What are your rights when the trademark you properly protected ends up — just slightly altered — as the domain name of a totally unrelated party? That was the question before a WIPO (World Intellectual Property Organization) arbitration panel in 2011 when a well-known baby-carrier manufacturing company filed its case under the Uniform Domain-Name Dispute Resolution Policy (UDRP) against a foreign registrant to compel transfer of the domain name to the trademark holder. Such disputes are common, and this article will help guide trademark holders in preserving domain name rights in their marks.

Case Background

In 2005, the complainant, The ERGO Baby Carrier, Inc., a manufacturer and seller of baby carriers and related products, registered its trademark, THE ERGO BABY CARRIER, with the U.S. Patent and Trademark Office (USPTO) and subsequently used the mark as the name for its products.

In March 2011, the respondent, henghao/zhan jianzong, registered the domain name <<>> with a registrar and, thereafter, that domain name resolved to respondent’s website (i.e., browser searches of the domain name followed the IP address to the server hosting respondent’s website). Respondent’s website contained an identical homepage to that of complainant, and although Internet users were offered goods for sale through respondent’s website, they either did not receive the goods or received goods that were counterfeit copies of complainant’s original product.

On July 19, 2011, complainant, through its attorney, Stevan Lieberman of the Washington, D.C., intellectual property law firm, Greenberg & Lieberman, filed a UDRP complaint, claiming that respondent’s registration of the domain name was in dispute and requesting entry of an order transferring the domain name from respondent to complainant.

Elements of a UDRP Action

In order for a complainant-trademark holder to prevail in an action seeking transfer of a domain name to the trademark holder, it must establish the following three elements pursuant to Paragraph 4(a) of the Internet Corporation for Assigned Names and Numbers (ICANN) UDRP Policy:

(1)  The domain name registered by respondent is identical or confusingly similar to a trademark or service mark in which complainant has rights; and,

(2)  Respondent has no rights or legitimate interests in respect of the domain name; and,

(3)  The domain name has been registered and is being used in bad faith.

(Source: Internet Corporation for Assigned Names and Numbers (ICANN): The following discussions from the arbitration panel decision explain what is required to prove each element.

Identical or Confusingly Similar

The first issue to be addressed by the panel was complainant’s rights in the trademark, which they claimed was the basis for the dispute. Complainant verified such rights by providing USPTO trademark certificates confirming its ownership. It should be noted that it is not necessary for a complainant to have registered its trademark in the country where the respondent resides, but merely that it can establish ownership rights in some jurisdiction.

The next issue to be considered was whether respondent’s disputed domain name was identical to or confusingly similar to the complainant’s trademark. The disputed domain name, <>, incorporated the entire distinctive portion of complainant’s THE ERGO BABY CARRIER mark while adding the generic top-level domain (TLD) “.com” to the mark and merely removing spaces and “the” from the mark. Accordingly, the panel ruled that the changes made by respondent to complainant’s mark did not sufficiently differentiate it from complainant’s trademark so as to avoid “confusing similarity” under ICANN policy.

No Rights or Legitimate Interests by Respondent

Complainant made a prima facie case that respondent lacked any rights or legitimate interests in the disputed domain name, and because of such prima facie case, the burden shifted to respondent to prove that it, in fact, had rights or legitimate interests in the disputed domain name. (It should be noted that although the respondent failed to respond to the complaint, the panel, nevertheless, addressed this element in its decision.)

Unlike complainant, respondent was not commonly known by the disputed domain name, and, in fact, the panel cited a WHOIS information report that identified the registrant of the domain name as “henghao/zhan jianzong.” Furthermore, the panel found that respondent was not engaging in a bona fideoffering of goods or services nor making a legitimate noncommercial or fair use of the disputed domain name. On the contrary, the panel found that respondent’s website, which utilized the domain name was: (a) offering goods for sale that were not received by buyers or that were supplied as counterfeit versions of complainant’s originals, and (b) engaging in phishing by collecting website visitors’ credit card information and other personal information for likely nefarious ends. Neither of such uses evinced legitimate interests.

Registration and Use in Bad Faith

Since the domain name resolved to a site nearly identical to complainant’s — and from all appearances offered goods for sale that appeared to be from complainant and which were in direct competition with complainant’s own legitimate product offerings — Internet users were likely to arrive at respondent’s website and proceed to purchase products from the website in error — believing that they were at complainant’s website or purchasing from complainant. The panel found that such use both disrupted complainant’s business and provided affirmative evidence of respondent’s bad faith registration and use of the domain name.  Appropriating a mark to divert complainant’s customers to respondent’s competing business shows both bad faith registration and use.

Based on the above, the panel ruled in favor of Stevan Lieberman’s client and ordered transfer of the domain name, <<>> to The ERGO Baby Carrier, Inc.

A Caution Regarding “Precedent”

Although WIPO offers an informal overview of prior panel decisions on a multitude of procedural and substantive issues, an important caveat on their website cautions that arbitrators are not bound by previous rulings: “While predictability remains a key element of dispute resolution systems, neither this WIPO Overview nor prior panel decisions are binding on panelists, who will make their judgments in the particular circumstances of each individual proceeding.”

No Damages Under UDRP Actions

Under the UDRP the Panel can only decide to transfer or cancel the domain name, or deny the complaint, but it is not authorized to award monetary judgments. However, in the U.S. if a disputed domain name case is brought pursuant to the Anti-cybersquatting Consumer Protection Act (ACPA), and bad faith or abusive registration is found by the court, then beside ordering forfeiture or cancellation of the domain name, the court may award actual damages such as the profits the domain name registrant made from use of the mark or losses sustained by the trademark holder including lost sales or harm to the mark’s reputation. In lieu of actual damages, the trademark owner can elect to recover statutory damages of between $1,000 and $100,000, the actual amount awarded being fixed by the court in its discretion.

Categories: Intellectual Property Blog, Trademark
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