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Recent Case Notes & Commentary

Bad Faith After Domain Name Registration – Is It Enough?

MD On-line, Inc. v Yenta Marketing, Inc

WIPO Case No. D2014-1468

Decision 8 November 2014

There is discourse amongst the UDRP community about what should constitute bad faith for the purposes of the policy.

Currently, there is a ‘two-step” or conjunctive requirement for Complainants to prove on the issue of bad faith; they must prove both registration and use of the domain name in bad faith. However, some Panelists have developed an argument that the UDRP should implement a “one-step” standard that although bad faith may not have existed at the time of registration of the domain name, nevertheless bad faith is proved even if it occurred after the registration of the domain name.

Under this proposed approach, a Complainant need only prove that a domain name was either registered or used in bad faith. Imagine, for instance, that a domain name had been registered by the Respondent in good faith, with no ill will or targeting of the Complainant trademark owner, or perhaps never having heard of the Complainant or its brand, but the Respondent subsequently finds that it has hit the jackpot and stumbled across a valuable and probably newly popular brand name. It then changes tack and sets up a website targeting the Complainant, copying the trademark owner’s website, promoting competing goods or services or perhaps using the new and respected brand name to sell pornography. Can it be said in that or similar fact situations that the bad faith shown to have occurred after the registration, rather than at the time of registration, meets the essential requirement of bad faith under the UDRP? Some who argue for that view rely in part on the fact that paragraph 2 of the Policy in effect puts a continuing obligation on registrants of domain names to ensure that they do not trespass on the rights of a third party, which includes trademark owners. It is then said that this continuing obligation is broken if and when a registrant starts to use the domain name in bad faith by putting  material on the website that is damaging to the trademark owner, particularly if it does so after a renewal of registration of the domain name has occurred.

The Panel in the recent MD On-line case rejected the proposition that only one of the sub-elements of bad faith – use in bad faith- need be apparent, even if the registration itself had been in good faith. In adhering to the plain wording of the Policy, it had usually been held that if the Respondent had been using the domain name in bad faith and there was no evidence of registration in bad faith, the Complainant would fail, as it did in MD On-line. The MD On-line case therefore follows the traditional approach that both bad faith registration and bad faith use must be proved.

The Parties and the Domain Name

Complainant was MD ONLINE, a healthcare information technology provider for over 19 years. Complainant did not have a registered trademark but claimed common law rights in MD ONLINE acquired through use of the MD ONLINE brand in commerce since 1995.In May 1996, the Complainant registered its own domain name,<>, that reflected its trademark.

Respondent was Yenta Marketing, a company operating out of the American state of Georgia. Respondent registered the disputed domain name, <>, in May 1998.

Identical or Confusingly Similar

The Complainant had not registered a trademark for MD ONLINE by the time the domain name had been registered in May 1998; accordingly it had to rely on its submission that it had acquired common law rights in MD ONLINE so that, although it did not have a registered trademark, it still had a trademark, namely the common law one that it hoped it could prove. To prove this, the Complainant tendered a significant amount of evidence relating to extensive recognition and use of its mark. It was successful in convincing the Panel it had acquired a trademark at common law. The common law trademark rights it had acquired ran from 1995; Complainant had claimed common law rights in MD ONLINE acquired through use of the MD ONLINE brand in commerce since1995. But at least it had established trademark rights in MD ONLINE and it had acquired them before the domain name was registered in May 1998.So far, so good.

The Respondent’s domain name, <>, was then found to be confusingly similar to the Complainant’s MD ON-LINE mark. This finding is unsurprising, as numerous decisions have held that the omission or addition of a hyphen will not distinguish a disputed domain name from a trademark. So the Complainant had got to first base.

Right or Legitimate Interests

Complainant was then able to show that the Respondent prima facie lacked any rights or legitimate interests in the domain name.

The Respondent conceded that the domain name was linked to a parking page, containing links to redirect users to websites of companies that were competitors of the Complainant. As a result, Respondent was unable to prove that it had a right or legitimate interest in the domain name; the Complainant had thus satisfied paragraph 4(a)(ii) of the Policy. But then came the big test: bad faith.

Registered and Used in Bad Faith

The Complainant’s argument regarding the final element hinged on the Panel accepting the point that despite an absence of bad faith at the time of domain name registration by the Respondent, the subsequent manifestation of bad faith that had been shown by the evidence to have occurred after the registration was sufficient to prove bad faith. That argument failed.

The Complainant had tendered evidence highlighting that the Respondent had engaged in post-registration targeting of the mark for commercial gain. It had therefore successfully argued that there had been bad faith, but it was bad faith occurring after the registration of the domain name. That being so, the Complainant had failed to prove bad faith registration, as all it could show was bad faith use of the domain name after the event.

The Complainant was unable to submit evidence showing that the Respondent targeted the MD ON-LINE mark when the domain name was registered. It had been registered in May 1998, but at that time, no bad faith had occurred. The Complainant argued that when the Respondent registered the domain name, it had constructive notice of the Complainant’s common law trademark rights, but that argument failed, as it usually does. That argument having failed, the Complainant was thus unable to show that there had been bad faith at the time of the registration. The only bad faith was the bad faith that had occurred after the registration. This inability to produce evidence showing registration in bad faith by the Respondent was a fatal blow to the Complainant’s case. Accordingly, the Complainant’s argument failed, the case was lost and the domain name remained with the Respondent.

Must bad faith be determined by a “two-step” investigation under the Policy as it currently stands?

The argument that bad faith conduct after registration was sufficient is supported by some. But it does not have universal support and does not now seem a strong ground on which to base a claim for transfer. Many observers argue that the Policy’s language in paragraph 4(a)(iii) is unequivocal; the relevant point in time for a Panel’s investigation of bad faith is said to be, first of all, the time the domain name was registered and then , of course, during the latter time when the domain name was used. Most observers therefore, at least today, agree that “and” does not mean “or” and that what must be shown is a two step or conjunctive requirement, i.e. that bad registration and bad faith use must both be shown.

It must be acknowledged that others are not inclined to follow this more traditional line of reasoning, instead preferring a more creative interpretation. They argue that if bad faith is shown, that is sufficient. Such a view would provide some benefits for complainants , but it seems now that it can only be brought about by amending the UDRP along the lines of the Australian and Europe (as in .eu) policies where bad faith registration or bad faith use must be shown, not necessarily both. However, the view has been expressed that if paragraph 4 (a) (iii) were reopened and redrawn, it would open the floodgates and certain interests would push for a re-drawing of other contentious provisions in the UDRP and perhaps of the whole Policy.

As is usually said in “floodgates” arguments, you never know where that might lead.

NOTE: Research for this article was undertaken by Jacob Bayley, but the final test and the views expressed are the responsibility of the Editor.

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