UDRP Proceedings: Solving Domain Name Disputes – JD Supra (press release)

If a dispute arises over use and/or registration of an internet domain name, resolution of the dispute is accomplished through proceedings under the Uniform Domain Name Dispute Resolution Policy, known as UDRP proceedings, administered by the Internet Corporation for Assigned Names and Numbers (“ICANN”). ICANN is a private, non-profit organization formed specifically to control web domain name registration, use, and management. See their webpage here.

What’s Involved in UDRP Proceedings

A UDRP proceeding is an administrative proceeding very much like arbitration. UDRP proceedings are handled through ICAAN accredited providers (“Providers”), like the National Arbitration Forum.

Instead of a judge and jury, the matter is heard by one person or a panel of three decision makers. ICANN calls them “Panelists.”

UDRP proceedings begin with a Complaint being filed with a ICAAN Provider. The person or business starting the process is called the Complainant and the person/entity being charged is the Respondent. At the time of filing the Complaint, the Complainant must also pay the required filing fees, which range from approximately $1,300 – $4,000 in most cases, depending on the number of domain names at issue, the number of Panelists selected, and the Provider’s terms.

After the Complaint has been filed, the respondent must file a written Answer.

The parties may choose a single-person panel or a three-person panel. In a single-person panel, the Provider chooses the Panelist. For a three-person panel, one is chosen by the complainant, one by the respondent and the third Panelist is selected by the Provider. The UDRP procedures and rules are set out here.

In general, in a domain name dispute, the complainant must prove three elements:

  • The complainant has a trademark, personal name or service mark and the challenged domain name is identical or confusingly similar to same
  • The respondent does not have any rights or legitimate interests in the domain name
  • The domain name has been registered and the domain name is being used in “bad faith”

While questions often arise as to whether the complainant has valid trademark rights to enforce, it is more common for legal issues to turn on the second and third factors, being the “legitimate interests” and “bad faith” elements. Among the facts that a Panel will consider on these questions:

  • Does the complainant have a registered trademark?
  • Did the respondent register the domain name primarily for the purpose of selling, renting, or speculating on the domain name?
  • Does the respondent use the domain name and to what extent?
  • When was the domain name registered vis a vis the complainant’s trademark, professional name popularity, business use, etc?  In other words, was the domain registered long ago, long before the complainant became famous?
  • Has the respondent engaged in a pattern of registering domain names for speculation purposes?
  • Is the respondent a business competitor or other who might have reason to disrupt the complainant’s business/profession?
  • Can the respondent be seen as using the complainant’s mark or popularity for commercial gain or for driving internet traffic to the respondent’s website?

UDRP Proceedings: Appealing a Loss

If a respondent loses a UDRP proceeding, the domain name(s) in questions will automatically be transferred to the complainant. However, the respondent can prevent the transfer by filing an action in a court of competent jurisdiction. Importantly, the complainant is required to specifically submit to jurisdiction either where 1) the relevant domain name registrar is located or 2) where the respondent is located. While these are not the only courts of “competent jurisdiction,” it is likely any lawsuit would be brought in those arenas to avoid issues of personal jurisdiction. This lawsuit must be filed within 10 days of the order transferring the domain names, which places a burden on the respondent to act quickly.

Technically, the lawsuit filed to stop the transfer is not an “appeal.” The court handling the lawsuit is not bound by the UDRP decision and does not award it any deference whatsoever. The issues are reviewed de novo, or like for the first time.  

UDRP Proceedings and Domain Name Theft

Domain name theft is when someone hacks into your relevant accounts and unlawfully transfers ownership of your domain name to some new person or entity. Forbes had an article about how ShadesDaddy.com had its domain name stolen.                                                                                                                    ShadesDaddy sold, and still sells, sunglasses. They were able to recover their domain name, but not without a lot of time, legal expense, and lost sales.

The issue is not just the value of the domain name itself, but the risk of some competitor making use of your stolen domain name. In the case of ShadesDaddy.com, the hackers sold the name to a business in China. As Forbes quoted: “The domain name now redirected to a Chinese website that sold counterfeit merchandise from sunglasses to anything else you could imagine. They had all of our traffic and we were losing thousands of dollars daily in revenue.”

Some victims of domain name theft have successfully used UDRP proceedings to recover their domain names.

However, the interplay between domain name theft and UDRP is complicated and controversial. In theory, a complainant will have a stronger case if he or she can establish strong underlying trademark rights. But, if the complainant has weak rights, or none at all, there is a risk of not being able to satisfy the first UDRP element. And because domain investors often passively hold domain names, rather than fully developed a business and corresponding trademark rights, some domain theft cases are left as an awkward fit for UDRP proceedings.

A theft victim might also have difficulty showing the second and third elements if the respondent is some bona fide third, fourth, or fifth purchaser of the domain name. They will claim that they had no idea that the name was stolen and they might be using it legitimately to run their business. Under those circumstances, a theft victim cannot show the bad faith and lack of legitimate right/interest needed to win a UDRP proceeding.

Just as importantly, some UDRP panelists believe cases of domain theft are simply outside the scope of UDRP proceedings and should be brought in a traditional court.  If you are a victim of domain theft, it is best to seek specific and tailored legal advice for your situation.

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