United States: Once You've Filed A UDRP, There May Be No Going Back

The Uniform Domain-Name Dispute-Resolution Policy ("UDRP") is the process used to resolve disputes over internet domain names. But its use is not risk-free. A plaintiff who complains about a domain name in bad faith can be found to have committed reverse domain name hijacking ("RDNH"). And in this recent decision, a UDRP panel found that even where the complainant sought to withdraw his complaint before a decision issued, he could still be found to have committed RDNH. This case thus offers several important lessons to would-be UDRP complainants.

Thomas Wang filed his UDRP complaint against the privacy-protected registrant for yish.com, arguing that the domain name (1) was confusingly similar to his U.S. trademark registration for YISH; (2) was registered through a privacy-protection service, which deprived the registrant of any rights or legitimate interests in it; and (3) had been registered in bad faith (which Wang said was the case for two reasons—it had not been actively used for anything more than a pay-per-click website for more than ten years, and it had been registered only with an intent to sell it "speculatively" for more than $10,000). Blue Nova, the privacy-protected registrant, filed a response defending its registration and use of the domain name, asserting, among other things, RDNH.

A few weeks later, Mr. Wang contacted the arbitration forum asking to withdraw his complaint and terminate the UDRP proceeding because his company, Yish Inc., was in the process of winding up. Blue Nova objected. The panel noted that in cases where the parties have not settled, the UDRP rules only allow for termination if it becomes "unnecessary or impossible to continue" the proceeding. Because continuing was not impossible, the only question for the panel to decide was whether it was "unnecessary." The panel concluded it was not. In particular, the panel emphasized that Mr. Wang had been unclear as to whether he was requesting dismissal with or without prejudice. And the panel noted that the difference was significant, since where dismissal is not clearly with prejudice, the complainant might challenge the domain again—and the ability to do that "could be an instrument of oppression especially where, as here, the Respondent has been put to the trouble of preparing and submitting a Response." Additionally, the panel found that Blue Nova's assertion of RDNH warranted a substantive response.

Proceeding to the merits, the panel not only rejected Mr. Wang's complaint, but also found he had committed RDNH. Mr. Wang's YISH registration claimed a first use in commerce on June 15, 2017, but yish.com first registered on August 30, 2001. Because the domain was created long before Mr. Wang acquired any rights in the term "Yish," the panel found Blue Nova could not have registered it with any bad-faith intent to profit from Mr. Wang's trademark rights. And because Mr. Wang should have known he could not prevail, the panel found that his complaint was brought in bad faith.

Among the lessons this decision illustrates are:

1. Do not file frivolous UDRP complaints.

Complainants typically file unwinnable UDRP complaints because either they do not understand the UDRP rules or they hope to coerce a domain registrant to transfer the domain. Both can lead to findings of RDNH. The fact that the panel refused to dismiss this case once Blue Nova had filed its response and asserted RDNH demonstrates the perils of both mistakes.

2. Research your case before filing.

Asserting trademark rights that do not pre-date the disputed domain name's creation date is one of the most common reasons UDRP panels find RDNH. Here, the fact that the domain name was created more than a decade before Mr. Wang owned any rights in the term "Yish" should have at least prompted further investigation.

3. Privacy-protected domains may warrant pre-UDRP enforcement actions.

In cases where a complainant's trademark rights do not pre-date the domain's creation, but the domain registrant's identity has always been private, a successful UDRP may still be possible. Domains sometimes change hands multiple times in the course of their lives, and UDRP panels have ignored the domain's creation date if it was shown that the current registrant acquired the domain at a later date from an unrelated registrant. But complainants hoping to make this argument need to have a reasonable basis for their belief that this happened (or, failing that, at least show that they made efforts to discover the registrant's identity). Among the reasons the panel found RDNH was warranted in this case was that Mr. Wang, before filing his complaint, never even tried to contact the then-unknown domain registrant through the domain's privacy service. Had Mr. Wang done that but received no response, he might have more persuasively argued that he could not have known that Blue Nova was the domain name's sole owner—and avoided a finding of RDNH.

4. When privacy protection is lifted, more research may be required.

Once the privacy protection was lifted, Mr. Wang should have re-evaluated his case. Best practices would have included researching whether Blue Nova had been involved in any prior adverse UDRP proceedings or domain litigations—with the goal of establishing a pattern or practice of bad-faith domain registration. In this case, however, what Mr. Wang would have learned was that Blue Nova had successfully defended against multiple other UDRP complaints and won several RDNH findings—which may have led Mr. Wang to decide that he needed to drop his case to avoid the same fate.

The case is Thomas Wang v. Privacydotlink Customer 546846 / Blue Nova Inc., Case No. D2018-1316 (WIPO Aug. 27, 2018).

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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