by Ivan Lipshitz, Adv., JMB Davis Ben-David
If your business has a digital presence, its domain name is its most valuable digital asset. For most start-ups, established companies and organizations, your domain name is central to the identity of your business or enterprise, and your brand value is built around it. It is not unusual to hear of public domain name sales reported in the tens or hundreds of thousands of dollars, and often there will be domain name sales reported in the millions. The most expensive domain name ever sold was https://www.cars.com/ which was sold for a staggering US $872 million!. The top 25 most expensive domain names publicly reported as of July 2022 can be found here.
What is the Distinction between a Domain Name and a Trademark?
A domain name is a unique identifier for a website. It serves as an address that allows people to find and access a website on the internet. Domain names are a vital part of the digital economy because they enable users to easily remember and access specific websites, rather than having to remember and enter a long string of numbers (called an IP address) to access a site. In most cases, your trademarked business name, house -brand or brand name followed by the addition of a generic Top-Level Domain (“gTLD”) or country code Top-Level Domain (“ccTLD”) serves as your domain name by which your business is known and identified.
On the other hand, a trademark is a source identifier that distinguishes your business and brand and therefore its products from those of its competitors. Brand recognition is therefore at the cornerstone of a trademark. A trademark can be a word, name, symbol, logo, design, or any combination thereof that distinguishes the goods and services of one party from those of others and indicates the source of the goods and services. Famous trademarks include everything from McDonalds` golden arches to Nike`s “JUST DO IT®” slogan, to “AMAZON®”, or “MICROSOFT ®”
In short, domain names, per se, and trademarks have different functions. Notwithstanding that, however, domain names are frequently registered as trademarks, and so any abuse of a domain name can diminish its value, and can therefore seriously jeopardize the value of both your trademark and your business.
Domain Name Abuse Can Seriously Jeopardize your Business
In view of the high value of domain names it is not surprising that they are often attacked. This may include typo- and/or cybersquatting (the adding or omitting of letters to create minor misspellings), domain spoofing, network breaches, business email compromise or other types of domain name abuse. This can often lead to internet traffic diversion and the unwitting redirection of visitors to your company’s website, customer confusion, the sale of counterfeit goods, phishing attacks, and even the distribution of malware. All of these harmful acts and wrongdoings can have far-reaching and negative implications for your brand identity. It can even put your entire business at risk. Failure to defend your brand and domain name against such attack and infringement can seriously harm your business operations, cause substantial revenue loss, and deleteriously damage and diminish the good name and reputation of your business.
Fortunately, there are extra-judicial procedures available to trademark owners to enforce claims against abusive domain name registrations of trademark-based domain names internationally, and to enable quick and effective recovery and transfer of such abusive domain names to their rightful owner without resorting to expensive, lengthy and time-consuming litigation in the traditional courts.
The Uniform Domain-Name Dispute-Resolution Policy (“UDRP” or the “Policy” ) and the Uniform Rapid Suspension Systems (“URS”) administrative procedures are two such extra-judicial procedures often used to resolve these types of abusive domain name disputes. The UDRP is an effective tool designed to provide an efficient and streamlined process for adjudicating domain name disputes for all gTLD`s and some ccTLD` s and is by far the most popular, well-known and effective of these administrative procedures. It was set up in 1999 by the Internet Corporation for Assigned Names and Numbers (“ICANN”), a non-profit organization responsible for the secure operation of the internet for the resolution of disputes that arise from abusive registrations of trademark- based domain names.
Domain Name Dispute Resolution Procedures
The dispute resolution process is commenced by filing a complaint under one of the above recognized administrative procedures, like the UDRP, to a recognized domain name dispute resolution service provider, for e.g., to the World Intellectual Property Organization ( “WIPO”) established WIPO Arbitration and Mediation Center ( the “Center”), the FORUM or one of the several other worldwide bodies accredited to adjudicate upon domain name disputes. A dispute resolution service provider derives its jurisdiction contractually by the domain name registry registration agreement to which the disputed domain name holder is bound having contractually agreed to resolve domain name disputes brought by third parties in accordance with ICANN’s UDRP or URS at the time of registration of his abusive domain name.
If a domain name dispute resolution complaint is submitted to the UDRP under the aegis of the Center, it must satisfy the formal requirements of the UDRP, the Rules for UDRP (the “Rules”), and the WIPO Supplemental Rules for the UDRP. After registrar verification of the disputed domain name in accordance with the Rules, the Center formally notifies the respondent of the complaint, and the respondent has an opportunity to submit a response. There is no right of reply under the Rules ( See: Grove Broadcasting Co. Ltd v. Telesystems Communications Limited, WIPO Case No. D2000-0703).These submissions are filed online according to a strict and rigid timeline.
The complaint is adjudicated by a Panel comprising of one to three panelists. The Panelists are typically practicing lawyers, jurists or academics who are experts in trademark law and internet law, especially pertaining to domain names. Paragraph 15(a) of the Rules instructs a Panel to decide a complaint on the basis of the statements and documents submitted in accordance with the Policy, the Rules and any rules and principles of law that it deems applicable without the benefit of oral testimony, cross-examination and discovery procedures by either of the parties. If no response is submitted by the respondent, the Panel may view the Respondent’s failure to do so pursuant to the Rules as uncontested and draw such inferences as it considers appropriate in the circumstances. It may then decide the administrative proceeding on the basis of the complainant’s undisputed representations. Given the short time lines under the UDRP’s proceedings, while it is important to adhere to these timelines, it is equally important to give both parties a fair opportunity to present their case before the UDRP forum.
Panels often allow the Complainant to make additional supplemental submissions in reply to a Response (See: Trent Limited v. Mozeeto Media Ltd, Zudio Fitness Case No. D2022-4435 WIPO Case No. D2022-4435). Paragraph 12 of the Rules also provides that in addition to the complaint and the response, the Panel may request, at its sole discretion, further statements or documents from either of the Parties. Unsolicited supplemental filings are generally discouraged. Panels have repeatedly affirmed that each party be given a fair opportunity to present its case. Thus, a party submitting or requesting to submit a supplemental filing should clearly show its relevance to the case and why it was unable to provide the information contained therein in its original complaint or response before being permitted to submit such rejoinder.
A Panel is entitled to accept all reasonable allegations set forth in a complaint; however, it may deny relief where a complaint contains mere conclusory or unsubstantiated arguments. (See WIPO Overview of WIPO Panel Views on Selected UDRP Questions, Third Edition (“WIPO Jurisprudential Overview 3.0”). The relief that can be granted by a Panel is to order either cancellation or transfer of the disputed domain name from the Respondent to the complainant. If the complaint is denied for whatever reason, a Panel can order that the domain name remain with the disputed domain name holder.
It should be noted that the UDRP Policy is narrowly crafted to apply to a particular type of abusive registration, commonly called cybersquatting. Panels under the Policy are not a general domain name court, and the Policy is not designed to adjudicate all disputes of every kind that relate in any way to domain names (The Thread.com, LLC v. Jeffrey S. Poploff, WIPO Case No. D2000-1470). Business disputes are generally not considered to fall within the ambit of the Policy. Thus, in the recent case of Teknologian tutkimuskeskus VTT Oy, Olefy Technologies Oy v. Timo Sokka, Olefy Technologies WIPO Case No. D2022-4492, respondent registered the disputed domain names with the express permission, or at least at the express invitation of the first Complainant, and in the expectation that it was, or was about to be, a founder and shareholder in the enterprise to be incorporated in due course. Respondent claimed that it was merely holding the disputed domain names pending resolution of its dispute with first Complainant over its failure to allow it such participation. There was no evidence of any intent on the Respondent’s part to profit specifically from the registration of the disputed domain names or offering to sell them to the Complainant in an act of cybersquatting. The Panel thus reached the conclusion that the case was unsuitable for determination under the Policy, and the Complaint was denied.
The 3 Elements of a Domain Name Dispute Resolution Complaint
There are three elements that are required in a successful Complaint under the UDRP in terms of paragraph 4(a) of the Policy. Failure on the part of a complainant to demonstrate even one element of the Policy will result in failure of the complaint in its entirety. The three elements are, that: (i) the disputed domain name is identical or confusingly similar to a trademark or service mark in which the complainant has rights; (ii) the respondent has no rights or legitimate interests in respect of the disputed domain name; and (iii) the disputed domain name has been registered by the respondent and is being used by him in bad faith.
Post -COVID Uptick in Domain Name Dispute Resolution Cases
WIPO has recently reported a strong demand for its domain name dispute resolution services. In 2022 a record number of 5,764 cases were filed with the Center under the UDRP eclipsing the previous year by 12.4%. In total, the Center has administered over 60,000 cases under the UDRP and related policies. Together, these proceedings have involved parties from 185 countries and over 110,000 internet domain names.
Key Take -Aways
Domain names and trademarks are different, yet inextricably bound together and fundamentally important to your business.
In a post -pandemic world there has been a continued shift to online activity and increased internet presence with a marked increase in the numbers of people spending more and more time online. The effect of this phenomenon is that now, more than ever before, there is a compelling need for online trademark vigilance and monitoring of improper and unlawful use of your trademarks, and infringement violations on the internet, including domain name abuse. A good strategy for domain name protection is one that is usually in line with a good trademark strategy, and entails monitoring and securing your online presence across all digital platforms and digital channels on the internet: your website, mobile apps, peer to peer networks, online trading platforms & social media. It therefore makes good sense to ensure that both are centralized and aligned together to ensure the integrity of your IP and digital assets and that they are safeguarded and protected at all times.
The UDRP and URS are two efficient and cost-effective enforcement tools to protect your trademark-based domain name online from misappropriation through cybersquatting and other infringement actions and registrations in specific instances of domain name abuse. These procedures should play an instrumental and integral role in your legal toolbox for a successful brand enforcement program and strategy.
If any of your trademarks may be subjected to domain name abuse and you need assistance to file a domain name dispute resolution complaint to secure or enforce your digital brand, or need assistance in developing an enforcement strategy to safeguard your digital assets from all forms of infringement, violation and abuse, or where a trademark holder is challenging your domain name, please email Ivan Lipshitz at: Ivan.Lipshitz@jmbdavis.com or JMBmail@jmbdavis.com.