The Case of the Innocent Domain Squatter
We all have different reasons for getting into the study and practice of law. Regardless of whether you have parents/family members with a thriving practice who need an heir, to not getting into any other course or if you’re like me, and read too many Erle Stanley Gardners at some point in law school and when you step into a Court, the urge to fight for the innocent little guy is extremely strong. Sure, the law teaches you to represent the guilty and innocent alike and that everyone is entitled to a fair chance, but knowing that you are on the right side of a fight can be a satisfying feeling. I have blogged about the five common defenses I’ve heard domain squatters use during negotiation but recently I did handle a case where the domain squatter and his actions were far from illegal.
Company A [my client] was into to a particular line of business and when they planned on splitting their business into two related entities, bought about 5 domains of varying combinations of descriptive words for the two separate lines of work. However due to a business decision the idea along with the 5 domains were shelved and they continued with their existing website.
Two years after one of the five domains the domain were registered, a new company was formed by someone else incorporating the full text of the domain [Company B]. Now Company B uses the trademark which uses the domain as a whole [barring the .com portion naturally] and goes ahead with registering their trademark a good 6 years after the domain incorporating the trademark was registered. Years go by and Company B builds up quite a reputation in the market, and currently has their website only on a country level domain [.in or .ca. or .au etc]
Company B is now well known in the market and now suddenly decides that they need to have the .COM domain which incorporates their name. They send Company A a cease and Desist notice telling them that the registration of the domain in question amounts to infringement and that they ought to transfer the domain.
When they don’t get a response, Company B files a UDRP complaint to retrieve the domain.
I must admit, drafting the response to the complaint on behalf of Company A was great fun. According to the UDRP, the Panel has to look into three criteria, all of which have to be met for a successful complaint. The three grounds are
- The domain name is identical or confusingly similar to a trademark or service mark in which the complainant has rights.
- The registrant has no rights or legitimate interests in respect of the domain name.
- The registrant registered and is using the domain name in bad faith.
The Arbitrator assigned to the matter passed an order in favour of Company A, because though the domain was identical, the fact that Company A had registered the domain in good faith much before Company B was even formed proved that the second two grounds were not in favour of the complainant.
This curious set of facts is not too uncommon though, and WIPO’s consensus view on the third ground mentions – Generally speaking, although a trademark can form a basis for a UDRP action under the first element irrespective of its date [see further paragraph 1.4 above], when a domain name is registered by the respondent before the complainant’s relied-upon trademark right is shown to have been first established (whether on a registered or unregistered basis), the registration of the domain name would not have been in bad faith because the registrant could not have contemplated the complainant’s then non-existent right.
The UDRP goes a step further and Section 15 (e) authorizes the Panel to declare in its decision if it believes that the complaint was brought in bad faith in an attempt to harass the owner that it may have been a case of reverse domain name hijacking [RDNH] which is an abuse of the administrative proceedings.
While in my case the Panel did find in favour of my client, it didn’t go to the extent of declaring it a case of RDNH. I did however come across a very interesting website – http://www.rdnh.com/ which lists out the cases where RDNH has in fact been held.
So, if you’ve registered a domain when a name suddenly popped into your head, and you find years later that someone has built goodwill and more importantly registered a trademark incorporating it, and now sends you a legal notice, all may not be lost. You may just be an innocent domain squatter.