Recent Case Notes & Commentary

AN AGE OLD QUESTION: IS IT POSSIBLE TO HAVE BAD FAITH REGISTRATION PRIOR TO TRADEMARK REGISTRATION?

This very interesting decision by a panel of 3 at the Hong Kong arm of the Asian Domain Name Dispute Resolution Centre, puts  under pressure the traditional view that bad-faith registration can only occur if the domain name in question was registered after the trademark relied on by the Complainant was registered.


This has long been a matter of debate in domain name circles. In most domain name cases the issue does not arise. That is because in most cases the relevant trademark has been registered long before the disputed domain name; indeed, the presence of the trademark is often the very reason why the domain name has been registered at all. It also makes it comparatively easy for a panel to find bad faith registration, as is done in many cases. Bad faith can easily be found in those cases because the registration of the domain name was aimed squarely at the trademark and its brand and the intention of the Respondent was clearly to do some harm to the Complainant, its trademark and its business.  


But what about those cases where the domain name was registered at a time prior to the Complainant’s trademark being registered or, sometimes, prior to the Complainant even existing. Panels frequently decide that you can scarcely act in bad faith, or with bad intention, toward a trademark which does not exist. Thus, there are many such decisions where the complaint has been dismissed because the complainant has not been able to prove bad faith registration; it has not been able to prove bad faith registration because its trademark had not been in existence when the domain name it is now chasing was created or registered.


But are there any exceptions to this “rule”? Are there cases where the domain name came first, but the Panel has been able to decide nevertheless that the domain name had been registered in bad faith? Yes, and this case is one of them. It allowed a complainant to succeed (on all grounds) even although, when the domain name was first registered, there was no trademark of the complainant’s in existence. How did this happen?


A majority decision of 2/1

Before analysing the decision, we should note that the decision of the panel was 2/1, as there was a well argued dissent filed by one of the panellists.


Background

The Complainant, a member of the one of the largest Internet Service providers – Tencent Group (“Tencent”), has been developing and providing internet and web-based advertising services since 1998. In 2011 it developed mobile social network software , in Chinese–微信 (“weixin” or “wechat”) – which contains various media and visuals whilst supporting multi-party speech chat. It is  the most popular social media platform in mainland China. 


The Complainant acquired its trademark WEIXIN on 25 October 2011. 


The disputed domain name <weixin.com> was originally registered not by the Respondent but by someone else, on 21 November 2000. It underwent several changes of ownership, two of which were transfers to the Respondent, the most recent one being on 10 July 2015. You will see the problem coming up over the horizon. When the domain name was registered there was simply no WEIXIN trademark, so the domain name could hardly have been registered to do harm to a non-existent trademark.


But by the time the domain name came to rest in the hands of the Respondent on 10 July 2015, the trademark was well and truly on the books. So could it be said then that the act of the Respondent in taking over the domain name on that date was done in bad faith, which could be called bad faith registration? 


It was of course important for the Complainant to prove this, as it is one of the 3 essential elements that a complainant under the UDRP must establish.


Although that was so, the unique facts of the domain name having first been registered before the trademark also came up for consideration under the second element- did the respondent have any right or legitimate interest in the domain name?

What, then, did the Panel decide on these issues?


The decision

First, the domain name was identical or confusingly similar (it did not say which) to the Complainant’s well know trademark.  On this point it did not matter when the trademark and the domain name had been registered. The complainant has only to show that it “has” a trademark, which it clearly did.


Secondly, the Respondent submitted that it had a right or legitimate interest in the domain name, because when it was registered in 2000 there was no trademark with which it could have been in conflict. The Respondent was thus “first come first served” and had as much right as anyone else to register the domain name.


The Panel rejected that argument. It relied on paragraph 3.7 of the WIPO Overview which states that “…the transfer of a domain name to a third party does amount to a new registration …”. It seems the Panel felt that this description covered what had happened here. Before the Respondent owned the domain name it was registered in the name of “li zhu” in June 2015 and then on 10 July 2015 it was transferred by li zhu to the Respondent. So the domain name had been transferred “to a third party” namely the Respondent. As the Panel put it, “the time of transfer to the Respondent should be considered the time of registration and as a new registration.” The Respondent had therefore registered a domain name that was a straight copy of what was by then the Complainant’s trademark and it had no right to do so and no legitimate interest in the domain name. The Complainant was prima facie successful in establishing no legitimate rights or interests, and the Respondent’s rebuttal did not demonstrate any rights or legitimate interest.


Thus, although the Panel did not use these words, the Respondent was not “first come, first served”, but “second come, not served.”


Bad Faith

When dealing with bad faith, the Panel looked at the evidence and found that it was clear the Respondent had “re-registered” the disputed domain name at a time when it was aware of the Complainant’s trademark rights in WEIXIN. For instance, by 2015 WEIXIN was a household name in China.


But was this “re-registration” a registration for the purposes of bad faith?

Yes, said the Panel relying again on the WIPO Overview and also on the decision in  HSBC Finance Corporation v. Clear Blue Sky Inc. and Domain Manager, WIPO Case No.D2007-0062 (concerning the domain name <creditkeeper>, where the panel had said “…the transfer of a domain name to a third party does amount to a new registration, requiring the issue of bad faith registration to be determined at the time the current registrant took possession of the domain name.”


Thus, the Respondent registered the domain name at a time when it knew of the Complainant’s trademark, “constituting registration in bad faith.” The Panel added that there was no evidence the domain name had been registered in good faith and that there were indications that the Respondent was using its website at the domain name to pass itself off as the Complainant, showing the Complainant’s trademarks, offering money to users and even changing the content of its website. All of this showed bad faith registration and use of the domain name. The Complainant had won of the third element –bad faith registration and use.


This view seems to have been reinforced by the Third Edition of the WIPO Overview. Clause 3.8:

“Merely because a domain name is initially created by a registrant other than the respondent before a complainant’s trademark rights accrue does not however mean that a UDRP respondent cannot be found to have registered the domain name in bad faith. Irrespective of the original creation date, if a respondent acquires a domain name after the complainant’s trademark rights accrue, the panel will look to the circumstances at the date the UDRP respondent itself acquired the domain name.”


Note also Clause 3.9 which in part says:

“Also, irrespective of registrant representations undertaken further to UDRP paragraph 2, panels have found that the mere renewal of a domain name registration by the same registrant is insufficient to support a finding of registration in bad faith.


On the other hand, the transfer of a domain name registration from a third party to the respondent is not a renewal and the date on which the current registrant acquired the domain name is the date a panel will consider in assessing bad faith. This holds true for single domain name acquisitions as well as for portfolio acquisitions.”


Another Perspective 

As has already been noted, there was a dissenting opinion in this decision and it should be read in detail. Not the least interesting aspects of the dissent are the questions raised by the panellist as to the standing of the WIPO Overview and of prior decisions , now regularly referred to as ‘ precedents” and how far they can accurately be described as precedents. But that is a subject for another day.


Mr Eugene Low of Hogan Lovells represented the Complainant.

Zhonglun W&D Law Firm represented the Respondent.