World Wide Commerce Corporation (”WWC”) registered its domain name, www.worldwidecommerce.com eleven years ago. Unfortunately, the registration inadvertently lapsed.
A domain vulture immediately snapped it up and offered it up for sale. The asking price appeared to be in excess of $50,000. Naturally, WWC filed a UDRP proceeding. As a panelist, they pulled Professor Darryl C. Wilson of Stetson University. Normally, when I see an academic panelist, I presume that the Complainant will lose. Academic panelists, for the most part, would believe that the tooth fairy is real if a respondent said so.
In World Wide Commerce Corporation v. WebContents, Inc., Claim Number: FA0712001124467, Professor Wilson kicked that stereotype in the teeth.
The respondent made the following argument:
Respondent contends that Complainant has no common law rights in the mark WORLD WIDE COMMERCE and that since Complainant “…has failed to establish secondary meaning of the catchphrase ‘Worldwide Commerce,’ the Respondent has as much right as the Complainant to continue ownership of the domain name going forward.” Respondent also states that its intention was to use the domain name for use in future business endeavors, that it is currently using the domain name for legitimate purposes, and that it is not currently nor did it in the past register and use the disputed domain name in bad faith. Respondent further notes, “There is an element of ‘Finders Keepers, Losers Weepers’ in this decision. We believe that is as it should be.”
With respect to the complainant’s common law rights, the respondent was arguably correct. I doubt that the complainant could convince a trademark examiner that the highly descriptive term, “World Wide Commerce” had developed secondary meaning sufficient to register the mark. Nevertheless, Wilson applied the UDRP properly. Perhaps these rights were weak, but Wilson properly held that the rights were sufficient to make out a prima facie case.
Complainant has made continuous use of the mark in commerce for more than eleven years, conducting business under the mark in connection with its web and telecommunication services. Complainant registered the “World Wide Commerce Corporation” name with the Colorado Secretary of State, registered and previously used the domain name before the registration lapsed, and purportedly generated revenues in excess of $5.3 million, while serving a long list of global clients. Complainant’s President contends in an affidavit that Complainant has spent significant time and money in generating substantial goodwill and consumer recognition in the WORLD WIDE COMMERCE mark.
Much better than that, Wilson explicitly recognized that snapping up an inadvertently dropped domain name creates both a lack of legitimate rights on the part of the respondent and that it is evidence of bad faith registration and use.
While it is clearly recognized that anyone has the right to purchase and make immediate or planned use of an available, non-confusing domain name that is legitimately offered for sale, Respondent registered the Domain Name after Complainant had inadvertently allowed the Domain Name to lapse, subsequent to eleven years of continuous use in commerce. Registration of a domain name under these circumstances is evidence of a lack of legitimate rights or interests in a domain name. See Zappos.com, Inc. v. Turvill Consultants, FA 404546 (Nat. Arb. Forum Feb 28, 2005) (finding that “[t]he fact that Complainant had previously held the domain name registration and has mistakenly allowed it to expire is further evidence that Respondent lacks rights and legitimate interests in the domain name under Policy ¶4(a)(ii).”); see also Am. Anti-Vivisection Soc’y v. “infra dot Net” Web Servs., FA 95685 (Nat. Arb. Forum Nov. 6, 2000) (holding that complainant’s prior registration of the domain name was a factor in considering rights and legitimate interests in the domain name).
What I really love is how the Panel slapped the unethical registrant with his own “finders keepers” language.
Complainant’s previous registration and use of the disputed domain name before the registration inadvertently lapsed coupled with Respondent’s immediate registration and refusal to transfer further supports that Respondent’s registration and use of the domain name was in bad faith pursuant to Policy ¶ 4(a)(iii). See Florists’ Transworld Delivery, Inc. v. Domain Strategy, Inc., FA 113974 (Nat. Arb. Forum June 27, 2002) (“Complainant previously held the contested domain name before an inadvertent error allowed the registration to lapse. Respondent apparently took advantage of the presented opportunity and immediately registered the lapsed domain name. Respondent’s opportunistic actions exhibit bad faith under Policy ¶ 4(a)(iii).”); see also RH-Interactive Jobfinance v. Mooburi Servs., FA 137041 (Nat. Arb. Forum Jan. 16, 2003) (finding that the respondent’s registration of the domain name “immediately after Complainant failed to timely renew the domain name registration” was evidence of bad faith).
While “finders, keepers-losers, weepers” is a quaint and classic saying it is also an oversimplification of the underlying law. Actually the finder takes as to all the world except the true owner, or the prior peaceable possessor. WWC Corp. provided sufficient evidence to show that it fit one of the preferred categories and Respondent, who rather unconvincingly claims to be an innocent finder here, is the party that must “tear” itself away from the disputed domain name.
Thank you Professor Wilson for both giving us a good decision and for burnishing the tarnished image of the gullible (or simply greedy) academic UDRP panelist.
For a contrary, and clearly idiotically-reasoned decision, see Canned Foods, Inc. v Ult. Search Inc., Claim Number: FA0012000096320.
By Email
By RSS Feed
March 31, 2008 at 11:53 am
An awful decision by Professor Wilson. How does a respondent’s acquisition of a lapsed domain name, no matter how quickly it acquires the domain name, equal bad faith? This domain name is comprised of common words and is nearly generic. Complainant had a mere 5.3 million in sales over how many years? Where’s the proof that that the name was ever used as a trademark? Where’s the proof of acquired distinctiveness? Obviously a decision that domain name owners would like, because it protects them from their own stupidity. But as for the soundness of the decision per se, it isn’t.
March 31, 2008 at 12:05 pm
Really? You think so? I respect your position, but it seems sound to me.
I agree that it is nearly generic… but $5.3m in sales seems to create some common law rights, no? The case does discuss that there were affidavits and sales figures submitted.
I think what I like about this decision is that Wilson applied some common sense to the process. I agree that it is difficult to blame someone for “bad faith registration” if they simply snapped it up upon deletion. How could they know that the registrant had not chosen to drop it and thus wanted to be rid of it?
On the other hand, the UDRP is supposed to keep domain disputes out of the courts. It is supposed to be a streamlined process. I see hyper-technical application of the UDRP (like Sorkin applies) as creating a greater likelihood of litigation, costing domain owners and trademark owners alike. I know at least one prominent domain name attorney who no longer advises his clients to use the UDRP at all.
In writing this reply out, I do start to see your point more clearly. Element 3 requires bad faith registration AND use, thus no bad faith registration = no transfer.
But, Wilson’s reasoning seems to be that buying for the sole purpose of reselling is not “good faith” under these facts. I have to agree.
March 31, 2008 at 2:08 pm
I don’t see how auctioning off domain names is not a legitimate business in this day and age. If the domain name was acquired in good faith, why can’t you sell it any way you want to?
How does auctioning it off prove that you acquired it in bad faith?
I thought the purpose of the UDRP was to prevent cybersquatting. Bad faith is a prerequisite both in the registration and use of the domain. With a weak mark like this, I don’t see how 5 million in sales over eleven years, mostly in a single state, can create any presumption that the respondent knew of Applicant’s rights and acquired the domain in bad faith.
As you know, many domains are populated automatically with links that relate to the domain name, so bad faith use is often provable because of the subject matter of the links. With a domain name as descriptive as this one, however, even that leap in logic is questionable.
However, bad faith registration is not so easily proven, and unless Complainant has a registered mark, or a common law mark that has proven recognition, I think one has to be careful in attributing bad faith in the registration.
April 1, 2008 at 4:04 am
If we look at paragraph 4(b) of the UDRP, this registrant’s behavior seems to fit.
b. Evidence of Registration and Use in Bad Faith. For the purposes of Paragraph 4(a)(iii), the following circumstances, in particular but without limitation, if found by the Panel to be present, shall be evidence of the registration and use of a domain name in bad faith:
(i) circumstances indicating that you have registered or you have acquired the domain name primarily for the purpose of selling, renting, or otherwise transferring the domain name registration to the complainant who is the owner of the trademark or service mark or to a competitor of that complainant, for valuable consideration in excess of your documented out-of-pocket costs directly related to the domain name; or
(ii) you have registered the domain name in order to prevent the owner of the trademark or service mark from reflecting the mark in a corresponding domain name, provided that you have engaged in a pattern of such conduct; or
(iii) you have registered the domain name primarily for the purpose of disrupting the business of a competitor; or
(iv) by using the domain name, you have intentionally attempted to attract, for commercial gain, Internet users to your web site or other on-line location, by creating a likelihood of confusion with the complainant’s mark as to the source, sponsorship, affiliation, or endorsement of your web site or location or of a product or service on your web site or location.
This domain was not acquired by some poor businessman who simply sat down and said to himself, “You know what would be a great domain name for my business? http://www.worldwidecommerce.com.” It was acquired through an automated process, which I think in itself could be considered bad faith.
Mind you, I think that the decision would be different if the registrant had simply gone out and bought http://www.worldwidecommerce.net.
Wilson applied the UDRP as a totality of the circumstances policy, as it was supposed to be: Arbitrators are supposed to think, not simply act as if they had a checklist and if you can’t check each pre-determined box, then the complaint fails.
First of all, the test for bad faith is not exclusive. Wilson could have properly said that it is evidence of bad faith if the registrant simply registered the domain with an automated program. He didn’t, but it would have been proper to do so.
I think that where we disagree is here: I believe that you can have bad faith without actual knowledge of the complainant’s rights. Registering a name with the plan to launch a legitimate site =/= bad faith. Registering a name with a plan of nothing more than speculation and tasting in mind should be evidence of bad faith.
That doesn’t mean that every speculative registration should be subject to a UDRP transfer. If one wants to register “www.themostincrediblepage.com” because one thinks that one day, somebody might be willing to pay for it… well, that is parasitic and adds nothing to the internet except confusion and added costs for the later legitimate business owner. It is bad faith registration. However, it is bad faith registration of a domain in which nobody has rights. The registrant keeps it.
April 1, 2008 at 6:40 am
Marc, exactly which of the four section of para 4(b) do you think apply here?
April 1, 2008 at 10:24 am
First off, thank you for debating this with me. Always a pleasure to discuss this kind of thing with one of my TM law heroes. :)
Now to the meat of your question.
4(b) leaves it open to the panelist to find bad faith outside the four factors. 4(b) specifically says the following circumstances, in particular but without limitation, if found by the Panel to be present, shall be evidence of the registration and use of a domain name in bad faith:. See, e.g., Media General Communications, Inc. v. Rarenames, WebReg, Case No. D2006-0964 (”The list of instances of bad faith in Policy, paragraph 4(b) is explicitly non-exclusive. The Panel must consider, as have several previous UDRP panels, whether the Respondent’s apparent disregard for the likelihood that the Domain Name corresponded to a distinctive trademark is itself evidence of bad faith in the registration and use of the Domain Name.“).
Therefore, we don’t need any of the four factors in order to find bad faith. The UDRP was supposed to be used along with independent reasoning on the part of the arbitrator. Nevertheless, I think that factor (i) could fit. But, instead of shoehorning the facts into (i)-(iv), as some panelists seem to believe we must (See any decision by Cabell for evidence of this kind of thinking), lets go with what the UDRP really says. The list is non-exclusive.
Automated registration of mass lists of domains has been held to be bad faith. See See Mobile Communication Service Inc. v. WebReg, RN, WIPO Case No. D2005-1304 (“where a respondent has registered a domain name consisting of a dictionary term because the respondent has a good faith belief that the domain name’s value derives from its generic qualities, that may constitute a legitimate interest and the offer to sell such a domain name is not necessarily a sign of bad faith. Where, in contrast, a respondent registers large swaths of domain names for resale, often through automated programs that snap up domain names as they become available, with no attention whatsoever to whether they may be identical to trademarks, such practices may well support a finding that respondent is engaged in a pattern of conduct that deprives trademark owners of the ability to register domain names reflecting their marks.” ). C.f. Grundfos A/S v. Texas International Property Associates,
Case No. D2007-1448 (”claim of “no actual knowledge” does not do anything to avoid the “willful blindness” difficulty the Respondent faces in terms of cases such as Mobile General Communications and Media General Communications, Inc.”); HSBC Finance Corporation v. Clear Blue Sky Inc. and Domain Manager, Case No. D2007-0062 (willful blindness in use of automated registration system resulted in registration of “credikeeper.com” domain)
April 1, 2008 at 10:59 am
I realize that the panelist may go outside the four factors of 4(b), but you’re the one who listed the factors, not me. I don’t see how (i) applies.
The fact that you can cite a case or two that says that automatic registration equals bad faith is of little moment. The question remains, did the respondent register in bad faith. If you are saying that automatic registration is per se bad faith, I disagree. Where do you draw the line? Is a respondent who spends the day combing the Internet looking for lapsed domains any better that the automatic registrant?
The domain at issue here is almost generic. The fact that the original registrant got the domain name was sheer luck. The fact that he lost is is also sheer luck, albeit bad luck. That’s the way it goes. If he can’t establish bad faith registration, he loses. He benefitted from the system when he got the domain name, so now why should he ignore the system and claim absolute rights in something that fell into his lap in the first place?
April 1, 2008 at 2:38 pm
Sorry, I probably didn’t need to have quoted all of Section 4 in my prior post.
I am not saying that automatic registration is per se bad faith. I’m saying that the holding in Mobile Communication Service Inc. v. WebReg, RN, WIPO Case No. D2005-1304, shows us where the line is drawn: If a “respondent registers large swaths of domain names for resale, often through automated programs that snap up domain names as they become available, with no attention whatsoever to whether they may be identical to trademarks, such practices may well support a finding that respondent is engaged in a pattern of conduct that deprives trademark owners of the ability to register domain names reflecting their marks..
So, no, not per se bad faith.
A respondent who spends the day combing the internet manually looking for lapsed domains is no different. If he simply snaps up lapsed domains without regard for the rights of others, then he is likely acting in bad faith… or at least possibly acting in bad faith.
Imagine a guy stands outside Fenway Park waiting for people to accidentally drop their tickets on the ground. As soon as they do, he dives on the ticket and then offers to scalp it to the highest bidder, including the guy who dropped it. That’s what was going on in this case.
I agree that the domain here was almost generic. I have no dispute with that. The fact that he got is is sheer luck? Perhaps.
The fact that he lost it was bad luck too. I agree.
And, if he can’t establish “bad faith registration” then he loses — I again agree with you. I just think that “bad faith” doesn’t need to rise to the level of mens rea for a crime. Acting with reckless disregard to the rights of others is “bad faith,” and if you’re a domain vulture, you should expect that you’ll occasionally pick up a ticket to the game that someone didn’t mean to throw on the ground. In that circumstance, the domain vulture should have to give it back to the domain owner who inadvertently lost the domain.
AND, I would go further… I think that if you own a GENERIC name, and you inadvertently let it drop, if someone picks it up (and you can prove that the drop was inadvertent) they should have to give it back.
P.S. ALL WIPO cases that have dealt with automated registration have come out the same way. ALL of them.
April 2, 2008 at 1:42 am
Just wanting to put my .02 worth in on this.
I have a basic understanding of law, and really enjoy reading your posts and the comments. My thought is that a company, especially one that has made 5.3 million, should know when a subscription is about to expire.
What I didn’t see here, is exactly when the bad faith purchase occured. With my domain, I receive e-mails and postal mail informing me of my need to renew. In addition, I receive offers from other companies (I use http://www.netsol.com for my registration) to offer me a better deal if I renew through them. In addition, At least my registrar has maintained myself as owner for up to 30 days after the expiration date.
After doing a bit of research myself (although I should actually be finishing my thesis), I find that worldwidecommerce.com is registered through the company godaddy.com, which offers a service of allowing you to put your name on a waiting list in case a specific name becomes available. I found that they offer this service for my domain as well. Just gives me more reason to renew mine early and for a longer period of time, like say spending the $279 to register it for 20 years, which is offered through http://www.netsol.com but I was unable to find that info on godaddy.com. WWC is scheduled to expire in October of 2008.
Just some basic information… oh, and my actual domain is http://www.bearland.com
April 2, 2008 at 11:49 am
I’d agree with you if, say, I acquired that so-called generic domain name and either tried to sell it to its last registrant, or parked it showing competing ads to the registrant’s mark and got a C&D. Beyond that, I don’t or shouldn’t have to give it back just because someone once possessed it but didn’t renew their registration contract, more so if I have every intent to use it differently.
But…that’s just a difference of opinion.
From reading this decision:
If the respondent refuted that somehow, hmm, I wonder if that would’ve killed the complainant’s trademark rights claim? And that’s assuming the complainant doesn’t file a supplement afterwards.
Apparently that and a couple of other factors, especially with the respondent having 2 UDRPs against them, contributed to their losing this one.
Also from the decision:
Lately I’ve noticed panelists treating cases where domain names expired but acquired through auctions as “new registrations” inspite of their being registered for a long time. It makes sense in a way since acquiring it through an auction (and subsequently agreeing to the registrar’s contract) is when their “ownership” began.
A bit off-topic, but gotta love that line where the complainant blamed Go Daddy for not renewing the domain name. Sometimes it’s conveniently easier to blame someone else for not taking care of their own contracted responsibilities. :D