UDRP was designed for cybersquatting, not business disputes and trademark infringement challenges.
This post is part of a series on UDRP issues by the Internet Commerce Association.
Misguided trademark owners are wasting their time and money on UDRP complaints which wrongly attempt to resolve business disputes or allegations of trademark infringement. The UDRP’s power to order a domain name to be transferred often attracts companies who wish to seize coveted and commercially valuable domain names even when the circumstances fall well outside the limited scope of the UDRP. Two recent cases make this clear. The first case involves a business dispute that is outside the scope of the Policy. The second case involves a trademark dispute, which is also outside the scope of the Policy. Both cases were properly dismissed by the Panel.
Business Disputes Outside Scope of UDRP
In Patrick Shawn O’Grady v. Sam Mckinley / cti ind,inc, NAF Claim Number: FA1806001790052 (June 22, 2018), NAF Panelist Debrett G. Lyons denied the complaint and correctly determined that there was no evidence of bad faith registration in an apparent business dispute. The Panelist found that the domain name (PKLures.com) was registered almost a decade ago by the Respondent, likely on behalf of a company that was subsequently incorporated by both the Complainant and Respondent. The Complainant in 2017 then registered a matching trademark in his own name, and demanded that the Respondent transfer the domain to him. When that didn’t work, the Complainant brought a UDRP, in order to solve what amounts to a business dispute between related parties, and not a case of cybersquatting that the UDRP was intended to address.
Such business disputes are clearly outside of the limited and narrow scope of the Policy (See Everingham Bros. Bait Co. v. Contigo Visual, FA 440219 (Nat. Arb. Forum Apr. 27, 2005) (“The Panel finds that this matter is outside the scope of the Policy because it involves a business dispute between two parties. The UDRP was implemented to address abusive cybersquatting, not contractual or legitimate business disputes.”); see also Fuze Beverage, LLC v. CGEYE, Inc., FA 844252 (Nat. Arb. Forum Jan. 8, 2007) (“The Complaint before us describes what appears to be a common-form claim of breach of contract or breach of fiduciary duty. It is not the kind of controversy, grounded exclusively in abusive cyber-squatting, that the Policy was designed to address.”); see also Frazier Winery LLC v. Hernandez, FA 841081 (Nat. Arb. Forum Dec. 27, 2006) (holding that disputes arising out of a business relationship between the complainant and respondent regarding control over the domain name registration are outside the scope of the UDRP Policy). As in Thread.com, LLC v. Poploff, D2000-1470 (WIPO Jan. 5, 2001), complainants must not attempt to shoehorn what is essentially a business dispute involving contractual relations into a proceeding to adjudicate cybersquatting. This is misguided, if not a misuse of the Policy.
Trademark Dispute Outside Scope of UDRP
In MOD Super Fast Pizza, LLC v. MOD Restaurant, MOD Restaurant & Social, WIPO Case No. D2018-0903 (June 22, 2018), WIPO Panelist Georges Nahitchevansky denied the Complaint, and correctly determined that a trademark dispute belongs in court and is beyond the scope of a UDRP proceeding. The Panelist found that the registrant registered mod.restaurant because it had since 2015 operated a restaurant in Arkansas called MOD. The Panelist noted that although the Complainant may have trademark registrations which include the word MOD for its chain of pizza restaurants, there was no evidence of bad faith registration and use. The Panel noted that although it may have been improvident to have adopted the MOD domain name given the Complainant’s alleged trademark rights, the evidence did not support a claim of bad faith registration by the Respondent. Rather, the evidence was that the Respondent had used MOD for its own restaurant which was in a geographic area where the Complainant did not operate, and did not serve pizza. This therefore did not appear to be a situation of opportunistic exploitation of the Complainant’s mark, but rather, at most, a trademark dispute.
Such cases where the complainant relies on allegations of trademark infringement or unfair competition do not belong in the UDRP in the absence of evidence of cybersquatting. As held in Edelgard & Horst Liebl v. Drug-Aware Ltd., NAF Claim Number: FA1106001395617 (August 8, 2011), “the present proceedings must be considered summary proceedings that were never intended to serve as a vehicle for adjudication of traditional trademark disputes.” A similar conclusion was reached in Intel Corporation v. Intelsitio Mexico, WIPO Case No. D2012-0718 (June 21, 2012):
“It should be remembered that the Policy is of narrow compass and is intended to deal with cases of abusive cybersquatting. The present case strikes the Panel as a trademark infringement or unfair competition dispute rather than a complaint of abusive cybersquatting. As such, the proper forum is a court of competent jurisdiction.”
The Limited Scope of the UDRP
The limited scope of the UDRP was discussed by ICANN staff in its Second Staff Report on Implementation Documents for the Uniform Dispute Resolution Policy, October 24, 1999, at paragraph 4.1(c) as follows:
“The Recommended Policy Is Minimalist in its Resort to Mandatory Resolution….The adopted policy establishes a streamlined, inexpensive administrative dispute-resolution procedure intended only for the relatively narrow class of cases of “abusive registrations”. Thus, the fact that the policy’s administrative dispute-resolution procedure does not extend to cases where a registered domain name is subject to a legitimate dispute (and may ultimately be found to violate the challenger’s trademark) is a feature of the policy, not a flaw. The policy relegates all “legitimate” disputes–such as those where both disputants had longstanding trademark rights in the name when it was registered as a domain name to the courts; only cases of abusive registrations are intended to be subject to the streamlined administrative dispute-resolution procedure.”
Consistent with the Second Staff Report, in Love v. Barnett, FA 944826 (Nat. Arb. Forum May 14, 2007), the Panel denied the complaint while citing the Final Report of the WIPO Internet Domain Name Process (April 30, 1999), stating that the scope of the UDRP procedure “is limited so that it is available only in respect of deliberate, bad faith, abusive, domain name registrations or “cybersquatting” and is not applicable to disputes between parties with competing rights acting in good faith”. The “narrow focus” of the UDRP has been confirmed many times by numerous UDRP Panels. The panels in the following cases denied the complaints because they were inappropriate attempts to use the UDRP to resolve business disputes: Quarterview v. Quarterview Co. Ltd., eResolution Case Numbers AF-0209a and AF-0209b, Thump Records, Inc. v. WebPros, NAF Claim No. FA0503000446911, Carol Shedrick d/b/a Stanford Limousine LLC v. Charles Princeton d/b/a Net Solutions, NAF Claim Number: FA0402000236575, and LIBRO AG v. NA Global Link Limited, WIPO Case No. D2000-0186).
Greater awareness on the part of complainants’ counsel as to the role and scope of the UDRP may reduce efforts to misuse the UDRP for purposes for which the Policy was not intended. The UDRP can be an effective tool for dealing with cybersquatting, but it is an ineffective and inappropriate tool for dealing with any dispute involving matters outside of its limited scope. Those disputes are best dealt with in courts which are properly equipped to address them. The Internet Commerce Association takes this opportunity to commend Panelists Lyons and Nahitchevansky for following the Policy and adhering to its spirit and intent in the above-mentioned cases.
Zak Muscovitch is General Counsel to the Internet Commerce Association, a group that advocates on behalf of domain name investors.