Recent Case Notes & Commentary

Establishing Rights or Legitimate Interests in a Disputed Domain Name

Kite Solutions, Inc. v. Brandon Abbey / Escrow.com

Claim Number: FA 1503001609855

May 4, 2015


A Respondent may defeat a Complainant’s claim by demonstrating they hold a right or legitimate interest in a disputed domain name. The UDRP details a non-exhaustive list of specific examples whereby Respondents may show they hold a right or legitimate in a domain name and hence in the website to which the domain name leads.

This case is interesting because it illustrates that despite assigning the rights to another, the original owner’s rights to a disputed domain name may subsist in a leasing agreement, thereby thwarting the Complainant’s request.


Disputed Domain Name <kite.com>


Denied – Respondent retains website.


Parties:

Complainant

Complainant used the KITE mark in connection with its software business, having registered it with the USPTO in April 2015.


Respondent

The <kite.com> domain name was created 18 years prior to Complainant’s registration of the KITE mark. The disputed domain name was being leased to the Respondent, who held an option to purchase it in January 2018. During the life of the lease agreement an escrow company, Escrow.com, held all rights, title and interest in in the disputed domain name in escrow.


Paragraph 4(a) – Identical and/or Confusingly Similar


Who is the Respondent?

The Complainant registered the KITE mark with the USPTO on the relatively recently date of April 15, 2015.  Because registration of the KITE mark with the USPTO is sufficient to establish rights in it (see Vivendi Universal Games v. XBNetVentures Inc., FA 198803), the Complainant established rights in the trademark.


But there was a preliminary issue as to who was the proper Respondent. The UDRP, in its introductory notes binds “you”, who is, in effect, “the domain-name holder or registrant.” Was the named Respondent, Brandon Abbey / Escrow.com, the domain name holder or registrant of the domain name in question? Yes, because Brandon Abbey/ Escrow.com was an escrow agent who held the domain name until all payments had been made under a leasing agreement by which the domain name was leased by its original owner, Mr Crowell, to a company called MEI, whereupon the domain name would be transferred to MEI. If the payments were not made by MEI, the domain name would revert back to the original owner and lessor. It sounds complicated, but the point that emerged was that Brandon Abbey/Escrow.com was the true respondent because it was registered in the WHOIS as the current registrant or domain name holder.


The remained of the issues under this, the first element of the Policy, were easily resolved:

(a) the simple addition of the gTLD .com is regularly held to be insufficient to distinguish a disputed domain name from a trademark (see Pomellato S.p.A v. Tonetti, D2000-049); and

(b) the disputed domain name was identical to the mark.


So it was unsurprising that the Panel ruled the Complainant was successful in proving the first step in paragraph 4(a).


At this stage, the Complainant was ahead, as it had proved its mark, that the Respondent was the holder or registrant of the domain name and the domain name was identical to the mark.


But did the Respondent have some sort of right or legitimate interest in the domain name so as to defeat the Complainant’s claim? Yes, it did.


Paragraph 4(a)(ii) – Rights or Legitimate Interests

The <kite.com> domain name had originally been registered in 1997; the rights to it were subsequently transferred to the Respondent when it became the holder by virtue of its being the escrow agent. The use of the disputed domain name predated the Complainant’s rights in the KITE mark by approximately 18 years.


Previous Panels have ruled a new domain name registrant will generally not get the benefit of an earlier registration date to defeat a Complainant’s rights acquired after the date of the original registration, but prior to the Respondent’s newer registration. However, this present case was distinguished from that approach and the escrow agent was able to show it had an interest in the domain name based on the long standing and use of the domain name by its owner, Crowell.


The continuous use of <kite.com>, including the 18 years it was in existence prior to the Complainant incorporating, was pivotal in showing the original owner possessed a right or legitimate interest. In this case, the domain name’s original owner possessed the right to transfer title to an escrow agent, which it had done, and then re-acquire ownership if MEI failed to make the necessary lease payments.


On those facts, the panel held that the Respondent had a right or legitimate interest in the domain name, because the Respondent could draw on the accumulated rights of the original owner and lessor.


Therefore, the Complainant had failed to discharge the burden of proving Respondent lacked any rights or legitimate interests in the domain name.


Paragraph 4(a)(iii) – Bad Faith

The Panel held the disputed domain name could not have been registered in bad faith pursuant paragraph 4(a)(iii) of the Policy (see Lockheed Martin Corp. v. Skunkworx Custom Cycle, D2004-0824).


Establishing a Right or Legitimate Interest

The Panel concluded that the Respondent had a right or legitimate interest in the disputed domain name. This was because the owner ( the seller and the grantor of the right under the lease) had leased the domain name to the Respondent). This decision is consistent with the purpose of paragraph 4(a)(ii) of the Policy, and shows a Panel will look at the facts in determining whether a right or legitimate interest can be established.


This paragraph of the Policy is intended to protect the rights of a registrant who has been using the disputed domain name for legitimate reasons prior to proceedings having been commenced. The rights to the disputed domain name subsisted in the terms of the agreement, in which it would revert back to the creator if the lessee failed to make timely payments. But until then, the holder had rights in the domain name.


Accordingly, the leasing of the disputed domain name was a legitimate business arrangement, and when combined with the websites extensive period of continuous use, should prevent it being transferred to a Complainant with a recently registered mark.



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