Cybersquatters often take advantage of brand owners by charging a large payment for a domain name similar to the brand owner’s brand. Cybersquatters may also attempt to profit from redirecting Internet traffic destined for the brand owner’s website – to compete with the brand owner, draw attention to other offers, or disrupt their competitor’s business.
Brand owners have several options to deal with cybersquatters. One of the most effective options is to use the Unform Domain Name Resolution Policy (or “UDRP”) included in every domain name registration agreement. The UDRP is an alternative dispute resolution mechanism that allows parties to present arguments and evidence in a very short procedure, keeping costs and time to a fraction of the cost of a typical litigation. However, the UDRP is only effective under certain circumstances. This article covers when a trademark owner might consider using the UDRP and outlines the basics of the UDRP process.
The scope of the UDRP procedure is limited. It is not a forum for resolving typical trademark infringement claims. It’s not even a forum for resolving legitimate domain name disputes. It’s a quick way to combat clear cases of abusive cybersquatting.
To succeed in a UDRP lawsuit, a complainant must demonstrate three elements:
First, the complainant must demonstrate that the domain name is confusingly similar to a trademark or service mark in which the complainant has rights. A federally registered trademark is prima facie evidence of this element, which can be difficult to refute in a UDRP proceeding. A complainant can also invoke common law trademark rights, but it takes a lot of evidence to prove such rights.
Second, the complainant must prove that the domain name registrant has no rights or legitimate interests in the domain name. In other words, there can be no realistic dispute as to whether the registrant has a legal right to use the trademark or domain name. If the domain name appears to have been registered for the purpose of conducting a legitimate business, the registrant is in the clear – at least for the purposes of the UDRP process (in which case a lawsuit would be the appropriate forum to report the infringing use of the domain name).
Third, the complainant must prove that the domain name has been registered and is being used in bad faith. It has to be both. If the registrant receives the domain name in good faith and only later starts using it in bad faith (once they realize the value of using the mark), this does not meet the requirements of the UDRP.
There are several scenarios that demonstrate bad faith under the UDRP. One such scenario is when the registrant registered the domain name primarily for the purpose of selling, renting, or otherwise transferring the domain name to the complaining trademark owner. In particular, this does not include those who are active in the field of buying and selling domain names. Another case is when the registrant registered the domain name to prevent the complaining trademark owner from reflecting the trademark in a corresponding domain name if the registrant engaged in such a pattern of conduct. Another scenario is when the registrant registered the domain name primarily for the purpose of disrupting a competitor’s business. Another case is when the registrant used the domain name to lure Internet users to the registrant’s website for commercial purposes by creating a likelihood of confusion with the complainant’s trademark. This scenario comes closest to trademark infringement, but the evidence must show that the domain name was registered for the purpose of trading in the complaining trademark owner’s goodwill – which can be challenging without detection. An example of this scenario would be where a registrant uses a domain name that clearly mimics a well-known trademark while offering unrelated goods or services (e.g., a misspelling of “Goldman Sachs” leading to an adult website leads).
The most common UDRP providers are The Forum (formerly known as The National Arbitration Forum) and the World Intellectual Property Organization (WIPO). The UDRP process begins with the filing of a complaint detailing the relevant facts and providing supporting evidence. The registrant then submits a response and attaches his supporting evidence. There is no discovery, no hearing and no reasoning. UDRP proceedings are usually decided by a single arbitrator, but either party can request that the case be heard by a three-person panel. In general, the umpire/arbitrators will make a decision within 14 days of their appointment. Barring exceptional circumstances, the entire UDRP process should be completed in less than 60 days.
A successful complainant can choose to keep the domain name in question or have the domain name cancelled. After a decision is made, the domain name registrar will implement the decision ten business days after receiving notification of the decision. The losing party may prevent the transfer and contest the decision by filing a suit in federal district court at either the defendant’s location or the location of the domain name registrar or registry within those ten days. Because it may be unclear where the defendant is located, or because the defendant is located outside the United States, it is common practice to file such lawsuits where the registrar or domain name registry is located. Federal courts in Arizona (home to several popular registrars such as GoDaddy and Namecheap) and Virginia (home to Verisign, the registrar for most .com domain names) are common venues for such lawsuits.
With this shortcut, the UDRP offers brand owners a quick and inexpensive tool to take action against cybersquatters.
