Bras, Brothels and…Laches? The Wild World of Domain Name Disputes.

Steve Levy ⬥ 20 July

Last January, I wrote a post on this blog about the issue of laches in the Uniform Domain-Name Dispute-Resolution Policy (UDRP). Laches, for all the non-attorneys out there, is a legal doctrine that can provide a defense when a brand owner has unreasonably delayed in asserting its rights, and the defending party’s reliance on that delay results in harm to that party.

In most domain name disputes, both UDRP and others, Panelists have typically asserted that the laches defense doesn’t apply since the harm an infringing domain name inflicts on the brand owner is ongoing despite that brand owner’s delay in pursuing enforcement.

In what could be the first case of its kind, and a tectonic shift in this perspective for domain disputes, a WIPO Panelist denied an otherwise thorough and well thought-out claim against the owner of the domain based on the defense of laches. In this case, Victoria’s Secret, the ever-ubiquitous lingerie purveyor, sent a demand letter to the domain name owner, but then sat silent for seven years after the owner (now the Respondent) asked the company to provide evidence to support the claims made in its letter. It’s worth noting in this case that the domain name currently resolves to a website advertising “Sydney’s Finest Ladies & Escorts” in connection with a brothel service in Sydney, Australia.

In referring to the second element of the .AU dispute policy (which is very similar to the UDRP), the Panelist said he “believes that delay can, in exceptional circumstances, contribute to the Respondent acquiring through its subsequent bona fide use a right or legitimate interest in a domain name even though it had no such right or legitimate interest at an earlier time.”

Here, after the passage of seven years from the Respondent’s reply to Victoria’s Secret’s initial demand letter, the Complainant provided no further information nor did it initiate any legal action. As such, the “Respondent was entitled to conclude that the Complainant had ceased to press its allegations of trademark and trade practices infringement. From that time forward, it became possible for the Respondent to acquire a right or legitimate interest in the disputed domain name through subsequent use of it, so long as that subsequent use was bona fide.”

Taking a very fluid approach to the concept of bona fide use and legitimate interest, the Panelist found that “this continued use of the disputed domain name became bona fide use a reasonable period of time after the Complainant failed to take any further action against the Respondent, because the failure to press the allegations of infringement led the Respondent to understand that the Complainant no longer objected to the Respondent’s behavior.” In other words, use that was once considered improper became bona fide over time because Victoria’s Secret did not pursue additional action. The Panelist explained, however, that just as formerly improper use could become bona fide in this manner, it could again become improper if the Respondent started selling lingerie, fragrance or other products on its website which compete with the products of Victoria’s Secret.

While this seems to be a very rare exception to the view that laches don’t apply to domain disputes, it leaves the door open just a crack for future Panelists to find other circumstances where a long delay might bar an otherwise good claim. Brand owners must be prepared for this and aggressively pursue claims against infringing domains or risk being shut out of the dispute arena some years later. While this may not result in great harm to the brand in every case, it should be considered as part of a sound enforcement strategy.

Update, 8/16/12: Steve’s insights on this topic were featured in the World IP Review article, “Domain Arbitrator Lashes Brand Owner in Cybersquatting Row.” Read the full article here.

Tags: brand owner, domain name, enforcement, laches, Sydney Australia, UDRP, Uniform Domain-Name Dispute-Resolution Policy, Victoria’s Secret, WIPO, World IP Review

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