A Compact Car Can’t Do The Work Of A Tractor-Trailer: The UDRP Falters When Discovery Is Key

Earlier this year the National Arbitration Forum, (“NAF”) rejected a UDRP complaint brought by the Automobile Association of America (“AAA”) against the owner of the domain <aaa.net> (the NAF decision can be found here.) The AAA then pursued the matter in Federal Court and gained control of the domain after entry of a consent judgment. Here is a link to the court case.

In the NAF case, the AAA claimed that Respondent was a serial cybersquatter and demonstrated a pattern of bad faith.  To support this, the AAA noted that the Respondent attempted to conceal its identity by changing the WHOIS registry information on the day it was served with the Complaint; that some of the links on its pay-per-click Web site were related to AAA’s business; and that Respondent once displayed a profanity in giant block letters on the Web site in an attempt to tarnish the AAA brand.  For its part, Respondent, who made no admission on the point but appeared to be a domain speculator, defended that “aaa” is a term which is used for bond ratings, battery and shoe sizes, and a variety of organizations apart from the AAA and so it did not have the AAA in mind when it registered this domain and did not intend to case confusion with the AAA brand.  The Respondent also claims that only a very few of the ads on its pay-per-click page were related to the AAA and that, in any case, these ads were not chosen by Respondent but were auto-generated by the registrar’s domain name parking service.  Finally, the Respondent argued that because the AAA waited ten years before bringing this complaint, this shows it did not truly believe the domain was registered in bad faith.

This was, by no means, a clear-cut case.  The NAF 3-member Panel, in a rare split decision with multiple written opinions, found that “Respondent may have registered <aaa.net> for any of a number of reasons that have nothing to do with Complainant’s business” and “while Complainant has found among the sea of auto-generated advertisements some related to its business, these appear to be few, and do not seem likely to create or exploit consumer confusion, and on this record could plausibly have been inadvertent.”  Further, the Panel stated that “[e]ven if it were proper to consider Respondent’s alleged history of bad faith registration, it, by itself, would not be enough to establish bad faith registration and use here.” In the end, the Respondent was found not to have acted in bad faith when registering the <aaa.net> domain.

The phrases “on this record” and “here” in the Panel’s opinion demonstrate the Panel’s lack of a full, factual record on which to base its decision.  However, this merely underscores the balance that was struck when the UDRP was created.  As an economical, streamlined and simplified way to resolve most domain disputes, the UDRP does not provide for discovery or other gathering of facts from an opposing party.  This is the job of Rule 26 of the Federal Rules of Civil Procedure and other rules relating to discovery and why UDRP 4(k) allows parties access to most costly court proceedings before a domain is ordered to be transferred to a winning complainant.

The AAA could argue that it got a raw deal in its UDRP case, although there are good arguments to be made that the string “aaa” has alternate generic meanings and that the domain should have been pursued by the AAA years ago.  However, the UDRP system was not designed to handle cases that may turn on specific facts that are not easily gathered from publicly available sources.  As such, the UDRP should be viewed as a fast, inexpensive and easy way to resolve most, but not all domain disputes.  In those situations where a case of bad faith relies on a number of assumptions made about a respondent – such as its reputation as a past cybersquatter – brand owners should consider bringing an action in Federal Court under the ACPA or at least be prepared for the reality that a UDRP case may only be a more economical, but preliminary, attempt to pursue an infringing domain.

In the end, the AAA may have been able to get a consent judgment in Federal court when the domain owner realized it was in for a long and expensive fight.  The better strategy, of course, would have been for the long-established AAA to register this domain when it was still available in the .net and various other gTLD spaces.  An ounce of prevention – especially when your brand has possible generic uses – is worth a pound of litigation.