use' in Telstra was to be inferred from the bad faith nature of the registration. It was not deemed. If the circumstances of the case before this Panel were such that bad faith registration could be inferred from the nature of the current use, the Panel would have no difficulty in finding that the Domain Name had been registered in bad faith and is being used in bad faith. However, in the view of this Panel, there is no proper basis for using Telstra as support for the proposition that the motives of the Respondent at time of registration are irrelevant.
Paragraph 2 of the Policy
Those panelists who have approached paragraph 4(b)(iv) as a deeming provision also pray in aid paragraph 2 of the Policy, which reads:
“Your Representations. By applying to register a domain name, or by asking us to maintain or renew a domain name registration, you hereby represent and warrant to us that (a) the statements that you made in your Registration Agreement are complete and accurate; (b) to your knowledge, the registration of the domain name will not infringe upon or otherwise violate the rights of any third party; (c) you are not registering the domain name for an unlawful purpose; and (d) you will not knowingly use the domain name in violation of any applicable laws or regulations. It is your responsibility to determine whether your domain name registration infringes or violates someone else's rights.”
It has been said by some that insufficient attention has been paid to the registrant's representation and warranty in paragraph 2 of the Policy, that “you will not knowingly use the domain name in violation of any applicable laws or regulations. It is your responsibility to determine whether your domain name infringes or violates someone else's rights”. The Panel in Validas discusses the issue in the following terms:
“This has been said by some panels to support the propositions that (a) the registrant has a duty to conduct an investigation at the time of registration, and (b) even though the domain name was registered in good faith, subsequent breach of the warranty “may be deemed to be retroactive bad faith registration”, Octogen Pharmacal Company, Inc., (supra).
As to (a), in this Panel's view, assuming for present purposes that a registrant has a duty to conduct an investigation at the time of registration and may therefore be presumed to have registered the domain name in bad faith by virtue of constructive awareness of the relevant trademark (for a contrary view, see Balenciaga v. Registrant : Registrant, WIPO Case No. D2009-1410), an investigation would produce nothing by way of forewarning of the ultimate complainant's rights where the relevant trademark does not exist at the time of registration and where none of the exceptional circumstances mentioned in paragraph 3.1 of the WIPO Overview and the cases cited therein (such as ExecuJet Holdings Ltd. v. Air Alpha America, Inc., WIPO Case No. D2002-0669) apply. To this Panel, it follows that, absent such exceptional situations, the appropriate finding is that at the time when the registration was made, it was made in good faith. Likewise, where the domain name was registered with the trademark owner's consent.
As to (b), in Octogen the learned panelist said:
“A party can register or acquire a domain name in good faith, yet use the domain name in the future in such a way that the representations and warranties that the registrant made as of the time of registration are violated. If a party uses the domain name in the future so as to call into question the party's compliance with the party's representations and warranties, this may be deemed to be retroactive bad faith registration.”
To this Panel, the principal difficulty with this reasoning is that, although the warranty was given “as of” the time of registration, a breach of warranty will not be taken to have occurred at the time the agreement containing the warranty was made unless there is to be found a deeming provision to that effect. In the absence of such a provision the breach of warranty will be taken to have occurred when the conduct constituting the breach took place. There is no provision in the warranty itself which deems any breach to have retroactive effect. Thus it is necessary to find a deeming provision elsewhere in the Policy if the idea of finding “retroactive” bad faith registration by reason of breach of warranty is to be supported.”
Paragraph 2 of the Policy is dealt with in the Ville de Paris case (supra) thus:
“According to the panelist in the Octogen trio of cases, this provision not only imposes a duty on the part of the registrant to conduct an investigation at the time of registration, “but also includes a representation and warranty by the registrant that it will not now or in the future use the domain name in violation of any laws or regulations”. Thus, even though a party may register or acquire a domain name in good faith, if it “uses the domain name in the future so as to call into question the party's compliance with the party's representations and warranties, this may be deemed to be retroactive bad faith registration”. A subsequent panel has adopted essentially the same reasoning, to reach essentially the same conclusion: Denver Newspaper Agency v. Jobing.com LLC, NAF Claim No. 0908001282148.
The issue addressed in the Octogen trio of cases is profound, and the panelist addressing them is distinguished. This Panel therefore feels compelled to give close consideration to the analysis set out in those cases. Having done so, this Panel respectfully agrees, in general terms, with the interpretation of the Policy adopted in the Octogen trio of cases. This Panel sees such interpretation as a logical and incremental evolution of panel thinking in light of broader developments within the domain name system, and also one with firm foundations in decisions rendered in the earliest days of the Policy.”
If, as the panelist in Ville de Paris (supra) suggests, “the relevant issue is … whether, in all the circumstances of the case, it can be said that the Respondent is acting in bad faith”, this Panel believes paragraph 2 of the Policy opens up scope for findings of bad faith going well beyond what the architects of the Policy originally had in mind.
This Panel finds it helpful to keep in mind the evidence of Francis Gurry (then WIPO Deputy Director General and Legal Counsel) given to a subcommittee of the Committee on the Judiciary United States House of Representatives on July 28, 1999 just prior to the time the Policy was originally adopted:
“ …. the WIPO Report adopts a minimalist approach to the issues that were addressed in the WIPO Process. The recommendations of the Report deal only with the most urgent and most obvious problems, while recognizing that other problems and issues exist that might usefully, in the course of time and with the benefit of experience gained from the implementation of the recommendations of the Report, also be addressed.
The WIPO Report found ample evidence that a significant problem exists as a result of the intersection of, on the one hand, the largely privately administered and globally accessible domain name system and, on the other hand, the publicly administered and territorially based intellectual property rights system. The most egregious manifestation of this problem is the exploitation in bad faith of the ease and simplicity of obtaining a domain name registration in order to register, as a domain name, the trademark of another person with a view to extracting a premium from the owner of the mark. Significantly, throughout the whole of the WIPO Process, not one voice defended this practice, which is known commonly as cybersquatting. The practice was universally condemned.”
The need to bear in mind that the Policy is (or at least was, at the time of its original recommendation by WIPO and adoption by ICANN) deliberately limited in scope and was not then intended to cover anything other than a very narrow category of disputes has been taken up by a number of panels such as the majority in e-Duction, Inc. v. John Zuccarini, d/b/a The Cupcake Party &Cupcake Movies (supra):
“These assertions demonstrate Respondent's contempt for truth and fair dealing. Nonetheless, the Policy is deliberately limited in scope and, accordingly, unable to address all instances of domain name misuse. Any changes, whether to the conjunctive ‘registration and use' requirement, to the definition of bad faith that does not account for bad faith towards the Internet community as a whole, or to the creation of an equitable rule allowing Panels to rule against a party based on abuse of the Policy and Rules, would have to be publicly debated and formally adopted by ICANN.”
This Panel does not believe that it was ever contemplated by those responsible for introducing the Policy that the Policy would be interpreted to deal with domain names registered in good faith. The panelist in PAA Laboratories GmbH v. Printing Arts America, WIPO Case No. D2004-0338 explores the history of this aspect of the Policy in greater detail and the Panel gratefully adopts the reasoning set out in that decision.
To this Panel that then leads on to a consideration of whether, given the intended scope of the Policy, interpretation of the Policy should be flexible to take account of developments in the marketplace. The Panel in Paris de Ville is seemingly in favour. He talked of the Octogen interpretation as “a logical and incremental evolution of panel thinking in light of broader developments within the domain name system”. The panelist in the PAA Laboratories case, on the other hand, with reluctance deferred to the consensus view (in relation to paragraph 2 and renewals):
“In making its finding, the Panel wishes to clarify that its decision under this element is based on the need for consistency and comity in domain name dispute “jurisprudence”. Were it not for the persuasive force of the cited decisions, this Panel would have expressed the view that paragraph 2 of the Policy demonstrates that references to “registration” in the Policy were probably intended to be references to “registration or renewal of registration.” Absent the consistency of approach which has found favour with numerous earlier panels, this Panel would have seen no good reason for a renewal not to be considered as equivalent to “registration” in the context of the objectives of the Policy.”
In Teradyne Inc. v. 4tel Technology, WIPO Case No. D2000-0026, the panelist took the view that a domain name registered in good faith was not a topic fit for the Policy, but something which should be left to either ICANN or the courts:
“The question whether domain names registered in good faith become infringing is outside the scope of this inquiry. Further support for this interpretation is contained in the example of “bad faith” contained in ‘ 4(b)(i) of the Policy, which contemplates that the domain name must have been registered or acquired “primarily for the purpose of selling, renting or otherwise transferring” the domain name. In this case, it is clear that the domain name was not registered or acquired for this purpose. This Panel is not ready to extend the Policy to cover cases clearly intended to be outside its scope. That is a task for ICANN, or for the courts.”
While noting that the Terradyne supra) approach has recently been the subject of some reappraisal by panelists in cases such as Eastman Sporto Group LLC v. Jim and Kenny, WIPO Case No. D2009-1688, this Panel is of the view that the reference to ICANN is a recognition that if the Policy is to be extended to cover matters not within its scope, that is a matter for the legislators not the panelists. As can be seen above, the panel in e-Duction, Inc. v. John Zuccarini, d/b/a The Cupcake Party &Cupcake Movies (supra) took the same view. As Francis Gurry anticipated in that part of his testimony to the United States Congressional Committee quoted above, other issues can be addressed by the legislators in due course with the benefit of experience gained from the operation of the Policy.
The problem is, however, that amendment of the Policy to address some of the more pressing issues, which arguably the Policy was not designed to cover, is unlikely in the foreseeable future. It is also conceivable that any amendment process undertaken in the current context (especially one in which there remains considerable uncertainty as to the form of any new mechanisms that may operate within ICANN's envisaged new gTLD programme) may (however well intentioned) risk opening a pandora's box of uncertainties about the very instrument (the Policy) which has on the whole proved its value and stability over the course of the past decade. It is these factors which have no doubt prompted much of the re-thinking by panelists concerned to ensure the continuing relevance of the Policy as an instrument responsive to market developments and domain name registration realities. For this Panel, however, such laudible objectives do not justify for their solution removal of the conjunctive requirement, which has hitherto represented such a fundamental pillar of the Policy.
Having at great length explored how other panelists have approached the question of good faith registration and bad faith use, it is now time for the Panel to explain his decision in the particular circumstances of this case to dismiss the Complaint.
In coming to his decision, the following matters (some of which overlap) have weighed heavily in the balance:
1. Until very recently there could fairly have been said to have been a consensus view on the topic. Indeed, the WIPO Overview and the Index indicated a consensus view. The Panel agrees with the panelist in PAA Laboratories that a desire to achieve consensus should be high on the list of priorities. While what had been a pretty clear consensus is now not such a clear consensus, there have nonetheless been a sufficient number of countervailing decisions to the Octogen approach from respected panelists, for the Panel to maintain the approach that he has taken in the past (e.g. Meeza (supra)).
2. While the wording of the Policy allows for various interpretations, the Panel feels more comfortable adopting an interpretation of paragraph 4(b)(iv) which maintains the conjunctive requirement which is so clearly set out in paragraph 4(a)(iii).
3. For reasons already expressed the Panel is not persuaded by the application of Telstra to the issue of bad faith registration under paragraph 4(a)(iii).
4. If paragraph 2 of the Policy can be brought into play to address the issue of bad faith, this Panel is concerned that the scope of the Policy will be extended far beyond its original purpose. Moreover, paragraph 2 of the Policy also arose as an issue in the PAA Laboratories case, on this occasion in relation to the issue of renewals. Renewals will presumably be the next topic for further review if paragraph 2 of the Policy is now to be regarded as a basis for interpreting aspects of paragraph 4 of the Policy. See, for example, Eastman Sporto, (supra).
5. This Panel finds the approach of the panelist in Validas (supra) persuasive on the issue of paragraph 2 of the Policy.
6. This Panel is concerned that if panelists develop their interpretation of the Policy as they go along to meet the needs of trade mark owners who are suffering at the hands of domain name registrants, a stage will be reached where they will be acting beyond their remit. At some stage the issue must be a matter for the legislators and not the panelists. The Panel is concerned that that stage is very close at hand.
7. In finding against the Complainant in this case, the Complainant still has a ready means of redress through the courts in the United States.
Against all the above, the Panel is conscious that a flagrant infringer of the Complainant's trade mark rights appears to be ‘getting away with it'. The Panel deplores the result and is firmly of the view that amendment of the Policy on the conjunctive question (eg. substituting an “or” for the “and”) would in principle be desirable, but the Panel remains of the view that this was not a type of infringement which the Policy as currently framed was intended to cover.
Accordingly, the Panel is not persuaded that the Domain Name was registered in bad faith within the meaning of paragraph 4(a)(iii) of the Policy, and for that reason finds that the Complaint must fail.
For all the foregoing reasons, the Complaint is denied.
Dated: March 12, 2010
1 The evidence indicates that the Domain Name was first registered on October 27, 2003. The Complainant asserts that the Respondent was the registrant at that date. In the absence of a challenge from the Respondent, the Panel accepts that as a fact for the purpose of this administrative proceeding.
2 None of this is supported by evidence, merely assertion, but the Respondent has not challenged any of it and the Panel has no reason to doubt it.
3 At time of registration of the Domain Name the WALKY DOG product was a product of Bice S.r.l., a company which the Complainant has since acquired (see section 4).
4 The 17th of the cases appearing in the Index of WIPO UDRP Panel Decisions under the topic, “Registration in good faith, usage in bad faith.”
5 It is not surprising perhaps that a search of the Index of WIPO UDRP Panel Decisions under the topic, “Registration in bad faith, usage in good faith” results in zero cases.