Brand Owner Loses … But Doesn’t Qualify As A Reverse Hijacker

During a recent presentation, I mentioned that the UDRP and its rule-sets is a complex area – an area that is often underestimated by even experienced and expert trademark litigation counsel.  The recent qualify.com case provides a good example, since the facts of this case – and how the Policy was applied to them – are anything but straightforward.

It’s a basic UDRP requirement that a complainant must show that it owned trademark rights before the respondent acquired the domain.  If no trademark existed when the domain was acquired, the argument goes, the respondent couldn’t have acted in bad faith when it acquired the domain.  But sometimes the respondent isn’t the domain’s original owner.  If the respondent acquired it, by transfer, after the original creation date of the domain, in most cases the acquisition date will control, and the creation date becomes irrelevant.

Here, the Complainant owned its QWALIFY trademark since 2010. The Respondent claims that he registered the disputed domain name in 1999 and that he had never heard of the Complainant prior to receiving the Complaint.  The Complainant points out that the domain had been transferred twice, once in 2012 and again in 2014, after the Complaint was filed. It argues that these transfers are considered new acquisitions for purposes of this dispute.  Countering this point, the Respondent claims that the transfers were between companies that he, himself, owns and that, for all practical purposes, control of the domain has always been his.

Despite the fact that the Whois record of the domain has been hidden by a privacy service for a good part of its life, the Panel noted, from the historic WhoIs record, that the same registrant email address was used on the WhoIs record from 2004 and is used on the current WhoIs record thus indicating that it’s been under the same ownership despite the actual registrant name having changed, and different privacy services having been used over the course of these transfers.  This is an exception to the above rule that the date of a domain transfer is the critical time for purposes of deciding a UDRP case. Despite a transfer, if the seller and buyer are related entities or the domain otherwise remains under effective control of the same party, then the date of the transfer can be disregarded.

Next the Complainant claims that, each time the domain was renewed, it started the clock ticking again, for purposes of finding bad faith, since Section 2 of the UDRP requires a domain owner to represent, when either registering or renewing its domain, that the domain doesn’t infringe on anyone else’s rights.  In a blog post last year I reported that this novel approach to UDRP complaints was applied in the big5.com case. However, it has since been questioned and disfavored by the UDRP community.

Regardless, in the present case the Panelist found that although the qualify.com domain resolved to a pay-per-click website, and despite the fact that most of the links on that site bore no relation to the generic meaning of the word “qualify,” the links also bore no relation to the Complainant’s QWALIFY trademark.  Had the Panel found, for example, that the disputed domain name had been registered in good faith but that subsequent use thereof was in bad faith, it may have been necessary for the Panel to at least consider this Section 2 argument. However, this was not the case for qualify.com since the website content didn’t infringe on the Complainant’s trademark.

Finally, the Panelist declined to find reverse domain hijacking by the Complainant since it was not trying to defraud the UDRP process or steal the domain away from the Respondent. Rather, the Complainant was confronted by a registrant who is not only a seasoned domainer but who has also been the subject of a series of findings of registration and use in bad faith under the Policy. Among the cases brought against the Respondent, the Complainant carefully noted the circumstances of one involving the domain bme.com in which a three member panel determined that the Respondent’s transfer of a domain name between privacy services was actually capable of changing the date on which bad faith was to be assessed. The present case involved a similar transfer, but its facts are sufficiently different from those in the bme.com case that the present complaint failed.

As I noted above, this case highlights the complexity of some UDRP cases and the need to both extensively research the facts of a domain and be aware of developments in UDRP jurisprudence before filing a complaint. Although experienced trademark litigators may be very good at what they do and may be up on the latest court cases involving trademark infringement, the UDRP is a unique animal and brand owners should carefully consider retaining counsel who are up on the latest developments in this highly specialized and evolving area.