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Rick Schwartz to Make Poster Boys of the Chavez Brothers for Hijacking Domains 

  • Jun 16, 2012
  • Howard Neu
  • Comments Off on SAVEME.COM WINS REVERSE DOMAIN HIJACKING DECISION AT WIPO
  • Legal
  • 4355 Views

I have the distinct privilege of calling Rick Schwartz my partner, and more importantly, my friend. We have been through a lot of legal mumbo-jumbo before on UDRP cases, most of which we won. But the SaveMe.com case was a landmark decision that I hope will be followed by other panels at both WIPO and NAF.

Though under UDRP there is no such thing as STARE DECISUS, where one case sets the precedent that MUST be followed by future cases with the same or similar facts, I truly believe that this decision will be cited frequently by Domain Investors who have been wrongfully attacked by ersatz trademark Complainants who use the arbitration process to STEAL domain names from their rightful owners.

Here is the decision:

The Complainant relies, first, on a pending trade mark application in Brazil.

Paragraph 4(a)(i) of the Policy requires a complainant to establish the existence of a trade mark or service mark in which the complainant has rights.

The Complainant argues that, once a Brazilian trade mark application has been filed, the applicant has a right under Brazilian law to “protect a trade mark’s reputation”. The Complainant invokes Article 130 of the Brazilian Industrial Property Act (Statute no. 9.279), which states: “To the trade mark owner or the depositor is also guaranteed the right to … (III) ensure its material integrity or reputation.”

However, the member of this Panel who is qualified to practice law in Brazil observes that, according to Article 129 of the Brazilian Industrial Property Act (Statute No. 9.279/96), ownership of a trade mark is acquired by a registration validly granted. While Article 130(III) does guarantee the right to trade mark applicants to safeguard its “material integrity or reputation”, this does not warrant its exclusive use throughout national territory, which can only be achieved by means of the proper registration.

Accordingly, the Panel declines to find that the Complainant’s Brazilian trade mark application of itself is sufficient to generate trade mark rights under the Policy.

The Complainant also relies on unregistered trade mark rights in the term “Save Me”.

Paragraph 1.7 of the WIPO Overview of WIPO Panel Views on Selected UDRP Questions, Second Edition (“WIPO Overview 2.0″) sets out the consensus view as to what a complainant needs to show in order to successfully assert unregistered trade mark rights:

“The complainant must show that the name has become a distinctive identifier associated with the complainant or its goods or services. Relevant evidence of such “secondary meaning” includes length and amount of sales under the trademark, the nature and extent of advertising, consumer surveys and media recognition… For a number of reasons, including the nature of the Internet, the availability of trademark-like protection under passing-off laws, and considerations of parity, unregistered rights can arise for the purposes of the UDRP even when the complainant is based in a civil law jurisdiction. However, a conclusory allegation of common law or unregistered rights (even if undisputed) would not normally suffice; specific assertions of relevant use of the claimed mark supported by evidence as appropriate would be required. Some panels have also noted that in cases involving claimed common law or unregistered trademarks that are comprised of descriptive or dictionary words, and therefore not inherently distinctive, there may be a greater onus on the complainant to present compelling evidence of secondary meaning or distinctiveness. Some panels have noted that the more obvious the viability of a complainant’s claim to common law or unregistered trademark rights, the less onus there tends to be on that complainant to present the panel with extensive supporting evidence. However, unless such status is objectively clear, panels will be unlikely to take bald claims of trademark fame for granted.”

Here, the claimed unregistered trade mark consists of descriptive words and is not inherently distinctive. It therefore falls into that category of cases where there is a greater onus on a complainant to present compelling evidence of secondary meaning or distinctiveness. Yet the Complainant supplies little evidence in support of its claims as to unregistered rights.

Apart from printouts of the Complainant’s website at “www.saveme.com.br” and proof of ownership of “saveme” country code top-level domains in other Latin American countries, none of which cast much light on the extent of recognition of its name, there is only a January 2012 Alexa.com printout showing that the Complainant’s site has a traffic rank of 4,275 worldwide and 103 in Brazil.

While, on the face of it, these do appear to be high rankings indicative of substantial traffic volume, one cannot be sure as this is a purely comparative measure. The Complainant asserts that its “Save Me” service has achieved “wide prestige” amongst Brazilian Internet users “with some hundreds of thousands of monthly visits”. It would surely have been a straightforward matter for the Complainant to produce website analytics screenshots backing up this claim, yet it has not done so. Nor is there any other information of the kind one might expect to see in support of a claim as to unregistered rights – such as proof of revenue, sales figures, advertisements and media coverage generated by reference to the name “Save Me”.

In the Panel’s view, the few documents provided by the Complainant fall short of the “compelling” evidence required to establish rights in the descriptive name at issue in this case.

The Panel therefore finds that the Complainant has not established the first element of paragraph 4(a) of the Policy. Even had the Complainant succeeded under this head, however, it would in any case have failed for the reasons stated below.

B. Rights or Legitimate Interests

The Panel does not propose to address this aspect in view of its findings in relation to “bad faith” below.

C. Registered and Used in Bad Faith

There is a fatal flaw in the Complainant’s case, namely that the Respondent registered the disputed domain name in 1996, some 14 years before the Complainant started trading in 2010, and could not therefore have registered the disputed domain name in bad faith.

Paragraph 4(a)(iii) of the Policy requires the Complainant to establish that the disputed domain name has been registered and is being used in bad faith.

The Complainant invokes various uses by the Respondent of the website at the disputed domain name since 2010 including for pornography and for pay-per-click links allegedly designed to capitalise on the Complainant’s reputation. However, there is no need for the Panel to address any of these issues because, even if the Complainant establishes that the Respondent later used the disputed domain name in bad faith, and no matter how reprehensible such activities might be (as to which the Panel expresses no view), the Respondent still cannot show that the disputed domain name was registered in bad faith.

Paragraph 3.1 of WIPO Overview 2.0 states the following consensus view:

“Generally speaking, although a trademark can form a basis for a UDRP action under the first element irrespective of its date …, when a domain name is registered by the respondent before the complainant’s relied-upon trademark right is shown to have been first established (whether on a registered or unregistered basis), the registration of the domain name would not have been in bad faith because the registrant could not have contemplated the complainant’s then non-existent right.”

It is true that the consensus view that the Policy requires bad faith at the time of registration of the domain name has been challenged in some recent UDRP decisions, including City Views Limited v. Moniker Privacy Services / Xander, Jeduyu, ALGEBRALIVE; WIPO Case No. D2009-0643 (“Mummygold”) and Octogen Pharmacal Company, Inc. v. Domains By Proxy, Inc. / Rich Sanders and Octogen e-Solutions, WIPO Case No. D2009-0786 (“Octogen”).

The Complainant relies on Octogen and also quotes the following from Paragraph 3.1 of WIPO Overview 2.0:

“Irrespective of whether the domain name was registered before the relevant trademark was registered or acquired, a small number of panels have begun to consider the effect of the requirement of paragraph 2 of the UDRP, which states: “By applying to register a domain name, or by asking us to maintain or renew a domain name registration, you hereby represent and warrant to us that . . . (d) you will not knowingly use the domain name in violation of any applicable laws or regulations. It is your responsibility to determine whether your domain name registration infringes or violates someone else’s rights.” Some panels have regarded this as a warranty at the time of registration that the domain name will not be used in bad faith, finding that, by breaching such warranty, use in bad faith may render the registration in bad faith. Other panels have looked at the totality of the circumstances in assessing “registration and use in bad faith,” as a unitary concept, given that some of the circumstances listed as evidence of bad faith registration and use in paragraph 4(b) of the UDRP appear to discuss only use and not registration.”

The Complainant omits the final two sentences from this paragraph, which state:

“Still other panels that have considered these approaches have instead reaffirmed the “literal” interpretation of bad faith registration and bad faith use regardless of paragraphs 2 or 4(b) of the UDRP. This is a developing area of UDRP jurisprudence.”

In Mile, Inc. v. Michael Burg, WIPO Case No D2010-2011 (“Mile”), the panel observed that “[T]he consensus view since the Policy was implemented in 1999 has been that the conjunctive “and” indicates that there must be bad faith both at the time of registration and subsequently”.

In the Mile case, the panel considered numerous decisions rendered after the Mummygold/Octogen cases and concluded as follows:
“If a consensus developed that a line of prior decisions had reached the wrong result, and if panels generally adopted a new approach on an issue, this Panel also would be open to considering whether a new approach was appropriate, both substantively under the Policy and in order to promote consistency. However, the Mummygold/Octogen reasoning has not prompted any such consensus; to the contrary, a number of decisions have expressly considered and rejected it. See, e.g., Validas, supra; Eastman Sporto, supra; Torus Insurance Holdings Limited v. Torus Computer Resources, WIPO Case No. D2009-1455; Camon S.p.A. v. Intelli-Pet, LLC; WIPO Case No. D2009-1716; Tata Communications International Pte Ltd (f/k/a VSNL International Pte Ltd) v. Portmedia Inc. / TRUEROOTS.COM c/o Nameview Inc. Whois; WIPO Case No. D2010-0217 (majority opinion); Burn World-Wide, Ltd. d/b/a BGT Partners v. Banta Global Turnkey Ltd; WIPO Case No. D2010-0470; A. Nattermann & Cie. GmbH and Sanofi-aventis v. Watson Pharmaceuticals, Inc.; WIPO Case No. D2010-0800 (majority opinion). The fact that so many panelists have declined to follow the Mummygold/Octogen approach argues against an emerging consensus to overturn a long-established doctrine and provides yet another reason for this Panel to decline to adopt the Mummygold/Octogen reasoning.”

This Panel respectfully adds its voice to those who decline to follow the Mummygold/Octogen approach and sees no reason to depart from the long-held and consistent view of UDRP panels (with the concomitant benefit of clarity and certainty for parties to UDRP cases) that paragraph 4(a)(iii) means what it appears to say, namely that the conjunctive “and” indicates that there must be bad faith both at the time of registration and subsequently.

The Panel therefore finds that the Complainant has failed to establish the third element of paragraph 4(a) of the Policy.

Accordingly, there is no need for the Panel to consider the other issues raised by the Complainant concerning bad faith including the alleged pattern of UDRP bad faith findings against Mr. Schwarz and also the price sought by the Respondent to sell the disputed domain name following the Complainant’s approach. None of this can retrospectively alter the lack of bad faith at the time of registration of the disputed domain name. The Complainant’s remedy, if there is one, arising from its many grievances against the Respondent must lie in the courts.

D. Reverse Domain Name Hijacking

Paragraph 15(e) of the Rules provides that “if after considering the submissions the Panel finds that the complaint was brought in bad faith, for example in an attempt at Reverse Domain Name Hijacking …. the Panel shall declare in its decision that the complaint was brought in bad faith and constitutes an abuse of the administrative proceeding.” Reverse Domain Name Hijacking (“RDNH”) is defined in paragraph 1 of the Rules as “using the Policy in bad faith to attempt to deprive a registered domain-name holder of a domain name.”

A number of UDRP cases have considered the principles of RDNH. For example, the panel in Yell Limited v. Ultimate Search, WIPO Case No. D2005-0091 noted that whether a complainant should have appreciated at the outset that its complaint could not succeed will often be an important consideration.

In Prime Pictures LLC v. DigiMedia.com L.P., WIPO Case No. D2010-1877, the panel made a finding of RDNH in circumstances where, as here, the complaint failed because the relevant rights post-dated the domain name in issue. The panel considered it unlikely that the deficiency was overlooked by the complainant’s counsel and, more probably, that it was deliberately ignored in framing the Complaint.

In this case, the Panel is satisfied that the Complainant’s representatives were well aware of the importance of the chronological issue. The Complainant’s representatives are evidently familiar with the UDRP and both the Complaint and Amended Complaint make extensive reference to previous UDRP decisions. Yet the version of the Complaint originally filed simply ignored the issue of registration in bad faith, labelling the third factor as “Bad Faith In the Domain Name Use”. This must have involved deleting the reference to registration in bad faith from WIPO’s complaint template. After the Centre drew attention to this deficiency, the Complainant filed the Amended Complaint which belatedly addressed the issue of bad faith registration and, for the first time, invoked Octogen, seemingly as an afterthought.

Furthermore, the Complainant even predicted in the Amended Complaint that the Respondent would make an allegation of RDNH and so the Complainant clearly knew that it was skating on very thin ice.

The Complainant argued that RDNH cannot arise because the Complainant has merely sought cancellation of the disputed domain name, not transfer. The Panel disagrees. First, complainants should not be allowed to file cases known to be fatally flawed without the possibility of a finding of RDNH against them, by simply fine tuning the remedy sought. Second, as mentioned above, RDNH is defined as use of the Policy in bad faith “to attempt to deprive” a registrant of a domain name. If the Panel had ordered cancellation, the disputed domain name would in due course return to the domain pool where it would no doubt be subject to the attentions of the Complainant and others, with only a possibility that the Respondent itself might ultimately re-register it (assuming the Respondent sought to do so). Accordingly, the Complainant’s request for cancellation is no less an attempt to deprive the Respondent of the disputed domain name than a request for transfer would have been.

For the above reasons, the Panel finds that there has been RDNH in this case.
7. Decision

For all the foregoing reasons, the Complaint is denied and the Panel declares that it was brought in bad faith and constitutes an abuse of this proceeding.”

I wish to personally thank the following panelists who saw through the chicanery and provided a thorough analysis of what was really taking place here

Adam Taylor
Presiding Panelist

Rodrigo Azevedo
Panelist

The Hon Neil Brown Q.C.
Panelist

Thanks for “listening”

Howard

 

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