Recent Case Notes & Commentary

ANOTHER COMPLAINANT STUMBLES AT THE BAD FAITH HURDLE - AND TWO WAYS TO AVOID FALLING OVER

Impact Bank v. Trace Hallowell

WIPO Case No. D2021-1135

25 June 2021


It is not rare to find in a UDRP case that the Complainant trademark owner has succeeded on the first two elements to be proved, but has fallen over at the end of the race as it cannot prove bad faith registration and use.


That was the situation in the recent case of Impact Bank v. Trace Hallowell, WIPO Case No. D2021-1135. In that case the trademark was IMPACT BANK, a trademark that had been registered on January 14, 2014 with a first use in 2011. But the Respondent had got in first and registered the disputed domain name on May 19, 2004, 10 years before the trademark. That was not an obstacle on the first element and the Panel found that the domain name was identical to the trademark.


So far, so good for the Complainant. Nor was there any problem in finding that the Respondent had no rights or legitimate interests in the domain name, although the domain name was registered by the Respondent on May 19, 2004, approximately seven (7) years prior to the Complainant’s adoption and first use of its IMPACT BANK mark in early 2011. However, the Respondent had caused the domain name to be directed to a bank in competition with the Complainant. Obviously, this could disrupt the Complainant’s business and the Panel accepted this because the Respondent had not filed a Response and the case was undefended. Thus, the Complainant had also won round 2, because these circumstances showed there was no bona fide offering of goods or services by the Respondent and that it had not made a legitimate noncommercial or fair use of the domain name.


But then it came to bad faith and the Complainant’s good fortune ran out. The Respondent had registered the disputed domain name in 2004, before the Complainant registered and first used the IMPACT BANK mark. As the Panel said: “While the registration of a domain name before a complainant has acquired trademark rights does not preclude the complainant’s standing to file a UDRP case, only in exceptional circumstances will a complainant likely be able to establish a respondent’s bad faith.” That is obviously so, because the Respondent had no trademark or trademark owner to whom its bad faith could have been directed.


The panel gave two examples of exceptional circumstances. First, if the Complainant “possessed nascent rights in the IMPACT BANK mark prior to the Respondent’s registration of the disputed domain name in 2004...”. But there was no evidence of this.


Secondly, if the Respondent had been aware of the pending merger between two banks to form the Complainant, citing Avenue 81, Inc. v. Karly Payne, WIPO Case No. D2014-1825, you could say the registration had been in bad faith despite there already being a registered trademark. But, again, there was no evidence of this.


Thus, the general rule had to apply, there was no bad faith registration and the Respondent prevailed, although it had not defended the proceeding and had lost on the first two elements.