Recent Case Notes & Commentary

Failing to Prove Registration in Bad Faith

Connor Sport Court International, LLC v. Ariel Rivas Productions

WIPO Case No. D2016-2301


Often, Complainants can prove the domain name is being used in bad faith, or at least can argue that from the look of website, the domain name seems to be used in bad faith; but then they have difficulty establishing that the domain name had been registered in bad faith. In these situations, a Panel will have no alternative but to deny the Complaint as both registration and use in bad faith must be proved.


In this case we see an example of a business venture, full of promise and good intentions at the beginning, unravel after a period of time, resulting in the Complainant being unable to reclaim the disputed domain name, despite owning the trademark on which it had been based.


Background

The Complainant manufactured a variety of floor surfaces used across the globe. This line of manufactured products included a portable temporary flooring cover, known as PORTAFLOOR. 


As the registered trademark owner of PORTAFLOOR, in 2010 the Complainant entered into a licensing arrangement with the Respondent. Under this arrangement the Respondent could make use of the PORTAFLOOR trademark, but ownership of the trademark remained with the Complainant.


The Respondent then created the disputed domain name, <PORTAFLOOR.net>, to market specific PORTAFLOOR products.  Relations between the parties then deteriorated, leading to the termination of the original agreement in 2011.  Following a request to the Respondent from the Complainant to transfer the disputed domain name, the Respondent replied that, yes, it would happily do so, for USD 9,000. That put something of a damper on the negotiations.


Identical or Confusingly Similar

Because the Complainant presented evidence of registration of the PORTAFLOOR trademark with the United States Patent and Trademark Office, it was able to establish ownership in the mark.


Given that the disputed domain name was identical the Complainant’s registered mark, the Panel arrived at the uncontroversial decision of finding in favour of the Complainant.


Rights or Legitimate Interests

In light of its discussion regarding the presence bad faith, the Panel chose not to conclude whether the Respondent lacked rights or legitimate interests in the disputed name.


Registered and Used in Bad Faith

To prove a Respondent engaged in bad faith requires the Complainant to satisfy two conditions;

  1. The domain name has been registered in bad faith; and

  2. The Respondent is using the domain name in bad faith.

The issue for the Complainant here, which was fatal to its case, was that it had authorised the Respondent to register the domain name and thus create the website as a medium to advertise and sell the PORTAFLOOR product. Clearly, that was not registering a domain name in bad faith. The Complainant was unable to produce any evidence otherwise suggesting the website was registered in bad faith.


Although the USD 9000 fee requested from the Respondent to transfer ownership of the website to the Complainant may seem excessive, this was balanced against the expenses the Respondent would have incurred having continually developed the disputed domain name and website over many years.


Ultimately, it could not be inferred the Respondent’s intent at the time the domain name was registered was to take unfair financial advantage of the Complainant six years later by trying to sell it back for an amount in excess of its out-of-pocket expenses. 


Accordingly, due to Complainant’s inability to prove the Respondent registered the <PORTAFLOOR.net> website in bad faith, the Complaint was denied.


Legitimate Commercial Relationship

The Panel, quite correctly, found in favour of the Respondent. The Panel also noted that the Policy is intended for cases solely for cases of abusive registrations, colloquially known as cybersquatting. As this claim was brought under the UDRP, the elements required to be proved under the Policy had to be established and as one essential element-registration in bad faith- had not been proved, the case failed.


This case was simply a legitimate commercial relationship gone sour, and not one of cybersquatting. Anything outside the Policy’s narrow scope has to be pursued in a court of law.


To avoid the potential of a costly showdown in court or arbitration, in a situation such as this it would advisable for the owner of a trademark to register the domain name itself, instead of asking its agent , distributor or partner to do it in their own name . After that, they can agree on a licensing or distributorship arrangement allowing the other party to use and update the website.


HOW DID THE COMPLAINANT LOSE?

This case was undefended. So how did the Complainant lose? Because, whether a claim is defended or undefended, the Complainant must prove all of its case under the UDRP, on the balance of probabilities, and it had not done so.