UDRP Complaint: Actually, a Motion for Summary Judgment

This essay expands a talk presented at the 27th Fordham International IP Conference on April 26, 2019.

Trademark owners (and here I'm talking about those with U.S. registrations even if they are foreign entities) have a choice of forum for challenging alleged cybersquatting domain names. They can either sue in district court under the Anti-cybersquatting Consumer Protection (ACPA), or get a quicker and less expensive result by filing a complaint and asserting a claim under the Uniform Domain Name Dispute Resolution Policy (UDRP). But to get to a quicker and less expensive result everything about the process is accelerated, and this begins with drafting the complaint.

Those who litigate for a living know that complaints filed in courts of competent jurisdiction essentially put adversaries on notice of an alleged claim. It does not have to include evidence for the claim, although allegation must be drafted carefully to avoid dismissal for an insufficient factual foundation for the relief. To take one recent example under the ACPA, Emerson Elec. Co. v. Emerson Quiet Kool Co., C.A. No. 17-1846-LPS (D. Del., 2019) (<emersonquietkool.com>) the court dismissed the complaint but granted permission to amend it. Absent factual allegations that support a "reasonable inference" of bad faith intent the claim is vulnerable to dismissal. In the Court's words

[Plaintiff claims that] Defendants registered the Infringing Domain Name with the bad faith intent to profit from the goodwill Emerson Electric has developed in the EMERSON Marks ... However, Plaintiff's allegation is merely a conclusory, speculative, bald assertion, lacking any "factual content" to support a "reasonable inference" of bad faith intent.

Emerson's experience could very well have been replicated under the UDRP, except that under the UDRP the mark owner would not have been invited to amend the deficient complaint. For trademark owners and their representatives, this point should be burned into their minds.

What is unusual about the UDRP, and this is what I want to bring to your attention is that there is imposed at the pleading stage of this administrative process a demand that the parties include proof (not simply allege the right factual predicates for the requested relief). It is critical to the point that if a proof is omitted, the complaint is incurable since there is no second chance under the UDRP as there is in court. This is aptly illustrated in Wix.com v. Domain Admin, Privacy Protect, LLC (PrivacyProtect.org) / Luciana Gomes, D2019-0264 (WIPO March 20, 2019). The complainant failed because it "has alleged no facts (and provided no evidentiary basis) on which the Panel could conclude that Respondent targeted Complainant's WIX mark [with <wixlinks.com>] and used it in bad faith within the meaning of the Policy."

Unless complainant can marshal sufficient evidence of cybersquatting to support its contentions its claim will be denied, and its complaint dismissed. No legal theory awards relief to the trademark owner for having a registered or unregistered mark without proof that the domain name was acquired in bad faith and is being used in bad faith. The point is made in Dr. Muscle v. Michael Krell, FA1903001833036 (Forum April 19, 2019) (<drmuscle.com>). Even if Respondent lacked rights or legitimate interests, there is no proof of bad faith use.

Instead of labeling the initiating pleading in a UDRP proceeding as a complaint, it would be more correct to call it a motion for summary judgment. If we think about the pleading in this way, we will immediately apprehend that a bare complaint will never do.

Yet, surprisingly, there is a small but steady number of cases in which parties or their representatives lose their claims for want of understanding the requirements of the UDRP. Generally, proof is easier with the well-known and famous, but as marks decline in composition to dictionary words and descriptive phrases, the burden grows heavier. The reason for this is that dictionary words used as trademarks do not lose their common function as dictionary words, and as such are capable of multiple associations unconnected with any particular mark. Whatever reputation a mark may have in the present is not probative of its reputation at the time of the registration of the domain name. In Brooksburnett Investments Ltd. v. Domain Admin / Schmitt Sebastien, D2019-0455 (WIPO April 16, 2019) (<incanto.com>) the Panel noted

The fact that the complainant now holds numerous trademarks in many countries does not mean that the Complainant's INCANTO mark is necessarily "world-famous," much less that it was "recognized throughout the world" at the relevant time, 16 years ago, when the Respondent registered the Domain Name.

Although trademark owners have a quicker and less expensive route to having domain names canceled or transferred under the UDRP, their claims must be properly presented. Quicker translates to the difference between forty days for a UDRP decision and one or more years for a Court decision. In several recent ACPA actions, just as an alert to owners thinking of going that route, owners have endured at least a year for a decision, In Advance Magazine Publishers, Inc. v. Tinsley (E.D. Mich., March 2019) (involving legacy TLDs, cybersquatting and trademark infringement) Plaintiff got its injunctive relief for the domain names, however, the cost for getting that result would likely have been significantly greater than the benefits. The domain names could have been silenced more quickly with less cost under the UDRP or (for new gTLDs) the Uniform Rapid Suspension System (URS) (a rights protection mechanism that delivers an even more rapid injunctive takedown for domain names in the new gTLD spaces). If trademark infringement is really an issue, it can be prosecuted separately after suspending, canceling, or transferring the domain nameS.

However, moving for summary judgment calls for a more deliberative approach to pleadings. There must be allegations supported by sufficient concrete evidence, and it must be argued and presented properly.

What I mean by "presented properly" is that trademark owners must include as part of their pleadings persuasive evidence of cybersquatting. The question, then, is what must trademark owners do? The UDRP has a simple three-part structure. There is a choice of two remedies, either cancellation of registration or transfer of the domain name to complainant. The UDRP does not authorize awards of attorney's fees or damages. For that, mark owners have to go to district court.

Complainants must prove its contentions by a preponderance of the evidence, that:

1. It has standing to maintain the proceeding;
2. Respondent lacks any right or legitimate interest in the domain names; and
3. Respondent registered and is using the domain name in bad faith.

The third requirement is called a conjunctive model of liability. Unless both elements are alleged and proved, the complaint must be dismissed. The ACPA, in contrast, is a disjunctive model. If there is proof that Respondent is using the domain name in bad faith (after having registered it in good faith) the domain name will be forfeited to trademark owner or its registration canceled).

The elements and factors in each of the three limbs are:

For the first limb there are two elements:

1. that the domain name is identical or confusingly similar to Complainant's mark. If the domain name is similar but not confusing the complainant has no standing to maintain the proceeding; and
2. that the complainant has rights. The rights can be either registered or unregistered, but if the rights are unregistered or there is an application pending complainant must prove the mark had acquired secondary meaning before the domain name was registered. Otherwise, it does not have standing. An example is Air Serv International, Inc. v. Stu Willcuts, FA1902001831670 (Forum March 31, 2019) Complainant argued that <alserve.org> was confusingly similar to Complainant's <airserv.org> domain name, but failed to offer any evidence that it had a mark. Respondent did not appear.
   1. The point of standing is underscored in Caleb Marshall v. c/o Weebly Domains, FA1901001826454 (Forum March 4 2019) (<thefitnessmarchall.com>. "Mere registration of a domain name without more does not establish common law rights.")
   2. If the complainant has registered rights that accrued subsequent to the registration of the domain name, there is the anomaly of complainant having standing to maintain the proceedings but no actionable claim or remedy. The point is underscored in Mobisy Technologies Private Limited v. Ibrahim Kazanci, D2019-0273 (WIPO March 6, 2019) (. "At the time the Domain Name was registered, there simply was no BIZOM mark out there to target or infringe.")

For the second limb

Complainant succeeds by making an unrebutted prima facie case that Respondent lacks rights or legitimate interests in the domain name. It does this by alleging the following presumptive facts that are open to rebuttal:

1. Respondent is not using the domain name to make any bona fide offering of goods or services. Rebuttals include OVERSEAS CORP. v. NameTrust, LLC. CAC 102207 (ADReu February 22, 2019) (<options.events>. '[T]he evidence on record indicates that it is more likely than not that the domain name was registered in light of its dictionary meaning, for use in connection with the Respondent's link-shortening services forming part of the Respondent's domain name portfolio.");
2. Respondent is not commonly known by the domain name; and
3. Respondent is not making a legitimate noncommercial or fair use of the domain name. If the domain name resolves to an active website, complainant must submit screenshots of the website. In Bialetti Industrie S.p.A. v. Gary Valenti Inc., D2019-0190 (WIPO March 25, 2019) (. "The Complainant had to go back 18 years to find a single example of alleged appearance of a non-Bialetti product on the Respondent's website.")

If Complainant succeeds on its prima facie showing, the burden shifts to Respondent to rebut the presumptive evidence. There are three nonexclusive affirmative defenses (mirror images of the prima facie case, the positive rather than the negative):

1. respondent is using the domain name to offer bona fide goods or services; or
2. it has been commonly known by the domain name since prior to its acquisition; or
3. it is making a legitimate noncommercial or fair use of the domain name.

If Respondent successfully rebuts the prima facie case, the complaint must be dismissed. If Respondent fails to rebut or defaults, complainant succeeds and moves on to the third limb.

For the third limb there are four nonexclusive circumstances of bad faith.

They are:

1. Respondent is offering the domain name for sale to complainant or its competitors; or
2. Respondent acquired the domain name in order to prevent complainant from reflecting the mark in a corresponding domain name; or
3. Respondent is a competitor who has registered the domain to disrupt Complainant's business; or
4. Respondent is using the domain name intentionally for the purposes of commercial gain to attract Internet users to its website.

Proof of conjunctive bad faith is generally supported by the strength of the mark, the hyperlinks on the website, the plausibility of any claim of good faith, and the conceivability that the domain name can be used without infringing Complainant's rights.

The first factor is easily met. It is bad faith 1) if the Respondent solicits complainant to purchase the domain name (but not the other way around!); or 2) the website is populated with links to Complainant's businesses competitors. It is not bad faith 1) to respond to a Complainant's inquiry about the price of the domain name; or 2) populate the website with links consistent with the semantic meaning of the word or words.

The second factor is satisfied if there is evidence that Respondent's primary purpose in acquiring the domain name was related to its value as a mark rather than to its ordinary meaning.

The third element is satisfied if Respondent is a competitor and there is no justification for registering the domain name. An illustration is Toner Connect, L.L.C. v. Privacy Protect, LLC / Realogue Corporation, D2018-2829 (WIPO February 21, 2019) (<tonerconnect.com>).

The fourth factor is satisfied if Respondent's use of the domain name raises a likelihood of confusion with the consuming public. The stronger the mark the greater the likelihood that the registration of the domain name was intended to target it; the weaker the mark and its composition of dictionary words (examples "incanto" and "Dr. Muscle,", the likelier the complaint will be denied.

Even though in Dr. Muscle, supra, Respondent did not actually conduct any trademark or social media search at the time of registration, the fact the domain name is composed of common terms is dispositive:

One fact that does give the Panel some pause is that Respondent, as a domain name speculator, does have some obligation under Paragraph 2 of the Policy to ensure that his domain name does not infringe or violate a third party's rights. Respondent submitted evidence purporting to prove what a Google search in December 2018 might have shown; as discussed above, complainant persuasively refutes the accuracy of those searches. What Respondent does not say is that Respondent actually did such searches, or took any steps to meet his obligations under Paragraph 2.

That's a very brief overview of what I'm calling the evidentiary demands, which I think are significant. These observations are intended as cautionary warnings to complainants that if they fail to recognize the UDRP demands proof on the same scale required for a summary judgment motion, they will lose.

Written by Gerald M. Levine, Intellectual Property, Arbitrator/Mediator at Levine Samuel LLP