National Arbitration Forum Issues Two Internet Domain Name Decisions of Interest

National Arbitration Forum Issues Two Internet Domain Name Decisions of Interest

by Jerry Glover
August 15, 2012

The National Arbitration Forum (NAF), located in Minneapolis, Minn., serves as one of several international arbitration sites for domain name disputes under the domain name policies established by the United Nations agency, the World Intellectual Property Organization, and ICANN.  The NAF recently decided two cases of interest to practitioners that serve as a warning to trademark and alleged trademark owners.

The ICANN’s Uniform Domain Name Dispute Resolution Policy (the “Policy”), Paragraph 4(a), requires the Complainant in a domain name dispute to prove each of the following three things:

(1) The domain name registered by Respondent is identical or confusingly similar to a trademark or service mark in which the Complainant has rights;

(2) Respondent has no rights or legitimate interests in respect of the domain name; and

(3) The domain name has been registered and is being used in bad faith.

In both of the following decisions, the arbitration panels looked at matters outside of these requirements to reach a decision.  In both cases, the complainants lost.

Jack Abramoff v. DCCC , FA1441731 (Nat. Arb. Forum July 27, 2012):

Jack Abramoff, a former Washington, DC lobbyist, was convicted in 2006 of corruption in a case involving his lobbying on behalf of an American Indian tribe and a tribal casino.  He served 43 months in prison before being released.  In 2011 he published a book about himself and claims to have reformed.

Abramoff filed a complaint with NAF on April 30, 2012 alleging Respondent had registered the domain name on July 6, 2006 in violation of the Policy.  The domain name owner claimed it was using the domain name for the non-commercial purpose of raising money for political candidates who are members of the Democratic Party.

The NAF panel deciding this dispute first looked at the policy’s requirement that Abramoff has rights in and to his name as a trademark even if the domain name is exactly the same as the name of the Complainant.  The panel noted that fame, by itself, is not enough to establish trademark rights in a person’s name.  That person must have used his/her name “in commerce” for commercial purposes on particular goods or services. Abramoff had not done that until several years after 2006, the domain name registration date, when he was released from prison, wrote the book and began accepting speaking engagements.  Therefore, his name at the time of the domain registration was not being used as a trademark or service mark.

The panel went one step further, however, and noted that Abramoff was in fact “infamous.”  Citing a little used principle of American trademark law, the panel noted that use in commerce only creates trademark rights with that use is lawful.  Otherwise, as the panel noted, the government would be awarding a trademark registration to an individual/entity who is violating governmental laws.  This doctrine is known as the unlawful use defense and is similar to the well-known laches or unclean hands defense.

The unclean hands defense is used when a trademark owner/plaintiff requests an equitable remedy (e.g., injunction).  That plaintiff must come to court with “clean hands”, that is, if the defendant proves that the plaintiff has made any public misrepresentation about the trademark then relief to the plaintiff will be denied.  See Shondel v. McDermott, 775 F.2d 859 (7th Cir. 1985) and Worden v. California Fig Syrup Co., 1878 U.S. 516 (1903).

The panel held that even if Abramoff could have established trademark rights in his name he would still be denied relief because those rights would have been established as a result of “substantial” illegal activity.  The unlawful use defense prohibited Abramoff from asserting trademark rights in his name.

The panel could have stopped there.  But “to satisfy the parties” the panel reviewed the other two elements of the Policy.

The panel found that the domain name owner had rights or legitimate interests in the domain name because the owner was making a non-commercial or fair use of the name through the web site in connection with political speech.  The panel also noted that the respondent was using the domain name to keep the public aware of Abramoff’s association with public scandal.

The panel turned to the third policy:  bad faith registration AND bad faith use.  The panel noted that the domain name owner had never attempted to sell the domain name to Abramoff and was not a competitor of Abramoff’s since at the time of registration, 2006, Abramoff had not commercial enterprise to compete against..  Finally, the domain name owner was not using the domain name to divert Internet users for commercial gains adding that the funds received from the sale of books on respondent’s web site were used to fund Democratic political candidates and did not go into respondent’s pockets.

The panel refused to transfer the domain name to Abramoff.

Craigslist, Inc. v. Craig Solomon Online Services, FA1445057 (Nat. Arb. Forum August 10, 2012):

In this dispute, the well-known Craigslist filed a claim against respondent for registering and using the domain name  Craigslist argued that respondent was guilty of “typosquatting”—using the Complainant’s trademark but adding one or more misspellings (in this case, adding an “s” to “list”).  That typosquatting, Craigslist argued, showed Respondent’s bad faith use of the trademark in violation of the Policy.

Craigslist provides online ad placement services for local communities who post their own ads for job openings, places to rent, houses to buy, merchandise for sale, personal dating, etc.   Craigslist claimed that its name was recognized globally.  The Respondent claimed its business activities were very different from Craigslist’s.  The Respondent claimed its web site provided visitors with lists of resources from companies that do business with residents of the Cayman Islands and elsewhere and redirects users to those companies.  The Respondent added that its website’s content did not compete with the content on Craigslist.  The Respondent also argued that Craigslist was not a commercial enterprise which Respondent could have disrupted.

The NAF panel ruled that the Respondent had not registered and used the trademark in bad faith since the two parties had distinctly different businesses.  Where the businesses did not compete, the Respondent could not be found guilty of typosquatting since a successful use of that argument usually involves companies that directly compete with each other.

But, significantly, the panel also reviewed Respondent’s argument that Craigslist was guilty of laches by waiting too long to file its complaint with NAF.  The Respondent registered in 2003.  Craigslist did not file its complaint until May 21, 2012.  Laches is an equitable defense that applies when a plaintiff delays, without excuse, to assert its claims.  That delay unduly prejudices or harms defendant.

There has been some disagreement among NAF/WIPO panels over whether laches, an American equitable doctrine, should apply in domain name disputes.  The Policy says nothing about laches and, therefore, some panels have held that the doctrine has no place in the resolution of these disputes.  More recently, however, several NAF and WIPO panels have not only recognized the doctrine but also applied it to prevent the domain name owner from succeeding in its domain name claim.

The Craigslist panel noted that NAF panels had recently concluded that laches was a valid defense in an appropriate case.  See The New York Times Company v. Name Administration Inc., FA 1349045 (Nat. Arb. Forum November 17, 2010) and Professional Rodeo Cowboys Association, Inc. v. Alternative Advertising Concepts, Inc./Kenneth Forman, FA 1440736 (Nat. Arb. Forum June 26, 2012).  These panels have noted that delay in bringing a complaint will often make it difficult for a complainant to establish that the respondent lacked rights and legitimate interests and that the respondent registered and used the domain name in bad faith.  Other panels have noted that even though laches is not a defense under the Policy the absence of complaints from the trademark owner shows there must not be a serious problem.

Laches has not been used in domain name disputes since those disputes are considered administrative hearings that do not offer equitable relief like laches.  But other panels have characterized domain dispute resolutions as equitable in nature offering equitable remedies (cancellation or transfer of a domain name).  One recent panel noted that laches should be recognized where the trademark owner was sophisticated, had been in business for a substantial period of time and had registered several trademarks and domain names and then failed to pursue a domain name infringer without excuse or explanation while the trademark owner built a business.  See Novak v. Marchex Sales, Inc./Hight, FA 1418478 (Nat. Arb. Forum March 1, 2012).

The Craigslist panel concluded that Respondent’s laches defense should be recognized since Craigslist offered no explanation for its delay in filing the complaint noting that a company seeking protection of a trademark must be diligent in its policing efforts.

The take away from these panel decisions is pretty simple:  Trademark owners (both registered trademark owners and owners of common law trademark rights including famous individuals who have used their names as part of commercial pursuits) must be diligent in policing the domain name data bases available on line to find registrations of domain names that are identical or confusingly similar to the owners’ trademark.  An owner’s failure to be diligent may result in a dismissal of a domain name dispute if the owner has waited a number of years following the registration of a domain name to complain.

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