Israel: The Interface Between Trademarks And Domain Names- Part 5: Proving The Third Element In UDRP Proceedings: The Disputed Domain Name Was Registered And Subsequently Used In Bad Faith.

This is my final article in this series in which I analyze the interface between Trademarks and Domain Names. In my previous articles I discussed the first two elements to be established by the complainant in UDRP proceedings, namely "Identical or Confusing Similarity" in the context of establishing the first element in UDRP proceedings, and the legal concepts "No Rights or Legitimate Interest" for proving the second element. The present and final article concludes the series with a review of the third element, namely, the legal construct known as "registered and is being used in bad faith" in which I discuss what can demonstrate and constitute "bad faith" use for proving this element of the Policy.

Four (Non-Exhaustive) Examples of Registration and Use in Bad Faith

The third element to be established by the complainant in UDRP proceedings is that the disputed domain name has been registered and is being used in bad faith. These are conjunctive requirements; both must be satisfied for a successful complaint: see e.g., Burn World-Wide, Ltd. d/b/a BGT Partners v. Banta Global Turnkey Ltd, WIPO Case No. D2010-0470. As such, the failure by complainant to prove any one of them would result in a denial of the complaint. The term "bad faith" is "broadly understood to occur where a respondent takes unfair advantage of, or otherwise abuses, a complainant's mark". (See section 3.1 of the WIPO Overview 3.0.) There are several ways that a complainant can demonstrate that a domain name was registered and used in bad faith. Paragraph 4(b) of the Policy sets out four non-exhaustive examples of circumstances which, if found to be present, are deemed to provide evidence of bad faith in registering and using the disputed domain name to target complainant: (i) circumstances indicating that the respondent has registered or the respondent has acquired the disputed domain name primarily for the purpose of selling, renting, or otherwise transferring the disputed domain name registration to the complainant who is the owner of the trademark or service trademark, or to a competitor of the complainant, for valuable consideration in excess of the respondent`s documented out-of-pocket costs directly related to the disputed domain name; or (ii) the respondent has registered the disputed domain name in order to prevent the owner of the trademark or service trademark from reflecting the trademark in a corresponding domain name, provided that the respondent has engaged in a pattern of such conduct; or (iii) the respondent has registered the disputed domain name primarily for the purpose of disrupting the business of a competitor; or (iv) by using the disputed domain name, the respondent has intentionally attempted to attract, for commercial gain, internet users to its website or other on-line location, by creating a likelihood of confusion with the complainant's trademark as to the source, sponsorship, affiliation, or endorsement of its website or location, or of a product or service on its website or its location.

The concept of bad faith as illustrated in the four scenarios listed above necessarily involves a subjective intent on the part of a respondent to knowingly trade upon the goodwill of the complainant. Such subjective intent in turn requires the panel to be persuaded, on a balance of probability, that respondent actually knew of complainant and its rights in the relevant mark when the domain name was registered, and that the registration of the disputed domain name clearly and purposefully targeted such trademarks. It is also clear that the criteria set out in Paragraph 4(b) for establishing bad faith are not exclusive. In addition to these criteria, other factors alone or in combination can support a finding of bad faith. ( See, Telstra Corporation Limited v. Nuclear Marshmallows WIPO Case No. D2000-0003).

On the basis of these principles, UDRP panels have typically considered, inter alia, the following five factors and considerations in making its bad faith analysis and in determining whether the complainant has properly made its case that the disputed domain name was registered and used in bad faith:

1. Prior Right of Disputed Domain Name Holder

It has long been established by UDRP panels that, absent exceptional circumstances,when a domain name is registered before the complainant's trademark registration, the domain name generally cannot be determined as having been registered in bad faith. (Fresh Clothes, LLC v. Yui Quan Claim Number: FA2307002052912). This is because the domain name holder could not have been aware of the complainant's trademark as at the time the domain name was registered. Therefore, no bad faith registration could be shown to have taken place in such circumstances and there is therefore, generally, no more need to examine any other bad faith circumstances.( See:bpost NV and bpost bank NV v. Dong Jin Kim WIPO Case no. D2020-2195; Property Tax Partners, LP, LLP v. FCSE Claim Number: FA210900196464 finding that respondent could not have entertained bad faith intentions regarding the mark because it could not have contemplated complainant's then non-existent rights in [the mark] at the time the domain name was registered)."Exceptional circumstances" in this context may include instances where it can be proven that the domain name holder's intent in registering the domain name earlier in time to a trade mark right was to unfairly capitalize on the complainant's unregistered mark in anticipation of obtaining trademark rights; for example, (i) shortly before or after the announcement of a corporate merger, (ii) further to the respondent's insider knowledge (e.g., as a former employee), (iii) further to significant media attention (e.g., in connection with a product launch or prominent event), or (iv) following the complainant's filing of a trademark application.

2. Famous or Well-Known Trademarks

UDRP panels have consistently found that the mere registration of a domain name that is identical or confusingly similar (particularly domain names comprising typographical errors or incorporating the mark plus a descriptive term) to a famous or widely-known trademark by an unaffiliated entity can by itself create a presumption of bad faith. (See section 3.1.4 of the WIPO Overview 3.0. page 6). In Genentech, Inc. v. Oak WIPO Case No. D2023-3799 the complainant submitted evidence that the respondent registered the disputed domain names long after the Complainant registered its GENENTECH trademark. Given the accumulation of goodwill and distinctiveness of the Complainant's mark over the course of its almost 40-year history, and the fact that the GENENTECH mark appears to be distinctive, it was highly unlikely that the Respondent did not know of the Complainant and its GENENTECH mark prior to the registration of the disputed domain names. This was also evident from its webpages, which all prominently displayed the complainant's trademark. Therefore, in the Panel's view, the respondent's choice of the disputed domain names cannot have been accidental and must have been influenced by the fame of the Complainant and its earlier trademark. (See Carrefour SA v. Registration Private, Domains By Proxy, LLC / 3232 33232, WIPO Case No. D2022-1952). In addition, the disputed domain name incorporated the entirety of the Complainant's GENENTECH mark along with various additional suffixes which the Panel found was an attempt by the respondent to confuse and/or mislead Internet users seeking or expecting the complainant. Previous UDRP panels have ruled that in such circumstances a likelihood of confusion is presumed, and such confusion will inevitably result in the diversion of Internet traffic from the complainant's site to the respondent's sites (see Genentech, Inc. v. hh hhh, ds df WIPO Case No. D2023-2521). As such, UDRP panels have established that attracting Internet traffic by using a domain name that is identical or confusingly similar to create a likelihood of confusion with a registered trademark may be evidence of bad faith under paragraph 4(b)(iv) of the Policy. Similarly, in Halliburton Energy Services, Inc. v. xuxu, xuxu WIPO Case No. DCC2023-0012 the website to which the disputed domain name resolved had copied content from the complainant's website and mentioned information about the complainant. Based on these facts and the evidence submitted by the Complainant, and in the absence of a response from the respondent, the panel accepted that the trademark HALLIBURTON is prima facie well-known and accordingly held that such per se evidence to be evidence of bad faith registration and use. This was found sufficient to prove that the Respondent was well aware of the complainant and the disputed domain name was transferred to the complainant.

3. Passive Holding

The non-use of a domain name (including a blank or "coming soon" page) would not prevent a finding of bad faith. While panelists will look at the totality of the circumstances in each case, factors that have been considered relevant in applying the "passive holding doctrine" include: (i) the degree of distinctiveness or reputation of the complainant's mark (ii) the failure of the respondent to submit a response or to provide any evidence of actual or contemplated good-faith use (iii) the respondent concealing its identity or use of false contact details (noted to be in breach of its registration agreement) and (iv) the implausibility of any good faith use to which the domain name may be put." ( See section 3.3 of the WIPO Overview 3.0). The seminal case of Telstra Corporation Limited v Nuclear Marshmallows WIPO Case No D2000-003 confirms the proposition that bad faith can be inferred from passive domain name holding, particularly when it is coupled with other factors such as active attempts by the registrant to conceal its identity, or the failure of the registrant to correct false registration data.

4. Attempts to capitalize on, or otherwise take advantage of, the Complainant's trademark by creating a likelihood of confusion with the intent to unlawfully profit therefrom.

It is axiomatic that, under the UDRP, a complainant must show that the respondent more likely than not had the complainant's mark in mind when registering the disputed domain name. In the case of Dentless, LLC v. Dent Guys, Inc., and Bill Swartwout, Beaches and Towns Network, Inc. WIPO Case No. D2023-1547, the WIPO panel concluded that complainant had failed to carry its burden of proving that Respondent registered the domain name (dentless.com) in bad faith under the Policy. Although complainant holds a trademark registration for DENTLESS, given the apparently widespread use of the term "dentless" in the auto repair business, which was found to be a common term used in the name of many auto repair companies in the industry, there was no evidence, on a balance of probabilities, that complainant's registered DENTLESS trademark was so well- known that respondent more likely than not was aware of it and sought to unfairly target Complainant's mark when acquiring the domain name to trade off of it. The panel in this case rejected the proposition that the doctrine of constructive notice was enough to satisfy the "bad faith registration" requirement for a UDRP case. Innumerable UDRP decisions since 2000 have rejected the notion that the doctrine of constructive notice supplants the requirement of actual notice in UDRP cases. Based on the evidence the Panel found in this case that the Respondent did not register the disputed domain name in bad faith. When it comes to the "wilful blindness" standard whereby complainant posits the argument that the respondent should have known, or ought to have known, about the complainant's trademark rights and use of the disputed domain name, "wilful blindness" is generally only found in UDRP cases where marks are so distinctive (both in terms of inherent distinctiveness and acquired distinctiveness) that the use of the mark can only be associated with the complainant and no-one else. Therefore, "willful blindness" has been held only to apply to distinctive marks ( Sleep Number Corporation v. Omri Shalom / Silver Scope Media Claim Number: FA2309002062168 ).

5. Common factual circumstances that evidence bad-faith registration and use

The circumstances in the list below are deemed to be additional indications of the respondent's bad faith. These include, inter alia, the following factors: (i) the long-term passive holding of domain names; (ii) activities such as registering the disputed domain name with the knowledge of complainant's trademark and with the intention of mimicking, impersonating or masquerading as the complainant to attract Internet users to its website under the false impression that they were in fact visiting the website of the complainant;(iii) failure to respond to cease and desist letters, or to file a Response to a UDRP complaint or failure to participate in the proceedings, or to provide any evidence of actual or contemplated good-faith use; (iv) providing false or fictitious domain name registration data;(v) Pay- per – click websites and sale of fraudulent tokens; (vi) attempts to sell or auction domain names to third parties; (vii) engaging in malicious conduct, including typosquatting, malware, botnets, spam or phishing scams;( viii) offers to sell domain names to trademark owners in excess of out-of-pocket expenses;(ix) association with pornography, gambling or illegal conduct that will tarnish the trademark; or(x) an established pattern of bad-faith domain name registrations targeting famous trademarks.

Conclusory Allegations and Mere Assertions of Bad Faith

If complainant makes conclusory allegations of bad faith but does not adduce specific documentary evidence that warrants a holding that respondent proceeded in bad faith at the time it registered the disputed domain name, a panel will find that complainant has failed to meet its burden of proof of bad faith registration and use under paragraph 4(a)(iii) of the Policy and it will fail with its claim under the UDRP. Mere assertions of bad faith, even when made on multiple grounds, do not prove bad faith ( Redfig LLC v. Bill Patterson / Reserved Media LLC Claim Number: FA2310002065116 see also Chris Pearson v. Domain Admin / Automattic, Inc. Claim Number: FA1504001613723 finding that the complainant could not establish the respondent registered and used the disputed domain name in bad faith because it failed to present evidence that would support such a holding).

Key Take-Aways

Trademark infringement under the United States Lanham Act or under that of any other national laws is not coterminous with bad faith registration and use under the UDRP. Bad faith means that there is clearly an intent to deceive. Generally speaking, a finding that a domain name has been registered and is being used in bad faith requires an inference to be drawn that the respondent in question has registered and is using the disputed domain name to take advantage of its significance as a trademark owned by the complainant. The UDRP requires a specific intent to unfairly target and capitalize off the complainant's mark. This infers some sort of improper or dishonest motive on the part of the respondent in the registration and use of the disputed domain name. A close review and analysis by your attorney or legal counsel is called for of the the degree of distinctiveness or reputation of your mark and your use of the trademark at issue, an investigation of how the disputed domain name and relevant website is being used by the disputed domain name holder, and an investigation of any misrepresentations made regarding its registration and use. It is a misconception that you can succeed in a UDRP complaint as a trademark owner against anyone who has a domain name that is identical or confusingly similar to your trademark. The truth is, that subject to some narrow exceptions, a domain name registration is not in bad faith if the trademark owner did not acquire its rights until a later date than the disputed domain name registration. This highlights a major distinction between the "first- to -file" principle under trademark law and the "bad faith" intent requirement under paragraph 4(a)(iii)of the Policy.

To prevail in a UDRP complaint, a complaint must make a full and proper evaluation of the potential domain name abuse. Evidence must be adduced that respondent registered and used the disputed domain name in bad faith in terms of the principles as set out above, or upon such other factors which may be indicative of bad faith use and registration in order to fulfil the third element under paragraph 4(a)(iii) of the Policy.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.