• Domain Name - UDRP Issues - Nonfinality
  • August 26, 2003 | Author: Michael A. Doctrow
  • Law Firm: McNees Wallace & Nurick LLC - Harrisburg Office
  • Federal courts have consistently held that trademark owners may resort to federal court proceedings under the Lanham Act, as expanded by the Anticybersquatting Consumer Protection Act, even after being unsuccessful in a proceeding under the new Uniform Dispute Resolution Procedures pertaining to domain names ("UDRP"). Therefore, trademark owners could take two bites of the apple when seeking to recover domain name.

    Now, in a case of first impression, the Court of Appeals for the First Circuit has held that domain name owners who lose their rights in UDRP proceedings may seek declaratory relief in federal court to recover their domain names. This case further highlights the non-final nature of UDRP decisions, but works against trademark owners.

    Clearly UDRP proceedings are of limited utility when serious trademark issues exist. Trademark and domain name owners can ignore UDRP decisions and proceed to court to resolve their disputes. Also, cybersquatters can now threaten to cause trademark owners to expend more significant funds to recover possession of infringing domain names, thus placing themselves in a better negotiating position when "selling" domain names.

    Bad Faith Requirement
    One of the most difficult aspects of UDRP procedures is that to obtain relief, trademark owners must establish bad faith on the part of the owners of infringing domain names. A recent UDRP decision by the WIPO Arbitration and Mediation Center may give trademark owners new ammunition in establishing bad faith and therefore recovering infringing domain names.

    The case was brought by the owner of United States registrations for JACK SPADE and KATE SPADE for handbags against the owner of jackspade.com. While the Website wasn't active, the owners claimed it would be an informational site.

    The panelist easily determined that the domain name was confusingly similar and that the domain owner had no legitimate rights to the domain.

    The panelist further found that the domain was adopted in bad faith because had the domain owner conducted a trademark search it would have had notice of the trademark owner's U.S. trademark applications. Based on its failure to conduct a search, the panelist imputed constructive notice of the trademark owner's prior rights to the domain name owner.

    While of no precedential value, panelists in other arbitrations may give deference to this decision, making it easier for trademark owners to establish bad faith in future UDRP proceedings.