As anyone who regularly reads this blog has heard me say, there are a surprising number of brand owners and lawyers who have no clue as to how the UDRP operates and the purpose for which it was created. Sadly, this is another of those tails … I mean “tales” … where good money was wasted going after a domain that the complainant had no business pursuing through legal enforcement.

The Complainant does own a registered trademark for SQUIRRELS and has used it, since 2012, to sell computer software and related technology (it’s most well-known product appears to be the Air Parrot app used for screen-sharing between Apple products). It also owns the domain which resolves to the company’s website. As for the Respondent, he registered the domain in 1998 and it resolves to a pay-per-click website featuring links to various other sites that deal with squirrels (the animal) such as “How to Get Rid of Squirrels.” The Complainant had sought out the Respondent and inquired if it would be willing to sell the domain and at what price. The Respondent asked for US$300,000 and the Complainant counter-offered $25,000. When the Respondent rejected this offer, the UDRP complaint was filed.

Complainant claims that Respondent acted in bad faith because he has an active, parked webpage showing sponsored links and he appears to be holding the domain name for the purpose of capitalizing on its value. Essentially, the Complainant asserts that the Respondent acted in bad faith by engaging in the business of owning and selling domain names. The 3-member Panel saw the situation a bit differently.

While it found that the domain is confusingly similar to the SQUIRRELS trademark (a mere threshold test), the Panel went on to find that people “may have a right to register and use a name to attract Internet traffic based on the appeal of a commonly used descriptive phrase, even where the domain name is identical or confusingly similar to the trade mark of a complainant.” In other words, so long as the domain wasn’t registered with a specific brand in mind and the domain was registered for the dictionary meaning of its words, the buying, owning, and selling of domain names is, in fact, a legitimate business.

Finally, the Panel addressed the question of bad faith. It mentioned that prior “UDRP panels have found no bad faith registration where a respondent registered the disputed domain name prior to the time that complainant acquired rights to a mark.” Here, the Respondent owned the domain for 14 years before the Complainant first acquired any rights to its SQUIRREL trademark. However, the Panel gave a glimpse that, were the facts otherwise, it may have adopted a minority view that renewing a domain, to take advantage of its new-found trademark value, can suffice as bad faith registration under the UDRP when it cited the controversial Big 5 decision (which I commented upon in a past blog post.)*

In the end, the Panel did the right thing and held the Complainant guilty of reverse domain name hijacking where the Respondent only used the domain for its generic meaning and owned it for 14 years before the Complainant came on the scene. I fully agree with this ruling since it’s clear that the Complainant brought the UDRP case to apply leverage against the Respondent in its purchase negotiations. As is so often the case, the lesson here is to only hire counsel experienced in domain name disputes since the Complainant here has now wasted its money, gotten a black eye which will hurt it in future enforcement efforts, and I expect the Respondent’s asking price for the domain just went way up….

* However, the Panel later found that “it is therefore implausible that Respondent could have had intent to profit from Complainant’s trademark rights at the time he registered the disputed domain name.” This sentence doesn’t say “registered or renewed” and so suggests that the word “registered” means only the initial act of creating the domain which I feel is inconsistent with the Big 5 decision.”

Steve Levy

Senior Advisor at FairWinds Partners
It can be difficult tackling domain name and social media infringement without the right expertise. Steve covers UDRP cases, URS cases, and all other acronyms and topics related to cybersquatting and usersquatting.
Steve Levy
Are You Nuts? Squirrels Guilty Of Reverse Hijacking.

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