Recent Case Notes & Commentary

Commercial Disputes Outside UDRP. Conflicting Facts

When a Matter is too Messy for UDRP Arbitration


Kenneth Gaughan v. Erik Rivera / Certapet LLC

FORUM Case Number: FA1906001850153

August 8, 2019


This case would have likely faired better in the courts

When presented with a matter that is bound in factual controversy or legal uncertainty, UDRP arbitrators can choose not to exercise their jurisdiction and leave it substantially unresolved, with advice that the case should be pursued in a court. In the case of Kenneth Gaughan v. Erik Rivera, Kenneth (Complainant) alleged unlawful abuse of his US registered trademark, THERPATIC, by Erik (Respondent) who registered the domain name <therapetic.org>.


This might have been a straightforward cybersquatting case but for Respondent alleging that Complainant had obtained ownership of the trademark fraudulently and that he had actually sold the domain name to him at auction, and therefore had no right to claim it back. In other words, Erik invoked the common law principle of estoppel to prevent Kenneth from attempting to reclaim what he had already sold. In reply, Kenneth said that it was not he who sold the domain name to Erik but rather Therapetic Inc. which is a company with separate legal personality for which Kenneth was an Officer at the time of the sale. These claims caused legal confusion which is not cognisable under the UDRP. Complainant said that Therapetic Inc. had previously assigned its rights to the THERAPETIC trademark to him and so he should be the presumed owner of the trademark. These central facts were disputed by Erik, and the parties’ respective submissions did not sufficiently aid the panellist in resolving the controversy. It became impossible for the panellist to know how to apply the UDRP rules to the situation correctly and for this reason, the matter was dismissed without prejudice, which is to say, dismissed unresolved but with the right to re-issue another Complaint.


What happens next?

The usual questions of confusing similarity, rights to the domain name, and bad faith registration are unnecessary to answer if there are legitimate questions about the ownership of the trademark and therefore the Complainant’s rights to bring the matter to arbitration in the first place. These questions should be dealt with as preliminary matters.


The parties themselves noted that a US court had previously heard trademark disputes between them, and so the panellist rightly recommended that the matter be referred to that same court.


When to go to court

Part of the Respondent’s submission was an accusation that the Complainant had fraudulently obtained the trademark rights. It will often be difficult for arbitrators to apprehend claims of fraud due to their limited fact-finding power. These sorts of legal controversies are best resolved by courts because of their higher level of authority to admit or dismiss evidence and also because they have more powers like discovery, interrogatories, deposing witnesses, taking accounts etc which UDRP panels do not have.


In dismissing the matter, the panellist cited Abbott Labs. v. Patel, FA 740337 noting that “assertions of trademark infringement are ‘entirely misplaced and totally inappropriate for resolution’ in a domain name dispute proceeding because the UDRP Policy applies only to abusive cybersquatting and nothing else”. Importantly for Respondent, panels applying UDRP Policy do not have the power to issue equitable remedies such as estoppel for trademark infringement.


An arbitrator will be ill-equipped to resolve a cybersquatting matter If the ownership of the relevant trademark or the existence of fraudulent conduct are contested facts in a matter. It seems that parties to this sort of matter are not ‘ready’ for arbitration and recourse through domestic courts should be considered as a first resort.


In short, the matter was far too complex for the swift procedure of the UDRP and it had to be left to a court.