Trademark Law

Passive Holding Is Enough to Satisfy Bad Faith Use Requirements Under the UDRP?

By Brian Hall

A recent UDRP decision again explains how much use of a domain name is required in order to satisfy the UDRP.  Recall, a Complainant must establish not only a bad faith registration of a domain name under the UDRP, but it must also establish a bad faith use of the domain name under the UDRP.  Paragraph 4(b) of the Policy sets forth the four factors that that shall be evidence of registration and use of a domain name in bad faith, including:

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 list is nonexhaustive, but rather provides the common examples that will suffice to show bad faith.  Panel decisions have added to this list.  The recent decision of Barcelo Corporacion Empresarial, S.A. v. Media Insights discusses passive holding:

Here, the web page to which the disputed domain name resolves is not being used, other than by way of the text ?Vacation Tours? set out in the browser information bar. This lack of active use of the web page is known as ?passive holding?. Passive holding can in principle however, even though it may not fit squarely within any of the four inclusive examples set out in paragraph 4(a)(iii) of the Policy, constitute registration and use of a domain name in bad faith; see, for example, Telstra Corporation Limited v. Nuclear Marshmallows, WIPO Case No. D2000-0003, and Jupiters Limited v. Aaron Hall, WIPO Case No. D2000-0574.

In addition, the above case refers to Telstra Corporation Limited v. Nuclear Marshmallows, a case that elaborates upon the nonexhaustive factors to include other examples of bad faith use, including:

(i) the Complainant?s trademark has a strong reputation and is widely known, as evidenced by its substantial use [],

(ii) the Respondent has provided no evidence whatsoever of any actual or contemplated good faith use by it of the domain name,

(iii) the Respondent has taken active steps to conceal its true identity, by operating under a name that is not a registered business name,

(iv) the Respondent has actively provided, and failed to correct, false contact details, in breach of its registration agreement, and

(v) taking into account all of the above, it is not possible to conceive of any plausible actual or contemplated active use of the domain name by the Respondent that would not be illegitimate, such as by being a passing off, an infringement of consumer protection legislation, or an infringement of the Complainant?s rights under trademark law.

Another UDRP panel decision, Jupiters Limited v. Aaron Hall, held, ?Respondent?s conduct does not fall within any of the circumstances specifically enumerated in paragraph 4(b) of the Rules.  But that is not the end of the matter.  These circumstances do not constitute a code and there are many other circumstances which may evidence bad faith.?  These cases all make clear that passive holding can be evidence of bad faith use under the UDRP.

A link site intended to gain click-through revenue, pornosquatting, or direct competition can be clear evidence of bad faith use under the UDRP.  However, when the use is not so blatant, each case must be analyzed in order to determine whether facts exist to satisfy the bad faith use requirement under the UDRP.  Cybersquatters are becoming more and more sophisticated, but you can contact a domain name dispute attorney today to determine whether or not you may file a UDRP against a domain name registrant who is passively holding a domain name incorporating your trademark. 

Full post as published by Domain Name Dispute Blog on April 09, 2008 (boomark / email).