Reverse Domain Name Hijacking—No Escape (But Still No Teeth Either)
November 29, 2016
We hear all the time about cybersquatters acting in bad faith. In fact, this is at the very heart of UDRP Paragraph 4(a)(iii), which requires brand owners to prove that a disputed domain name “has been registered and is being used in bad faith.” But, what if it’s a UDRP complainant who’s acting in bad faith?
Paragraph 1 of the UDRP rules defines Reverse Domain Name Hijacking as “using the Policy in bad faith to attempt to deprive a registered domain-name holder of a domain name.” Further, Paragraph 15(e) of the rules further mentions that a UDRP panel can determine that a bad faith complaint “constitutes an abuse of the administrative proceeding.” What all of this means, according to the WIPO Overview 2.0, is that “the complainant in fact knew or clearly should have known at the time that it filed the complaint that it could not prove one of the essential elements required by the UDRP.” Such complaints may be groundless and brought for the purpose of harassing a domain owner.
Failed Purchase Negotiations Prompt A Reverse Domain Name Hijacking Complaint
A recent decision regarding the domain unmail.com illustrates this as well as any case possibly could and explores, in depth, both the standards for and the procedural issues surrounding a finding of Reverse Domain Name Hijacking. A company in India that provides financial technology services for banks and launched a new service using the UnMail brand filed a complaint against this domain. The company had first contacted the owner of the unmail.com name, a domain investor located in the United States, with a purchase offer, but the parties were not able to agree on a price. The complaint was then filed despite the fact that the domain was acquired quite some time before the creation of the complainant’s brand and there being a lack of any evidence that the respondent was targeting or was even aware of the UnMail brand. The respondent’s lawyer even wrote to the complainant warning that this was an unfounded case. Nevertheless, the complainant failed to withdraw the complaint and so the respondent submitted its response in which it set out a number of well-supported reasons that the complaint should be denied. It also requested that the panel issue a finding that the complainant had engaged in RDNH.
Upon receiving this response, the complainant submitted a request that the complaint be withdrawn and the case terminated due to a “business decision” it had made. However, the respondent did not consent to this and the matter was addressed in a procedural discussion in the UDRP panel’s written opinion. Rule 17 of the UDRP rules covers termination of cases and mostly discusses doing so when the parties have reached a settlement, but Rule 17(b) adds that a case may be terminated if “it becomes unnecessary or impossible to continue.” Here, the panel held that the complainant’s request to withdraw, based as it was on a business decision, did not create a situation where it is unnecessary or impossible to continue. Rather, it would be manifestly unfair to the respondent where it “has already been put to the time and trouble of answering the complaint by the time that the complainant has communicated its request for termination.” In essence, the respondent would be deprived of having its request forReverse Domain Name Hijackingheard and considered. This could violate Paragraph 10(b) of the UDRP rules, which requires that “the Panel shall ensure that the Parties are treated with equality and that each Party is given a fair opportunity to present its case.” The panel added that the effect of granting the complainant’s request here “would be to allow any complainant to avoid the only form of sanction which the UDRP policy provides for the making of a complaint in bad faith merely by applying for voluntary termination of the proceeding once it becomes aware that a response has been filed.”
The panel then went on to consider the three elements of UDRP Paragraph 4(a) and determined that the respondent had not acted in bad faith under 4(a)(iii). The reasons include the fact that the domain was acquired quite some time prior to the creation of the UnMail brand; the domain did not resolve to any content which could be said to target the complainant’s brand; and, although the unmail.com name appeared on the Sedo.com domain auction website, it was not configured within the respondent’s account.
A Complaint Too Far Leads to Reverse Domain Name Hijacking Finding
All of this seems almost preliminary to what I view as the panel’s true purpose in the unmail.com decision—roundly lambasting the complainant for pursuing such an ill-considered case in the first place, and then attempting to get off scot-free by seeking to withdraw the complaint. The panel set out no less than four independent grounds upon which to base its finding that complainant engaged in Reverse Domain Name Hijacking.
First, the complainant ought to have appreciated at the outset that its complaint could not succeed since the unmail.com domain had been created some considerable time before the complainant conceived and launched its UnMail brand. This eliminates any possibility that the complainant or its rights were being targeted by the respondent when the domain was first registered.
Second, it is not unreasonable for the panel to expect and require that the complainant and its counsel will be familiar with policy precedent. However, here the complainant entirely disregarded established UDRP precedent that a party may not rely on pending trademark applications in trying to prove its claim of trademark rights. Further, as noted above, the complainant delayed making any attempt to withdraw the complaint until after the respondent had been put to the time and expense of preparing its response. UDRP rules and precedent do not provide for such unilateral post-response withdrawal.
Third, the panel described this situation as “Plan B Reverse Domain Name Hijacking,” where the complaint was filed only after the failure of the complainant’s attempts to purchase the domain on an open market basis. Use of the UDRP policy to increase leverage in negotiations to purchase a domain name has been described as “a highly improper purpose” and contradicts the undertaking, required of all complainants, that “this complaint is not being presented for any improper purpose, such as to harass.”
Fourth, and finally, materials produced by the complainant to support the reputation of its UnMail brand were characterized by the panel as “grossly misleading.” In support of its claim to common law trademark rights, the complainant submitted materials arguing that they showed that the UnMail mark had been widely covered by popular media. However, a number of the articles referred only to “Octopus,” apparently the former name of the UnMail product.
So What Impact Does Reverse Domain Name Hijacking Really Have?
This decision contains one of the most extensive discussions of Reverse Domain Name Hijacking that I’ve seen in quite a while, but the question remains as to what impact this holding will have on the complainant and any future UDRP cases they may file. It also provides no solace to those who claim that, as “the only form of sanction which the Policy provides for the making of a complaint in bad faith,”
It remains a paper tiger with no tangible associated penalty. Having conducted my own research and also asked many others who are experienced in this niche area of trademark law, I am still not aware of a single decision in which a finding of Reverse Domain Name Hijacking against the complainant in a prior case has been cited, let alone has impacted such a decision.
This may change, however, depending on the recommendations to be made within the next year or two by ICANN’s Rights Protection Mechanisms Working Group as it explores whether the UDRP or its rules and procedures should be revised in any way. For now, I feel it’s likely that a complainant with a significant brand reputation to defend would likely bristle at a finding of Reverse Domain Name Hijacking. I would expect such a brand owner, and its counsel, to avoid such a predicament in the first place by exercising sufficient judgment in their UDRP filings.