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Recent Case Notes & Commentary

The UDRP, Commercial Disputes and Registration in Bad Faith

Groupement des Laboratoires Francais/Soras v. Embryolisse USA

WIPO Case No. D2019-0664

3 June 2019

Oftentimes when there is a commercial or contractual relationship between the Complainant and Respondent in a UDRP claim, and it gives rise to a dispute, we gain an insight into the limitations of the policy. This case, a dispute between a French makeup and cosmetics producer and a former American distributer of its products, reminds us that, in the words of the panel:

The scope of the Policy is limited to the abusive registration of a domain name and does not extend to trademark or contract disputes.

When cases centre around contract law or trademark infringement that are more complicated than clear cases of cybersquatting, it is often impossible for the Complainant to succeed under the UDRP and the party making the claim may have to go to court to obtain redress under the general law. However, it still worth diving into this case to examine exactly why it falls out of the bounds of the UDRP.

The Case:

The miracle moisturiser at the source of this dispute

The case centres around the disputed domain name <>. The Complainant, who has held a long-standing trademark for EMBROYLISSE in a range of jurisdictions was in a business relationship with the Respondent, who sold its products in the United States from 2002 to 2018. The domain name in question, owned by the Respondent, was registered in 2005 and is no longer active. The Complainant wished to acquire the domain name, however the Respondent preferred that it “remain dead,” citing privacy concerns.

The Respondent distributed the Complainant’s products under an agreement that began in 2005, but was terminated by the Complainant in 2018.

With the domain name definitely being confusingly similar to the Complainant’s trademark, the Complainant was left to prove that the Respondent had no right or legitimate interest in the disputed domain name, and that it had registered and used it in bad faith. Using the fact that the contractual relationship between the parties was no longer in effect, the Complainant argued the Respondent had no right or legitimate interest in the domain name. This argument was accepted by the panel. It emphasised that “a Respondent’s claim of rights is generally assessed in ‘the circumstances prevailing at the time of the filing of the complaint.’”[1] While the Respondent may have formerly held rights or a legitimate interest in the domain name, at the time of the case’s filing, it did not, due to the termination of the agreement. Consequently, the second element was found in favour of the Complainant.

The Complainant also contended that, under their agreement, the Respondent was never given consent to register domain names incorporating the Complainant’s trademarks. As such, the Respondent’s actions constituted bad faith use and registration.

The Respondent primarily argued that it was not prohibited under their agreement from registering the disputed domain name, suggesting it was beneficial to the Complainant in aiding the sales of products. The response stressed the Complainant “had known about the disputed domain name for more than a decade without complaint.”

When a commercial relationship has exists between Complainant and Respondent, it is often on the third element where the Complainant falls short – proving bad faith use and registration of the disputed domain name.[2] The panel emphasised that in this instance, “the Complainant has not produced any evidence to suggest that the Respondent made the registration for any other purpose than to further the sales of the Complainant’s products consequent upon the acquisition of the distribution rights in 2005.” Under the scope of the UDRP, such a rationale for registration is not considered bad faith, and as such the complaint fails on this element.

However, it is important to note that the Complainant referred to alleged breaches of the contractual agreement between the two parties; notably the requirement that “that upon its termination, the Respondent shall cease and desist from use of the Complainant’s trademarks “’in any manner’”. Unfortunately for the Complainant, the UDRP is not the place for enforcing contract law or settling generic trademark disputes. The policy merely aids in the quick resolution of clear cases of cybersquatting. The intricacies of contract and trademark law must be left to the courts. While the Complainant may have a legitimate claim to the domain name, such a claim is certainly not within the scope of the UDRP.

This case also highlights the UDRP issue that was widely debated a few years ago: surely if the domain name is now being used in bad faith, even if it was registered in good faith, it should be transferred to the Complainant. One side of the argument said “Yes”; the other side said “No”. The result of the argument was- and the prevailing view today is- that the UDRP is clear, “and” means “and”, not “or” and if you want a different result you should work to change the UDRP so that it reads “…registered or used in bad faith”. But the chances of that happening are thought to be remote.

[1] as outlined in “WIPO Overview 3.0 at section 2.11

[2] Such as Buffalo-Erie Marathon Association, Inc. ("BEMA") v. John Elliott. Case No. D2019-0638. Denied

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