WIPO Arbitration and Mediation Center
ADMINISTRATIVE PANEL DECISION
A. Nattermann & Cie. GmbH and Sanofi-aventis v. Watson Pharmaceuticals, Inc.
Case No. D2010-0800
1. The Parties
The Complainants are A. Nattermann & Cie. GmbH of Cologne, Germany, and Sanofi-aventis of Paris, France, represented by Selarl Marchais De Candé, France.
The Respondent is Watson Pharmaceuticals, Inc. of California, United States of America (“USA”), represented by Forsyth Simpson Solicitors, United Kingdom of Great Britain and Northern Ireland (“UK”).
2. The Domain Name and Registrar
The disputed domain name <ferrlecit.com> (the “Domain Name”) is registered with MarkMonitor Inc. (the “Registrar”).
3. Procedural History
The Complaint was filed with the WIPO Arbitration and Mediation Center (the “Center”) on May 19, 2010. The Center transmitted its request for registrar verification to the Registrar on May 19, 2010. The Registrar replied the same day, confirming that it had received a copy of the Complaint, that it was the registrar for the Domain Name, that the registration agreement was in English and that it had placed a registrar lock on the Domain Name in compliance with the Uniform Domain Name Dispute Resolution Policy (the ”Policy” or “UDRP”). The Registrar also provided the full contact details held on its WhoIs database in respect of the Domain Name; in relation to the registrant these identified the contact as “Domain Manager Watson Pharmaceuticals, Inc.” Notwithstanding the reference in this entry to “Domain Manager”, the Panel considers that the Respondent is correctly identified as Watson Pharmaceuticals, Inc., as stated in both the Complaint and the Response.
The Center verified that the Complaint satisfied the formal requirements of the 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 paragraphs 2(a) and 4(a) of the Rules, the Center formally notified the Respondent of the Complaint, and the proceedings commenced on May 21, 2010. In accordance with paragraph 5(a) of the Rules, the due date for Response was June 10, 2010. The Response was filed with the Center June 10, 2010. In it the Respondent elected to have the dispute decided by a three-member panel.
The Complainant submitted observations on the Response to the Center by email of 14 June, 2010. In accordance with the Center’s normal practice, these observations were forwarded to the Panel following its appointment for consideration in its discretion.
The Center appointed Jonathan Turner, M. Scott Donahey and Warwick Smith as panelists in this matter on July 26, 2010. Each member of the Panel has submitted the Statement of Acceptance and Declaration of Impartiality and Independence, as required by the Center to ensure compliance with paragraph 7 of the Rules. Having reviewed the file, the Panel is satisfied that the Complaint complied with applicable formal requirements, was duly notified to the Respondent and has been submitted to a properly constituted Panel in accordance with the UDRP, the Rules and the Supplemental Rules.
4. Procedural Ruling
The observations on the Response sent by the Complainant to the Center do not contain any request by the Complainant to admit them as an additional submission but the Panel has nevertheless considered whether it should do so.
Whether supplemental submissions can and should be admitted in proceedings under the UDRP has been considered in many cases. In The E.W. Scripps Company v. Sinologic Industries, WIPO Case No. D2003-0447, the Panel summarised the position as follows:
“The principles adopted and confirmed in these decisions are that additional evidence or submissions should only be admitted in exceptional circumstances, such as where the party could not reasonably have known the existence or relevance of the further material when it made its primary submission; that if further material is admitted, it should be limited so as to minimise prejudice to the other party or the procedure; and that the reasons why the Panel is invited to consider the further material should, so far as practicable, be set out separately from the material itself.
These principles are based on the purpose of the Policy and Rules of providing an expeditious and relatively inexpensive procedure for determining a certain type of domain name dispute, in which each party is entitled to make just one submission. One of the matters which the Panel has to bear in mind is that the admission of a further submission from one party may lead the other party to submit a further document in reply, which may lead to a further submission by the first party, and so on, thereby compromising the procedural economy sought to be established by the Policy and the Rules.”
In this case, the Panel considers that the first point in the Complainant’s observations on the Response is a repetition of a point already made in the Complaint, and that the third point is one which the Complainant could and should have made in the Complaint. The Panel therefore does not admit these points.
By contrast, the second point of the Complainant’s observations responds to a statement made in the Response which, in the Panel’s view, the Complainant could not reasonably have been expected to anticipate. The Panel therefore admits this point.
The Respondent has not asked for an opportunity to reply to the Complainant’s observations. The Panel has nevertheless considered whether the Respondent should be invited to do so. Given the limited significance of the only point in the Complainant’s observations which the Panel is admitting, the Panel considers that it is not necessary or desirable to invite any further submission by the Respondent.
5. Factual Background
The first Complainant is a subsidiary of the second Complainant which is the parent of a leading pharmaceutical group. The first Complainant owns the trademark FERRLECIT which is used for an intravenous treatment of iron deficiency. The trademark is registered in the name of the first Complainant in the USA and other countries.
The Respondent is also a pharmaceutical company.
In 1993 the first Complainant or a predecessor entered into a distribution agreement granting the Respondent an exclusive licence to import, use and sell the product in the USA, Canada and Greece, and a trademark agreement granting the Respondent an exclusive licence to use the FERRLECIT trademark for the product in the same territory.
The Respondent registered the Domain Name in 1999 and used it to promote the FERRLECIT product.
An arbitration between the parties in Switzerland in 2009 resulted in an award which declared that these agreements would expire on December 31, 2009 and ordered the Respondent to cease selling the product after that date and to transfer various documents and materials to the Complainant promptly following that date. However, it appears that the award (at least as quoted in the provided pleadings) did not refer to the Domain Name.
The Respondent has retained the Domain Name following the expiry of the agreements and has directed it to a web page which states that the Respondent no longer markets FERRLECIT and that this product is now being marketed by the second Complainant. The web page goes on to invite readers to submit contact details to receive information from the Respondent about alternatives and to promote an alternative intravenous remedy for iron deficiency.
The second Complainant asked the Respondent to return the Domain Name by letter of January 7, 2010. Following several reminders the Respondent replied on April 21, 2010, offering to transfer it to the second Complainant for $25,000.
6. Parties’ Contentions
The Complainants contend that the Domain Name is identical to the trademark FERRLECIT registered in the name of the first Complainant in the USA and other countries.
The Complainants submit that the Respondent has no rights or legitimate interests in respect of the Domain Name. They state that it is not commonly known by the Domain Name and that it has no current licence, contract or consent to use the FERRLECIT mark in a domain name. The Complainants acknowledge that the parties signed a distribution agreement in 1993 allowing the Respondent to market FERRLECIT in the USA and other countries, but state that this agreement has now terminated, as confirmed by the arbitration award.
The Complainants allege that the Domain Name was registered and is being used in bad faith. They note that the second Complainant requested the return of the Domain Name on January 7, 2010, but (despite repeating the request) did not receive an answer from the Respondent until April 21, 2010, when the latter offered to sell the Domain Name for $25,000. The Complainants submit that the Respondent’s offer to sell the Domain Name for a sum greatly exceeding the expenses incurred in registering it shows that it was registered for the purpose of selling, renting or otherwise transferring the Domain Name to the owner of the mark for valuable consideration in excess of the Respondent’s out-of-pocket costs directly related to the Domain Name. The Complainants accordingly rely on paragraph 4(b)(i) of the UDRP.
The Complainants also note that the Respondent is using the Domain Name to promote a competing product and to build a database for its own commercial benefit. The Complainants submit that the Respondent has intentionally attempted to attract Internet users to its website for commercial gain by creating a likelihood of confusion with the Complainant’s mark as to the source, sponsorship or affiliation of the website.
The Complainant requests a decision that the Domain Name be transferred to A. Nattermann & Cie. GmbH.
The Respondent does not make any submission in response to the Complainants’ contention that the Domain Name is identical to the mark FERRLECIT in which the first Complainant has rights.
The Respondent submits that it used the Domain Name in connection with a bona fide offering of goods before any notice to it of the dispute and that this demonstrates that it has rights or legitimate interests in the Domain Name in accordance with paragraph 4(c)(i) of the UDRP.
The Respondent states that it registered the Domain Name in 1999 while the distribution and trademark agreements between the parties were in force and that the Complainants were aware of its registration and use of the Domain Name. The Respondent adds that the Complainants did not include the Domain Name in the arbitration between the parties and that it was not mentioned in the award. The Respondent emphasizes that its registration of the Domain Name occurred many years prior to any dispute between the parties and was in connection with a bona fide offering of goods or services.
The Respondent also claims that it invested significant time and money in connection with setting up, hosting and maintaining the Domain Name and that these costs from 1999 to the present have exceeded $100,000. According to the Respondent, it owns significant goodwill attached to the Domain Name independent of any goodwill attached to the FERRLECIT trademark or product.
The Respondent maintains that its offer to sell the Domain Name to the second Complainant does not alter the fact that the Domain Name was not registered or acquired primarily for the purpose of selling, renting or otherwise transferring the Domain Name to the Complainants or a competitor of the Complainants for valuable consideration in excess of its out of pocket costs directly related to the Domain Name. The Respondent explains that it offered to sell the Domain Name for a reasonable price in light of the time and costs incurred in registering, maintaining and promoting the Domain Name and invited the second Complainant to make an alternative offer in order to settle the matter amicably.
The Respondent denies that the Domain Name was registered in order to prevent the Complainants from reflecting their mark in a corresponding name, or to disrupt their business, or in an intentional attempt to attract Internet users to its website for commercial gain by creating a likelihood of confusion with the Complainants’ mark as to the source, sponsorship, affiliation or endorsement of its website or of a product or service on its website.
The Respondent denies that its current use of the Domain Name is in bad faith. It points out that its website immediately informs visitors that the Respondent no longer distributes the FERRLECIT product and directs them to the second Complainant for further information about it.
Finally, the Respondent submits that the two elements of the third requirement of the UDRP – bad faith registration and use – are cumulative requirements, referring to a number of decisions on this point.
C. Complainants’ observations on the Response
In point 2 of their observations on the Response the Complainants point out that the $100,000 allegedly spent by the Respondent in setting up, hosting and maintaining its website at the Domain Name cannot correspond to its out-of-pocket costs directly related to the Domain Name.
However, the Complainants do not dispute the Respondent’s statement that they were aware of its registration and use of the Domain Name while the agreements between the parties were in force.
7. Discussion and Findings
In accordance with paragraph 4(a) of the Policy, in order to succeed in this proceeding in relation to the Domain Name, the Complainants must prove (i) that the Domain Name is identical or confusingly similar to a mark in which one or both of them has rights; (ii) that the Respondent has no rights or legitimate interests in respect of that Domain Name; and (iii) that the Domain Name has been registered and is being used in bad faith.
It is clear from the terms of the UDRP and numerous decisions under it that these are cumulative requirements which must all be satisfied for a complaint to succeed in relation to a domain name. They will therefore be considered in turn.
A. Identical or Confusingly Similar
The Panel finds on the undisputed evidence that the Domain Name is identical to the mark FERRLECIT in which the first Complainant has registered rights. It is well established that when comparing a disputed domain name with a complainant’s mark under paragraph 4(a)(i) of the UDRP, the generic top level domain suffix should be discounted. The first requirement of the UDRP is satisfied.
B. Rights or Legitimate Interests
The Panel finds on the evidence that the Respondent no longer has any right or legitimate interest in respect of the Domain Name following the expiry of the distribution and trademark agreements between the parties at the end of 2009 as confirmed in the arbitration award.
The Panel considers that paragraph 4(a)(ii) of the UDRP refers to a right or legitimate interest existing at the time of the complaint. The present tense is used and the inclusion of this requirement would make no sense if it did not refer to the present. A registrant who did not have any right or legitimate interest at the date of registration may subsequently acquire a right or legitimate interest, for example by using the disputed domain name in connection with a bona fide offering of goods. Equally a registrant who had a right or legitimate interest may lose it, for example if the trademark owner legitimately withdraws its consent or the registrant ceases to distribute the trademark owner’s goods or uses the domain name to promote rival products: see Lonely Planet Publications Pty Ltd v. Mike Tyler; WIPO Case No. D2004-0670, and Levantur, S.A. v. Media Insight, WIPO Case No. D2009-0608.
The Panel recognizes that paragraph 4(c)(i) of the UDRP does not refer explicitly to a continuing use of the domain name in connection with a bona fide offering of goods. However, the Panel considers that this provision must be read in conjunction with paragraph 4(a)(ii) which it exemplifies.
The Panel therefore finds that the second requirement of the UDRP is satisfied.
C. Registered and Used in Bad Faith
It is clear from the terms of paragraph 4(a)(iii) of the UDRP and confirmed by numerous decisions under it that the two elements of this third requirement are cumulative; both registration and use in bad faith must be proved for a complaint to succeed. See, for example, World Wrestling Federation Entertainment, Inc. v. Michael Bosman, WIPO Case No. D1999-0001 and Telstra Computers Ltd v. Nuclear Marshmallows, WIPO Case No. D2000-0003.
The Panel finds that the Domain Name is being used in bad faith. The Respondent has no entitlement to use a domain name consisting of the first Complainant’s mark. The Respondent is using the Domain Name to attract Internet users looking for information about the Complainants’ product to its website by deception. Internet users naturally assume that a website at the Domain Name is a website of or endorsed by the Complainants. The Respondent is profiting from this deception to obtain valuable marketing information and to promote a rival product.
The Panel does not consider that all those visiting the Respondent’s website as a result of this deception are disabused by its content. Indeed, many of the visitors might suppose that the content of the website must have been agreed between the parties. But in any case, it is well established that the posting of content making it clear that the website is not approved by the owner of a trademark contained in the domain name does not avoid a finding of bad faith. On the contrary, bad faith has often been found where the registrant uses a domain name containing a rival’s mark to attract Internet users by initial confusion to its website where other products or services are promoted and/or sold: see, for example, Government Employees Insurance Company v. Netsolutions Proxy Services, WIPO Case No. D2004-0919, Future Brands LLC v. Mario Dolzer, WIPO Case No. D2004-0718, Bass Hotels & Resorts, Inc. v. Mike Rodgerall, WIPO Case No. D2000-0568, and Chargers Football Company v. One Sex Entertainment Co., a/k/a Chargergirls.net, WIPO Case No. D2000-0118.
The more difficult question is whether the Domain Name was registered in bad faith. The Complainant invokes paragraph 4(b)(i) of the UDRP, relying on the fact that the Respondent offered to sell the Domain Name to the Complainant for $25,000 in April 2010. But paragraph 4(b) states:
“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:
(i) circumstances indicating that you have registered or you have acquired the domain name primarily for the purpose of selling, renting, or otherwise transferring the domain name registration to the complainant who is the owner of the trademark or service mark or to a competitor of that complainant, for valuable consideration in excess of your documented out-of-pocket costs directly related to the domain name”. [emphasis added]
In many cases an offer by a respondent to sell a domain name for an elevated price indicates that it registered or acquired the domain name wholly or primarily for that purpose. This inference may readily be drawn where the offer for sale is made shortly after the domain name is registered or acquired, or where there is no other credible reason why the respondent registered the domain name.
By contrast, in this case, the offer for sale was made more than ten years after the Respondent registered the Domain Name and the Respondent had a very credible reason for registering the Domain Name in 1999, namely to promote the legitimate sale of the FERRLECIT product under its agreements with the first Complainant or its predecessor. The Respondent has stated that this was its purpose in its certified Response and the Complainants have not produced any evidence to the contrary. The Panel considers it most likely that the Respondent had no intention of selling the Domain Name to the Complainants when it registered it in 1999; but even if this was one of the Respondent’s purposes, the Panel is not satisfied on the evidence that this was its primary purpose. The Panel cannot find that the Domain Name was registered in bad faith on the basis that paragraph 4(b)(i) of the UDRP applies.
In a number of cases Panels have held that a domain name was registered in bad faith on the grounds that the respondent has subsequently acted in bad faith. In some of these cases, the Panel has inferred from the respondent’s subsequent conduct that it acted in bad faith when it registered the domain name: see, for example, Omnigraphics Capital (Pty) Ltd. v. Fleximount, Guy Langevin, WIPO Case No. D2004-0471, and R&M Italia SpA, Tycon Technologies SrL v. EnQuip Technologies Group, Inc., WIPO Case No. D2007-1477.
However, in other cases Panels have held that where the legitimacy of a registration is subject to compliance with certain conditions, a subsequent non-compliance with those conditions may make it a registration in bad faith, even if the registrant was intending to comply with the conditions when it registered the domain name: see UVA Solar GmbH & Co K.G. v. Mads Kragh, WIPO Case No. D2001-0373; Exel Oyj v. KH Trading, Inc., WIPO Case No. D2004-0433; City Views Limited v. Moniker Privacy Services / Xander, Jeduyu, ALGEBRALIVE, WIPO Case No. D2009-0643; Octogen Pharmacal Company, Inc. v. Domains By Proxy, Inc. / Rich Sanders and Octogen e-Solutions, WIPO Case No. D2009-0786, and Ville de Paris v. Jeff Walter, WIPO Case No. D2009-1278.
In the Octogen case, the Panel referred to the representation in paragraph 2 of the UDRP that the registrant “will not knowingly use the domain name in violation of any applicable laws or regulations”. The Panel in that case considered that this negated the temporal distinction suggested in paragraph 4(a)(iii) of the UDRP between the past registration and present use of the domain name which must both be in bad faith. However, paragraph 2 of the UDRP contains some representations relating to the time of registration and other representations relating to the future. The majority of the present Panel considers that the former may be relevant to bad faith registration while the latter may be relevant to bad faith use. In any case, paragraph 2 of the UDRP does not determine the ambit of the administrative proceeding specified in its paragraph 4. On the contrary, it is clear that the criteria specified in paragraph 4 are not coterminous with the representations in paragraph 2 and in particular with the representation relied on in the Octogen case.
In the Ville de Paris case, the Panel referred to paragraph 4(b)(iv) of the UDRP as supporting the view that a complainant may succeed on the basis of subsequent misuse of a domain name originally registered without any bad faith intent. However, the majority of the Panel draws the opposite conclusion from the terms of paragraph 4(b)(iv).
Paragraph 4(b) states:
“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” [emphasis added]
Thus the abuse of a domain name as specified in paragraph 4(b)(iv) of the UDRP is evidence of bad faith registration and use but is not conclusive. It may be rebutted by contrary evidence that the registration was in fact made in good faith. Indeed, it is difficult to imagine a case in which use of a domain name as specified in paragraph 4(b)(iv) of the UDRP could not be in bad faith. It seems to follow that the UDRP’s characterization of such abuse as only evidence of bad faith registration and use is inconsistent with the view that subsequent misuse in itself causes the registration to have been made in bad faith.
The UDRP is not a statute, but rather derives its legal force from being a contract accepted by the respondent in the registration agreement and by the complainant in its complaint1. However, in its preparation and function the UDRP resembles to some extent an international convention and it may be appropriate to follow the principles identified in the Vienna Convention on the Law of Treaties when interpreting and applying the UDRP. Article 31 of this Convention provides:
“1. A treaty shall be interpreted in good faith in accordance with the ordinary meaning to be given to the terms of the treaty in their context and in the light of its object and purpose.
2. The context for the purpose of the interpretation of a treaty shall comprise, in addition to the text, including its preamble and annexes:
(a) any agreement relating to the treaty which was made between all the parties in connexion with the conclusion of the treaty;
(b) any instrument which was made by one or more parties in connexion with the conclusion of the treaty and accepted by the other parties as an instrument related to the treaty.
3. There shall be taken into account, together with the context:
(a) any subsequent agreement between the parties regarding the interpretation of the treaty or the application of its provisions;
(b) any subsequent practice in the application of the treaty which establishes the agreement of the parties regarding its interpretation;
(c) any relevant rules of international law applicable in the relations between the parties.
4. A special meaning shall be given to a term if it is established that the parties so intended.”
Article 32 provides:
“Recourse may be had to supplementary means of interpretation, including the preparatory work of the treaty and the circumstances of its conclusion, in order to confirm the meaning resulting from the application of article 31, or to determine the meaning when the interpretation according to article 31:
(a) leaves the meaning ambiguous or obscure; or
(b) leads to a result which is manifestly absurd or unreasonable.”
On this basis, the UDRP should be interpreted in accordance with the ordinary meaning to be given to its terms in the context of other documents adopted in connection with it (such as the Rules) and in the light of its object and purpose. Recourse to travaux préparatoires should be limited to confirming the meaning so established or determining the meaning when this approach leaves it ambiguous, obscure or manifestly absurd or unreasonable.
However, in the view of the majority of the Panel, the resolution of the present issue is the same whichever approach to interpretation is used. WIPO’s Final Report on the First WIPO Internet Domain Name Process established the concepts and much of the wording of the UDRP as subsequently adopted. This report must be regarded as the primary travail préparatoire and the most significant extrinsic evidence of the object and purpose of the UDRP.
After discussing the pros and cons and levels of support for wider and narrower approaches, the WIPO Final Report concluded at paragraph 168:
“We are persuaded by the wisdom of proceeding firmly but cautiously and of tackling, at the first stage, problems which all agree require a solution. It was a striking fact that in all the 17 consultation meetings held throughout the world in the course of the WIPO Process, all participants agreed that ‘cybersquatting’ was wrong. It is in the interests of all, including the efficiency of economic relations, the avoidance of consumer confusion, the protection of consumers against fraud, the credibility of the domain name system and the protection of intellectual property rights, that the practice of deliberate abusive registrations of domain names be suppressed.”
Paragraph 170 indicated what was understood by the term “cybersquatting”, namely: “deliberate, bad faith abusive registration of a domain name in violation of rights in trademarks and service marks”, before going on to say that it was desirable to use the term “abusive registration” and give it a more precise meaning.
Paragraph 171 and Schedule 4 then set out a definition of abusive registration in terms substantially the same (at any rate so far as relevant to this issue) as the UDRP as subsequently adopted, in particular with the cumulative requirement that “the domain name has been registered and is used in bad faith”.
The WIPO Final Report also recognised in paragraph 149(v) that:
“it is desirable that the use of the administrative procedure should lead to the construction of a body of consistent principles that may provide guidance for the future”.
Subsequent attempts by some stakeholders to broaden the language, in particular by making the requirements of bad faith registration and bad faith use alternatives rather than conjunctive, were unsuccessful, and the conjunctive requirement was retained in the UDRP as adopted. Professor Froomkin, who participated in these discussions, has recorded2 that:
“In leaving WIPO’s language in this section basically unchanged, ICANN resisted a forceful call by the International Trademark Association (‘INTA’), among others, to change the ‘and’ in sub-section (iii) (‘your domain name has been registered and is being used in bad faith’) to an ‘or.’ Both sides of this debate had some valid points. Trademark partisans argued that it would be difficult to prove the motive for a registration after the fact. Furthermore, since trademark violations turn on use, it should suffice to show bad-faith use to establish a violation; a hypothetical pure-hearted registrant gone bad should not escape the policy. In addition, trademark partisans worried that wily cybersquatters would register domains in bad faith, fully intending to ransom to mark holders, but would not actually use them to forestall any finding of bad-faith use or might hatch complex schemes in which one person registers a name but leases or transfers to another who actually uses it.
Registrant partisans countered that current trademark law, at least in the United States, was quite clear that mere registration of a domain name, without some kind of commercial use, did not constitute trademark infringement. Although courts had held that offering a domain name for sale was commercial use, it could not follow that a plaintiff’s psychic conclusion that warehousing was in bad faith could substitute for actual conduct. They also argued that, large-scale cybersquatters excepted, the only way to tell that a registration was in bad faith was to look at subsequent conduct, i.e., use, and that the two therefore should not be separated. Furthermore, as noted below, ICANN has greatly broadened the evidence that would suffice to find an intent to profit by selling to the complainant. The small drafting committee empaneled by ICANN deadlocked on this issue, and ICANN Counsel Louis Touton single-handedly decided it in favor of ‘and.’ In practice, however, this distinction appears to have been completely lost on numerous arbitrators, who have read ‘and’ as if it meant ‘or.’“
This account is corroborated by the Second Staff Report of ICANN in the passage quoted by the dissenting member of this Panel below.
The majority of the Panel considers that Professor Froomkin’s account is entirely consistent with the view that bad faith use can be evidence of bad faith registration without in itself constituting bad faith registration and without eliding the two concepts.
In summary, although some proposed a broader scope both before and after the WIPO Final Report, a narrower scope (and in particular a conjunctive requirement of bad faith registration and use) was adopted in the WIPO Final Report and retained thereafter in the UDRP as adopted.
The majority of the present Panel is not persuaded to depart from the ordinary meaning of paragraph 4(a)(iii) of the UDRP and the long line of previous decisions which have required bad faith to be shown at the time of registration, albeit that such bad faith can be inferred in appropriate cases from the respondent’s subsequent conduct.
The majority of this Panel is reinforced in this view by a number of recent decisions, including decisions of three-member Panels, which have rejected the re-evaluation of this issue in the Octogen case: see Camon S.p.A. v. Intelli-Pet, LLC, WIPO Case No. D2009-1716; BioClin B.V v. MG USA, WIPO Case No. D2010-0046; Heraeus Kulzer GmbH v. Dr. Walt Stoll, WIPO Case No. D2010-0137; Tata Communications International Pte Ltd (f/k/a VSNL International Pte Ltd) v. Portmedia Inc. / TRUEROOTS.COM c/o Nameview Inc. Whois, WIPO Case No. D2010-0217; Burn World-Wide, Ltd. d/b/a BGT Partners v. Banta Global Turnkey Ltd, WIPO Case No. D2010-0470; India Infoline Ltd. v. Myles Hare, WIPO Case No. D2010-0542; Editions Milan v. Secureplus, Inc., WIPO Case No. D2010-0606, and RapidShare AG and Christian Schmid v. The holder of the domain name rapidshare.net, WIPO Case No. D2010-0598.
As observed in the Octogen case, this is the generally accepted panel view. And as stated in Guildline Instruments Limited v. Anthony Anderson, WIPO Case No. D2006-0157,
“A long line of decisions has held that the first of these conditions requires that the original registration, or possibly a subsequent acquisition, of the Domain Name was in bad faith, and that the maintenance or renewal in bad faith of a registration originally made in good faith does not suffice: see Telaxis Communications Corp. v. William E. Minkle, WIPO Case No. D2000-0005, Teradyne Inc v. 4tel Technology, WIPO Case No. D2000-0026, Smart Design LLC v. Carolyn Hughes, WIPO Case No. D2000-0993, e-Duction, Inc. v. John Zuccarini, d/b/a The Cupcake Party & Cupcake Movies, WIPO Case No. D2000-1369, Weatherall Green & Smith v. Everymedia.com, WIPO Case No. D2000-1528, Village Resorts Ltd v. Steven Lieberman, WIPO Case No. D2001-0814, Substance Abuse Management, Inc. v. Screen Actors Modesl International, Inc., WIPO Case No. D2001-0782, Gamer.tv Limited v. Bestinfo, WIPO Case No. D2004-0320, PAA Laboratories GmbH v. Printing Arts America, WIPO Case No. D2004-0338, Green Tyre Company Plc. v. Shannon Group, WIPO Case No. D2005-0877.
In The E.W. Scripps Company v. Sinologic Industries, WIPO Case No. D2003-0447, the panel expressed the view that ‘registered in bad faith’ could cover maintaining a domain name on the register in bad faith, but found that the original registration had in any event been in bad faith. In WIPO Case No. D2004-0338, cited above, the panel considered that ‘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’’.
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.”
Following the generally accepted view, the majority of the Panel considers the critical question in the present case to be whether on the totality of the evidence and taking into account the evidentiary presumption in paragraph 4(b)(iv) of the UDRP, the Complainant has proved that the Respondent acted in bad faith when it registered the Domain Name in 1999.
The majority of the Panel notes that the registration of the Domain Name was consistent with the agreements between the parties, that the Complainants did not object to it prior to the expiry of these agreements even though they knew of it3, and that the Complainants did not complain about it in the arbitration. On the balance of probabilities, the Panel concludes that the Respondent registered the Domain Name in good faith to promote the sale of the FERRLECIT product under its agreements with the first Complainant. On the totality of the evidence, the majority of the Panel finds that the Respondent did not register the Domain Name in bad faith.
It follows that the third requirement of the UDRP is not satisfied and the Complaint must therefore be rejected.
For all the foregoing reasons, the Complaint is denied.
M. Scott Donahey
Dated: August 31, 2010
I respectfully dissent. In this Panel’s view, the majority opinion gives short shrift to well-established case law that long predates the analysis in the Octogen trio of cases. This case law holds that when the use of a trademark in a domain name is conditional on the performance of certain provisions of agreements entered into between Complainant and Respondent or where the use of a trademark in a domain name is conditional upon the continued relationship established by the parties under those agreements, the failure to perform those conditions or the termination of that relationship and the continued use of the trademark in the domain name constitutes registration of the domain name in bad faith. Moreover, under all the facts and circumstances of the case, Respondent can be said to have been acting in bad faith under the Octogen analysis.
The facts are fairly clear-cut. Complainant’s FERRLECIT marks date back to 1951. Complaint, Annexes 6 through 8. The parties entered into a Distribution Agreement on June 23, 1993 and a Trademark Agreement on August 26, 1993. Complaint, Annexes 9 and 10. The Trademark Agreement gave respondent the right to use the trademark “during the term of this Agreement.”4 Complaint, Annex 10, Art. 1. Complainant paid all the cost for registering the trademark in Respondent’s territory. Complaint, Annex 10, Art. 2. The domain name incorporating the trademark was registered on March 8, 1999. The consent judgment in the lawsuit between the two was entered September 17, 2009. Complaint, Annex 11. The consent judgment confirmed an arbitration award between the parties dated May 18, 2009. Id. The arbitration award and judgment concerned the two contracts entered into in 1993. Id., at 1(d) and (e). The Distribution and Trademark Agreements were held to have terminated on December 31, 2009. Consent Judgment, Annex 11, at 1(g) and (2). There was no mention of the domain name itself in the judgment, presumably because the contracts at issue in the arbitration and the subsequent judgment predated the existence of the domain name. Respondent’s right to use the trademark terminated as of that date by the terms of the Trademark Agreement and because the parties’ relationship under the Distribution Agreement terminated as of that date. Respondent continued to use the trademark in the domain name in violation of the Trademark Agreement terms.
In 2001, the eminent panelist David Perkins in the case of UVA Solar GmbH & Co. K.G. v. Mads Kragh, WIPO Case No. D2001-0373 held that a “registration of a domain name can lose its bona fides if the registrant subsequently breaches one of the terms upon which he was authorized to register it. Here, that breach is the Respondent’s continued holding of the domain name in issue beyond the temporal limit of his distributorship for Denmark . . . . * * * Since the Respondent’s Danish distributorship for [the products] has ceased – indeed, it came to an end in late 1999/early 2000 – there can be no good faith reason for the Respondent to retain the domain name”. To the same effect are the cases Omnigraphics Capital (Pty) Ltd v. Fleximount, Guy Langevin, WIPO Case No. D2004-0471 (“It remains bad faith on Respondent’s part to persist with retaining the registration to the Domain Names now that the agreement between Complainant and First Respondent has terminated. The Respondent had an ulterior motive from the beginning in registering the domain names.”); Exel Oyj v. KH Trading, Inc., WIPO Case No. D2004-0433 (“The Panel notes that the Respondent’s capacity as the Complainant’s retailer had come to an end. Thus in the absence of a transfer of the Domain names to the Complainant, the Respondent has failed to fulfill the first condition.”); R&M Italia SpA, Tycon Technoglass Srl v. EnQuip Technologies Group, Inc., WIPO Case No. D2007-1477 (“The respondent’s authority to register the disputed domain name had been […]of given subject to certain terms and conditions; breach of such conditions can alter what would otherwise have appeared to have been a bona fide registration”).
Under the Octogen analysis, under the facts and circumstances listed above, Respondent could be said to be acting in bad faith. However, this panel wishes to clarify the Octogen analysis in light of the decision in Camon S.p.A. v. Intelli-Pet, LLC, WIPO Case No. D2009-1716. The Camon decision, by a highly regarded panelist and one for whom this panelist has the greatest respect, is both cogent and closely reasoned. However, largely through this panelist’s failure to express his views with sufficient clarity and this panelist’s careless use of the term “deem” I believe this panelist’s views and those of the panelist in Telstra Corporation Limited v. Nuclear Marshmallows, WIPO Case No. D2000-0003 (“Telstra”) and Ville de Paris v. Jeff Walker, WIPO Case No. D2009-1278 (“Ville de Paris”) may have been misconstrued. Whether or not a panelist agrees with our position, it is important that it be stated with the requisite clarity, so that those who may wish to critique or disagree with it are not setting up a straw man.
In this panelist’s view, a first step in the analysis of the Policy should be an examination of the relevant rules of construction. It is admitted that the Policy is not a statute. It was not enacted by an elected legislative body, but rather was ultimately the decision of the Board of ICANN, a not-for-profit corporation which lacks shareholders to whom it is answerable, and was based on staff recommendations following a review of the recommendations that WIPO made after the extensive global outreach that WIPO conducted. However, it does constitute a system of rules designed to remedy a specific wrong, much the same as a statute. Therefore, this panelist believes that the rules of statutory construction seem the most appropriate rules to apply to the UDRP.
Second, this panelist believes it is appropriate to examine the legislative history to the extent that it can be determined where a formal legislative record is absent. At the time that this panelist prepared the decision in World Wrestling Federation Entertainment, Inc. v. Michael Bosman, WIPO Case No. D1999-0001, the most recent legislative history available was the rather terse account set out in the Second Staff Report on Implementation Documents for the Uniform Dispute Resolution Policy, submitted to the ICANN Board meeting of October 24, 1999 (the “Second Staff Report”). Since that time articles have been published that detail a personal account of the process that resulted in the final form of the UDRP.
Finally, in this panelist’s view, one should examine the extent to which there are indications in the Policy language , the Rules, or the legislative history that suggest that the language of and scope of the policy were intended to be strictly construed or, on the other hand, whether the panelists were intended to exercise discretion in the receipt of and evaluation of evidence, especially evidence of “bad faith” and “rights and legitimate interests”, two of the central issues in the determination of “bad faith registration and use”.
A. Rules of Statutory Construction
One of the most venerable rules of statutory construction is the so-called “mischief rule” or the Rule in Heydon’s Case (1584). According to this maxim, the court should examine the state of the law prior to the passage of the legislation in order to determine what “mischief” the statute was intended to prevent.
The modern version of the “mischief rule” in the United Kingdom is the purposive approach. In Pepper v. Hart,  AC 593, the House of Lords set out the parameters of the purposive approach:
The ever increasing volume of legislation must inevitably result in ambiguities of statutory language which are not perceived at the time the legislation is enacted. The object of the court in interpreting legislation is to give effect so far as the language permits to the intention of the legislature. If the language proves to be ambiguous I can see no sound reason not to consult Hansard to see if there is a clear statement of the meaning that the words were intended to carry. The days have long passed when the courts adopted a strict constructionist view of interpretation which required them to adopt the literal meaning of the language. The courts now adopt a purposive approach which seeks to give effect to the true purpose of legislation and are prepared to look at much extraneous material that bears upon the background against which the legislation was enacted. Why then cut ourselves off from the one source in which may be found an authoritative statement of the intention with which the legislation is placed before Parliament?
A similar approach has been adopted by the European Court of Justice through the European Communities Act. The courts are charged with attempting to determine the purpose behind the statute, and then are charged with interpreting the statute in light of the purpose. A similar approach is taken in Canada, where it is called the “modern approach” or “modern rule”. See Rizzo & Rizzo Shoes, Ltd. (Re),  1 S.C.R. 27, 1998 Can LII 837 (S.C.C.)
In the United States the law is similar and emphasizes a need to harmonize and give effect to all parts of a statute:
Statutory construction is a holistic endeavor. A provision that may seem ambiguous in isolation is often clarified by the remainder of the statutory scheme, because the same terminology is used elsewhere in a context that makes its meaning clear or because only one of the permissible meanings produces a substantive effect that is compatible with the rest of the law. United Savings Assoc. v. Timbers of Inwood Forest Associates, Ltd., 484 U.S. 365 (1988);
A court must, if possible, give effect to every clause and word of a statute. Negonsott v. Samuels, 507 U.S. 99 (1993);
Every part of a statute must be viewed in connection with the whole so as to harmonize all parts, if practicable, and give sensible and intelligent effect to each for it is not meant to be presumed that the legislature intended any part of a statute to be without a meaning. General Motors Acceptance Corp. v. Whisnant, 387 F. 2d 774 (5th Cir. 1968).
B. The Purpose for Which the UDRP was Intended
1. The Green Paper and the White Paper
There can be little doubt as to the intended purpose of the UDRP. The National Telecommunications and Information Administration (“NTIA”), an agency of the United States Chamber of Commerce, at the time charged with managing all aspects of the Internet Root System, issued two statements in 1998 regarding the establishment of what later became ICANN and the purpose for which what later became the UDRP was intended. The first of these, issued on January 30, 1998, was A Proposal to Improve the Technical Management of Internet Names and Addresses, commonly known as the “Green Paper”. In the Green Paper, NTIA defined the purposes for what was to become ICANN:
We propose the creation of a private, not-for-profit corporation (the new corporation) to manage the coordinated functions in a stable and open institutional framework. The new corporation should operate as a private entity for the benefit of the Internet as a whole. The new corporation would have the following authority:
1. To set policy for and direct the allocation of number blocks to regional number registries for the assignment of Internet addresses;
2. To oversee the operation of an authoritative root server system;
3. To oversee policy for determining, based on objective criteria circumstances under which new top-level domains are added to the root system; and
4. To coordinate the development of other technical protocol parameters as needed to maintain universal connectivity on the Internet.
The Green Paper also set out the purposes for which the dispute resolution mechanism, the UDRP, was intended:
It is important to keep in mind that trademark/domain name disputes arise very rarely on the Internet today. NSI, for example, has registered millions of domain names, only a tiny fraction of which have been challenged by a trademark owner. But where a trademark is unlawfully used as a domain name, consumers may be misled about the source of the product or services offered on the Internet, and trademark owners may not be able to protect their rights without very expensive litigation.
This panelist believes that a fair reading of the above paragraph discloses the following purposes, in the order they are listed above:
1. To prevent consumers from being misled as to the source of the products or services they are seeking on the Internet;
2. To provide trademark owners with a relatively inexpensive mechanism by which they would be able to protect their rights.
On June 5, 1998, NTIA issued its Statement of Policy on the Management of Internet Names and Addresses, commonly known as the “White Paper”. WIPO was charged with undertaking a process to: develop recommendations for a uniform approach to resolving trademark/domain name disputes involving cyberpiracy as opposed to conflicts between trademark holders with legitimate competing rights, (2) recommend a process for protecting famous trademarks in the generic top level domains, and (3) evaluate the effects, based on studies conducted by independent organizations, such as the National Research Council of the National Academy of Sciences, of adding new gTLDs and related dispute resolution procedures on trademark and intellectual property holders. These findings and recommendations could be submitted to the board of the new corporation for its consideration in conjunction with its development of registry and registrar policy and the creation and introduction of new gTLDs. (Emphasis added.)
The only limitation on the scope of the UDRP discussed in the Green Paper is that the dispute resolution mechanism should not include “conflicts between trademark holders with legitimate competing rights”.
The White Paper iterated the purposes for which the dispute resolution mechanism was intended:
When a trademark is used as a domain name without the trademark owner’s consent, consumers may be misled about the source of the product of service offered on the Internet, and trademark owners may not be able to protect their rights without very expensive litigation.
Thus, any interpretation of the UDRP (and any dispute resolution mechanisms designed for the potential new gTLDs) should, as far as possible, 1) serve to protect consumers from being misled as to the source of the product or service offered on the Internet, and 2) provide a relatively inexpensive process in which trademark owners can vindicate their rights.
Moreover, an interpretation of the UDRP should, as far as possible, give effect to every clause and word contained therein. The UDRP should be read as a whole, so as to harmonize its parts. In this panelist’s view, in performing this task, the interpreter should, to the extent possible, consult the legislative history in arriving at an interpretation.
2. The Second Staff Report
At the time this panelist prepared the first UDRP decision, the most recent legislative history that was available was contained in the Second Staff Report. The Second Staff Report very briefly summarized the comments it received going to the scope of the definition of “abusive registration”:
[The comments of the trademark interests] suggested that the definition should be expanded to include cases of either registration or use in bad faith, rather than both registration and use in bad faith. 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, at 4.5, a.
Thus, as this panelist reads it, we know at least one of the reasons that commentators recommended bad faith registration or use: some registrants were registering domain names in bulk and were not using them. These commentators believed that the UDRP as proposed would not reach this. We also know that the WIPO Report, the DNSO recommendation, and the registrars-group recommendation all recommended registration and use, but the Second Staff Report is silent as to the reason for this recommendation.
3. The WIPO Final Report
It is interesting to note that in The Management of Internet Names and Addresses: Intellectual Property Issues, Final Report of the WIPO Internet Domain Name Process, April 30, 1999 (the “WIPO Final Report”), the four examples of the registration and use of a domain name in bad faith do not offer reasoning for the various provisions defining abusive registrations.
The WIPO Final Report recommends that the domain name registrant should represent “to the best of [the registrant’s] knowledge and belief, the registration of the domain name does not interfere with or infringe the intellectual property of another party . . . .” WIPO Final Report, at 106 – 109. “This recommendation received broad support.” Id., at 107. Some commentators protested that this would place an unreasonable burden on registrants, since it is virtually impossible to know all trademark registrations on a global basis. Id. WIPO stressed that the representation was limited “to the best of the applicant’s knowledge and belief.” Id., emphasis in original. In the final report this knowledge was limited to the time of registration. There were no warranties given, and no representations and warranties as to future use of the domain name. Id. However, even given the limited nature of the representations in the WIPO Final Report, WIPO felt that knowledge by the registrant that its representations were inaccurate “provided a basis for liability or breach of contract on the part of the domain name holder.” Id., at 106. Clearly, this was not intended to be a toothless provision, even in the very modest wording of the WIPO Final Report.
The Second Staff Report also vests the panels with discretion to determine what should constitute evidence of bad faith registration and use:
Staff notes that the delineation of bad-faith is not intended to be exhaustive, and other types of evidence may be presented to the panel in the administrative dispute resolution procedure. The factors listed in paragraph 4(b) are, in staff’s view, fully consistent with (and for the most part mandated by) the policy adopted by the Board.
Second Staff Report, at 4.5, b.
The same discretion was to apply to evidence supporting the establishment of legitimate rights and interests in respect of the domain name:
[I]t should be emphasized that the three circumstances described in paragraph 4(c) are not intended to constitute an exhaustive list of legitimate registration and usage of domain names. Even if none of the three listed circumstances is present, the administrative procedure would still not apply to a dispute where the domain name holder can show that its activities are otherwise legitimate.
Second Staff Report, at 4.6.
4. The Policy and the Uniform Rules
In this panelist’s reading, further indications that it was intended that the panels be vested with discretion in the interpretation and application of the Policy include the following provisions from the Policy and from the Uniform Rules:
a. Policy – “[T]he 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”. 4(b);
“Any of the following circumstances, in particular but without limitation, if found by the Panel to be proved based on all evidence presented, shall demonstrate your rights or legitimate interests to the domain name . . . .” ¶ 4(c);
“[The] Administrative Panel may consolidate before it any or all such disputes in its sole discretion . . . .” 4(f).
b. Uniform Rules – “The Panel shall conduct the administrative proceeding in such manner as it considers appropriate in accordance with the Policy and these Rules”. Rule 10(a);
“[T]he Panel] may, at the request of a Party or on its own motion, extend in exceptional cases, a period of time fixed by these Rules or by the Panel.” Rule 10(c); “[T]he language of the proceeding shall be the language of the Registration Agreement, subject to the authority of the Panel to determine otherwise . . . .” Rule 11(a);
“The Panel may order that any documents submitted in languages other that the language of the administrative proceeding be accompanied by a translation in whole or in part into the language of the administrative proceeding.” Rule 11(b);
“[T]he Panel may request, in its sole discretion, further statements or documents from either of the Parties.” Rule 12;
“There shall be no in-person hearings . . ., unless the Panel determines, in its sole discretion and as an exceptional matter, that such a hearing is necessary.” Rule 13;
“If a Party, in the absence of exceptional circumstances, does not comply with any provision of, or requirement under, these Rules or any request from the Panel, the Panel shall draw such inferences therefrom as it considers appropriate.” Rule 14(b);
“A Panel shall decide a complaint on the basis of statements and documents submitted and in accordance with the Policy, these Rules and any rules and principles of law that it deems applicable.” Rule 15(a);
“In the event of any legal proceedings initiated prior to or during an administrative proceeding in respect of a domain-name dispute that is the subject of the complaint, the Panel shall have the discretion to decide whether to suspend or terminate the administrative proceeding, or to proceed to a decision.” Rule 18(a).
5. Accounts from Member of the “Small Drafting Committee”
The minutes of the initial ICANN Board meeting includes a reference to the establishment of a “small drafting committee’ to assist in formulating the dispute resolution policy:
The President or his delegate should convene a small drafting committee including persons selected by him to express views and consider the interests of the registrar, non-commercial, individual, intellectual property, and business interests.
Internet Corporation for Assigned Names and Numbers, Minutes of Meeting of August 26, 1999, formally approved October 24, 1999, Resolution 99-83, at #2. The five members of the “small drafting committee” selected were (1) Kathryn A. Kleiman, of the Association for Computing Machinery’s Internet Governance Committee; Member DNSO Non-Commercial Domain Name Holders’ Constituency; Co-founder, Domain Name Rights Coalition; (2) Steven J. Metalitz, General Counsel, the International I.P. Alliance; Member, DNSO Trademark, Intellectual Property, and Anti-Counterfeiting Interests Constituency; (3) Rita A. Rodin, Skadden Arps, Slate Meagher & Flom, retained by AOL, a member of the DNSO Registrars Constituency; (4) A. Michael Froomkin, University of Miami School of Law; Former member, WIPO Panel of Experts; (5) J. Scott Evans, Adams Law Firm, P.A.; Member, International Trademark Association’s (INTA) Internet Committee; Chair, INTA DNS subcommittee. Staff Report on Implementation Documents for the Uniform Dispute Resolution Policy, posted September 29, 1999, corrected October 1, 1999.
The only record that this panelist was able to locate which references the work of this committee were two law review articles by Professor A. Michael Froomkin: Wrong Turn in Cyberspace, Using ICANN to Route Around the APA and the Constitution, 50 Duke L.J. 17 (2000) (“Duke Article”) and ICANN’s Uniform Dispute Resolution Policy – Causes and Partial Cures, 67 Brooklyn L. Rev. No. 3, 655 (2002) (the “Brooklyn Article”).5
Professor Froomkin states that the “small drafting committee was established in response to criticism arising from the DNSO Names Council forwarding the Working Group report to the ICANN Board for Approval”. Brooklyn Article, at 652, n. 139. The person who represented the President was then ICANN Counsel Louis Touton. When the “small drafting committee” was unable to reach a consensus, Mr. Touton decided the matters independently, and his recommendations became those of the staff. Id.
In a number of important respects Professor Froomkin’s descriptions of the “small drafting committee’s activities coincides with that of the Second Staff Report. Professor Froomkin reported that the trademark interests pushed for bad faith registration or use. Brooklyn Article, at 655. The registrant interests responded that registration without use should not be actionable and insisted on the language bad faith registration and use. Id. However, unlike the Second Staff Report, Froomkin reports the reasoning behind the registrant interests’ advocacy of bad faith registration and use:
Registrant partisans countered that current trademark registration of a domain, without some kind of commercial use, did not constitute trademark infringement. Although courts had held that offering a domain for sale was commercial use, it could not follow that a plaintiff’s psychic conclusion that warehousing was in bad faith could substitute for actual conduct. They also argued that, large-scale cybersquatters excepted, the only way to tell that a registration was in bad faith was to look at subsequent conduct, i.e., use, and that the two therefore should not be separated.
Id., (emphasis added). This statement expressly sets forth the unitary nature of bad faith registration and use.
C. Interpretation of the Policy under the Octogen Trio of Cases and the Ville de Paris Case
The Octogen trio of cases and the case of Ville de Paris treat bad faith registration and use as a unitary concept, just as did the landmark Telstra decision.6 As the distinguished panelist in Telstra said, “The relevant issue is . . . whether in all the circumstances of the case, it can be said that respondent is acting in bad faith.” Under the unitary view, one cannot separate bad faith registration from bad faith use. As the registrant interests argued, whose position was ultimately adopted by the ICANN staff and Board, “[t]he only way to tell that a registration was in bad faith was to look at subsequent conduct, i.e., use, and . . . the two should not be separated.” Id.
Unfortunately, this panelist carelessly used the term “deem” in reference to the concept of “retroactive bad faith registration.” As correctly pointed out, “deeming” is a legal term of art for the creation of a legal fiction. But a careful reading of the Octogen trio of cases clearly demonstrates that the analysis performed therein leads to an examination of all of the facts and circumstances to determine whether, “in all of the circumstances of the case, it can be said that the respondent is acting in bad faith. Telstra. The decision in City Views Limited v. Moniker Privacy Services, Xander Jeduyu, ALGEBRALIVE, WIPO Case No. D2009-0643 (the ‘Mummy Gold’ case), one of the Octogen trio, demonstrates that there is no creation of a legal fiction in the analysis performed. After analyzing whether the possibility exists that there may have been “retroactive bad faith registration,”7 one must evaluate all the facts and circumstances of the case to determine whether it can be said that the respondent is acting in bad faith. Following this examination of the facts and circumstances, the panel in Mummy Gold determined that the complainant had failed to establish that respondent was acting in bad faith.
D. Application of the Rules of Statutory Construction
The UDRP should be interpreted to give effect to the true purpose of the legislation. One must also seek to give effect to every clause and word of the UDRP and seek to harmonize all parts, “for it is not to be presumed that the legislature intended any part of the statute to be without a meaning.” General Motors Acceptance Corp., supra. In performing this statutory construction, reference should be made to the legislative history to assist the interpreter.
The primary purpose for which the UDRP was intended was to insure that consumers are not misled as to the source of a product or service offered on the Internet. Green Paper and White Paper, supra. Where someone on the Internet is using a domain name that is identical or confusingly similar to a trademark in such a way that it is designed to mislead a consumer as the source of the products or services offered on the Internet, it is the type of conduct that the UDRP was intended to prevent. This panelist believes that the approach of the Octogen trio of cases is entirely consistent with this purpose, and that any decision that fails to find bad faith registration and use when it finds that the respondent, in all the circumstance of the case, is acting in bad faith fails to fulfill the purpose for which the UDRP was intended.
The Octogen trio of cases analyzed both paragraph 2 and paragraph 4(b) (including paragraph 4(b)(iv)) and attempted to give effect to these terms and to harmonize them with the expressed intent of the UDRP. WIPO’s recommended language for paragraph 2 covered only knowingly inaccurate representations made at the time of registration. But paragraph 2 as ultimately adopted in the UDRP went far beyond the modest WIPO recommendations. It required the registrant not only to represent, but also to warrant that to the registrant’s knowledge the registration would not infringe or otherwise violate the rights of any third party. Moreover, it went significantly further than that. Paragraph 2 as adopted required the registrant to represent and to warrant that the registrant “will not knowingly use the domain in violation of any applicable laws or regulations.” This is an affirmative representation and warranty as to future conduct that goes far beyond the WIPO recommendations. Are we as panelists free to ignore this language? But paragraph 2 as adopted goes even further. It states unequivocally that it is the registrant’s “responsibility to determine whether your domain name registration infringes or violates someone else’s rights.” Is this provision of the Policy to be disregarded? If not, then it is clear that the UDRP is not limited to the registrant’s state of mind (intent) at the time of registration. Regardless of what was in the mind of the registrant at the time of registration, the registrant made express representations and warranties as to future use. These representations and warranties are entirely consistent with the views of the registrant interests when they stated that “[t]he only way to tell that a registration was in bad faith was to look at subsequent conduct, i.e., use, and . . . the two should not be separated.”
Section 4(a)(iii) states “Your domain name has been registered and is being used in bad faith.” It is not possible to interpret this provision literally, because it contains inherent ambiguity. Does “is being used in bad faith” refer to the time at which the respondent receives notice of the dispute, to the time at which the complaint is filed, to the time at which the decision is rendered, or to some other time? Panels wrestled with this temporal problem soon after the UDRP was adopted. Very soon it was established that “is being used in bad faith” effectively means “was used in bad faith at any time following registration.” See, e.g., Ingersoll-Rand Co. v. Frank Gully d/b/a ADVCOMREN, WIPO Case No. D2000-0021. This disregard of the literal temporal element caused no great consternation among panelists. Rather it quickly gained general acceptance.
Section 4(b) of the policy deals with “evidence of registration and use in bad faith.” This is also ambiguous. It could mean, as is contended in Telstra and the Octogen trio of cases that “registration and use” is a unitary concept and that one must determine whether under all of the circumstances it can be said that respondent is acting in bad faith. Conversely, it could mean that “registration and use in bad faith” is a binary concept, i.e., there must be proof of registration in bad faith and there must also be proof of use in bad faith.8 At the outset, this panelist concedes that the examples of bad faith registration and use are stated to be evidence of bad faith registration and use, and, if found, are not necessarily determinative of bad faith registration and use (although it must also be admitted that panelists most often treat such evidence as determinative). That being said, subparagraphs 4(b)(i), 4(b)(ii), and 4(b)(iii) speak only of the state of mind of the registrant at the time of registration or acquisition of the domain name, and 4(b)(iv) speaks only of use and does not consider the state of mind of the registrant. If one assumes that bad faith registration and use is a binary concept and that a complainant must prove both bad faith registration and bad faith use, then one would expect the Policy to say that 4(b)(i) through (iii) are evidence of bad faith registration and that 4(b)(iv) is evidence of bad faith use. In the panelist’s assessment, it is illogical to provide that proof of only one of two required elements should be considered evidence of the other required element as well. The import that evidence of one of the elements may be considered proof of both of the elements is consistent with the unitary concept and that the ultimate question for the panel is whether under all the circumstances respondent is acting in bad faith.
The approach of the Octogen trio of cases attempts to interpret the UDRP in light of the intent and purpose for which it was developed, to give effect to all provisions of the Policy,9 to harmonize the provisions such that they are consistent with one another, and to be consistent with the legislative history, to the extent that it is available. This panelist believes that it is incumbent upon anyone interpreting the UDRP to engage in a similar analysis.
M. Scott Donahey
Dated: August 31, 2010
1 See Clarke v. Dunraven (The Satanita)  AC 59 for another example of a contract formed by the separate acceptance by the parties of terms of participation in an activity
2 ICANN’S ‘Uniform Dispute Resolution Policy’—Causes and (Partial) Cures, Brooklyn L.Rev. No. 3, 655 (2002) pp655-656
4 “[Complainant] hereby grants to [Respondent] during the term of this Agreement and subject to the terms and conditions hereof, the exclusive right to use the Trademark in [Respondent’s] territory, all in connection with the use and sale of the Product (Ferrlecit).” Complaint, Annex 10, Art. 1.
5 In an email dated July 26, 2010, Professor Froomkin informed this panelist that no minutes of any of the meetings of the “small drafting committee” were ever taken.
6 In Camon, S.p.A., supra, it is stated that “in Telstra the Respondent’s motives at time of registration of the domain name in issue were clearly abusive.” This statement is both unsupported and unsupportable. There is no way any one could know the respondent’s motives at the time of registration. Since the UDRP had only very recently been adopted and since Telstra was the fourth case decided under the UDRP, the respondent may have been operating under the impression that what it was doing was entirely permissible. It was not infringing anyone’s trademark, since it had made no use of the domain name, and users of the Internet were not likely to be confused as to the source of products or services offered under that domain name, since it was never used on the Internet. It is also possible that the registrant, Nuclear Marshmallows, thought that it was a great cosmic joke that it could register the trademark of the largest telecommunications company in Australia as a domain name, and the registrant could share the laughs with his mates. The motive is sheer speculation. Nowhere in the Telstra analysis is the registrant’s motive ever discussed. Rather the analysis focuses on the conduct of the registrant in supplying false contact information and on the fact that the panelist was unable to conceive of a use of the domain name that would not have been in good faith.
7 In an attempt to create a corollary to the “passive use” concept in Telstra, this panelist coined what has turned out to be an unfortunate choice of words that shifted focus away from the unitary concept expressed in the landmark decision.
8 This panelist is not aware of any decision that disputes the fact that the phrase “registration and use in bad faith” is a conjunctive phrase. “And” is a conjunction. The issue is whether one must show bad faith registration separately and bad faith use separately, or whether “bad faith registration and use” is a unitary concept, so that one must look at the facts and circumstances of the case to determine whether the respondent is acting in bad faith.
9 In contrast, Camon, S.p.A. the panel seems to dismiss the application of Section 2 of the Policy and expressly disregards 4(b)(iv) in its entirety. This panelist believes that such an approach is not in keeping with the rules of statutory construction.