This is the type of decision that gives UDRP a bad name.
UDRP works most of the time. A company files a clearcut cybersquatting case and wins the domain, or a company files a bad or marginal case and loses. It’s the handful of bad decisions that cause problems, and that’s something people need to keep in mind as they review UDRP.
This morning I read Internet Commerce Association’s (ICA) weekly UDRP Case Summary Digest, and it flags a very troubling case for mohu.com. Both DomainInvesting and DomainGang have previously written about this case.
The question is: how do we keep UDRP working as it should, but avoid bad decisions such as this one?
ICA gave me permission to republish its case summary and analysis, which you’ll see below. The organization’s digest, which is edited by attorney Ankur Raheja and often includes analysis from ICA general counsel Zak Moscovitch, is free to subscribe.
Innocent Registrant Found to be a Cybersquatter? A Very Troubling Decision.
Panelist: Mr. David P. Miranda, Esq.
Brief Facts: The Complainant operates a TV antenna business and owns rights in the MOHU trademark based on registration with the USPTO dated January 22, 2013. The disputed Domain Name was acquired by the Respondent on June 14, 2021 in an auction and is currently inactive. The Respondent operates Henan Xinyifu Technology Co., Ltd. and Henan Mohuili Information Technology Co., Ltd., providing website development and promotion services. The Respondent owns rights in the registered mark 魔狐 (Pinyin is MOHU) filed on June 29, 2021 with the CNIPA.
The Complainant asserts the Respondent had actual knowledge of the Complainant’s rights in the MOHU mark based on the fame of the mark. The Complainant alleges that the Respondent previously offered the disputed Domain Name for US $25,000 and currently holds it inactively and may use it to distribute malware. The Respondent contends that the disputed Domain Name comprises a common and generic term and that the offer to sell the disputed Domain Name was made by another registrant, prior to Respondent’s acquisition of the disputed Domain Name.
Held: The WHOIS information can be used to show that a Respondent is not commonly known by the disputed Domain Name under Policy. Herein, the WHOIS information lists “FengWenJia” as the registrant and the lack of permission or authorization to use a mark constitutes a further showing that a Respondent is not commonly known by the disputed Domain Name. The inactive holding of a disputed domain name is not considered a bona-fide offering of goods or services or legitimate non-commercial or fair use under Policy. The Respondent did not apply for a trademark containing the MOHO mark until June 29, 2021, which has a different spelling than the Domain Name at issue. The Respondent lacks rights and legitimate interests in the disputed domain name.
The Complainant provides a screenshot showing the disputed Domain Name was previously offered for sale and copies of emails indicating a prior owner of the domain offered to sell the Domain Name to the Complainant for $25,000. An offer to sell a disputed Domain Name in excess of registration costs indicates bad faith under Policy, if the Respondent intended to make such an offer when registering the disputed Domain Name. The failure to make active use of a disputed Domain Name is evidence of bad faith under the Policy.
Complainants’ Counsel: Joel R. Samuels of Harness, Dickey & Pierce, PLC, Missouri, USA
Respondents’ Counsel: Self-represented
Case Comment by ICA General Counsel, Zak Muscovitch:
As previously stated in my comments in this space, we must always be cognizant when evaluating a UDRP decision that the Panel may have had facts before it which we as observers are not aware of. Nevertheless, as also previously stated, UDRP decisions must stand on their own and this decision is very troubling on its face.
The Panelist apparently found bad faith based upon the fact that a previous registrant, i.e. not the Respondent, had offered to sell the Domain Name to the Complainant. This rationale is very difficult to comprehend. The Respondent had apparently acquired the Domain Name at an auction and there was no evidence of any relationship between the Respondent and the prior registrant. Accordingly, there was no evidentiary or legal basis for imputing bad faith to the Respondent as a result of the actions of an unrelated registrant. It is very concerning that such an overt misapprehension would appear in a decision and bring disrepute to the UDRP.
The Panelist also appears to have disregarded the Respondent’s registered trademark for 魔狐 which is apparently “MOHU” in Pinyin. Absent exceptional circumstances (such as arguably the case of RED MITO, which is summarized and commented on below in this Digest), having a trademark registration corresponding to the foreign language equivalent of the Disputed Domain Name would seem to confer rights on a Respondent. Indeed, such a trademark registration would confer just as much right on the Respondent as the Complainant’s registration does on the Complainant. As a general rule, UDRP panels do not look behind a Complainant’s trademark registration and nearly invariably treat it as valid if it is valid on its face. Likewise, panels ought to not disregard a ‘valid on its face’ trademark registration belonging to a Respondent except in exceptional circumstances – and even then it may be more prudent in the circumstances to defer to the courts for adjudication of cases concerning competing trademarks and allegations of infringement.
The Panelist notes without explanation, that the Respondent’s trademark registration “is for a different spelling” and also makes a reference to a “MOHO” (i.e. not MOHU). It is unclear from the decision why the Panelist concluded that the Respondent’s registration is for a different spelling. A simple Google translate search would have shown that 魔狐 is transliterated as MOHU as claimed by the Respondent, and means “magic fox”. If there was a language issue here, perhaps it would have been prudent for the Panelist to not accept the Complainant’s request to have the matter conducted in English despite the registrar apparently being in China with Chinese as the language of the Registration Agreement. Paragraph 11(a) of the Rules of course requires that the proceeding be in the language of the Registration Agreement subject to the authority of the Panel to determine otherwise.
Moreover, the Panelist appears to have disregarded the fact that the Respondent’s corporate name contains “Mohuili”, thereby suggesting a correspondence between the Domain Name and the corporate name. The Panelist however appears to note that the Respondent is an individual rather than the corporation but apparently does not consider the Respondent’s claim that he established the corporation and therefore has indirect rights.
The Panelist in part based its finding of bad faith on the non-use of the Domain Name. First, it should be noted that the Domain Name was registered on June 14, 2021, and the Complaint was submitted on March 2, 2022 – a period of only about 8 months. It is hardly unreasonable to not have a website erected in less than a year from the registration of the Domain Name.
More importantly, however, and as previously written about in this space, many UDRP cases have held that a respondent is under no obligation to use a domain name for a website or at all (see, for example, Write Brothers, Inc. v. Dennis Pollack, NAF FA0210000127800: “Notwithstanding Complainant’s implications to the contrary, there is no requirement that a domain name registrant use or have any use for the domain name at the time of registration; not even for a domain name that might be similar to an existing trademark. A domain name holder is under no obligation to immediately begin operating a website upon registering the domain name”).
Moreover, the doctrine of “passive holding” invoked by the Panelist, requires a finding of “bad faith registration” as a precursor to making a finding of bad faith based upon non-use (See Telstra Corporation Limited v. Nuclear Marshmallows at Paragraph 7.8 – 7.10). In the Telstra case, the panel first found bad faith registration based upon numerous trademark registrations, widespread reputation, a highly distinctive domain name, and the “inconceivability” of any legitimate use of the domain name other than by the complainant. It was only after making a well-supported finding of “bad faith registration” in the first place, that the panel in Telstra was able to continue on to find “bad faith use” based upon non-use or “passive holding” of the domain name. Such analysis appears to be absent in this decision leaving unsupported and unsubstantiated the Panel’s determination of bad faith based upon an inactive website.
In conclusion, this decision is very concerning. An otherwise distinguished and experienced Panelist with over 100 decisions to his credit appears to have issued a very questionable decision which may very well be appealed to the courts of China which has Mutual Jurisdiction in this case. If overturned, it will not be a surprise and unfortunately may cast the UDRP in an unfavourable light. Anyone who values the UDRP and who cares about its successful reputation should be concerned when an apparently errant and unusual decision like this comes out and should wonder what caused this unfortunate situation to occur.