By Steve Levy
I only started handling UDRP cases after a couple of decades of dealing with other trademark disputes through a combination of demand letters and litigation. Like many brand enforcement lawyers, I would sometimes use the threat of litigation as leverage when trying to nudge the opposing party towards a settlement of the dispute. This often worked because litigation is usually terribly expensive for both sides and it’s a lengthy process full of uncertainty which can veer off into all sorts of tangents from things like discovery, motion practice, and the like.
However, UDRP cases are rather different and I’ve had to adjust my thinking on enforcement accordingly. The process is very narrowly defined and limited in scope, the case lasts 3 months at the most, and there’s no discovery, motion practice, or similar issues to create cost uncertainty. Most of all, there’s no requirement for a domain owner to be represented by legal counsel and so they can defend the case at zero cost if they do it themselves (many do so successfully).
It’s against this backdrop that the HDFC Bank Limited, in India, retained a law firm to pursue enforcement action against the domain name hdfcmutualfund.com which resolved to a pay-per-click website. The domain name was first registered in 2003 and the Respondent, a rather sophisticated domain investor who had successfully defended a number of prior UDRP cases against it, said that it’s not sure how the domain name ended up in its portfolio. The parties engaged in correspondence before the UDRP complaint was filed and the Respondent offered an unconditional transfer of the domain name to the Complainant. It even “apologized and expressed its embarrassment and perplexity at being named as the holder of the disputed domain name.” However, for reasons that are not discussed in the decision, negotiations between the parties broke down. One can only speculate that the Complainant, or its counsel, sought something more than a transfer of the domain – perhaps payment of damages or legal fees, or written assurances that the Respondent owned no other domain names that are confusingly similar to the HDFC trademark? Whatever it was, the Respondent only submitted a “Stipulation to Transfer” whereby it requested that the panel transfer the disputed domain name without considering the merits of the dispute under the UDRP. For its part, the Complainant requested a full decision on the merits, perhaps in an effort to create a black mark against the Respondent as leverage in its unsuccessful settlement negotiations?
In considering these requests, the three-member panel said that, “[a]fter careful consideration, and detailed deliberations, the Panel has unanimously decided to exercise its discretion not to provide a merits-based review in this somewhat exceptional case. It is clear to the Panel that both Parties want the disputed domain name to be transferred. This is the remedy that the Complainant seeks, and it is what the Respondent offers.” It noted that “the case came very close to settling but that the sticking point was that, in addition to a transfer of the disputed domain name, the Complainant sought a number of undertakings from the Respondent in respect of matters that are beyond the scope of the Policy.” Finally, it said that “the question of whether [the panel] will proceed, or not proceed, to a decision on the merits should not be viewed as a lever to be deployed by either party in settlement negotiations, this being a matter exclusively for the Panel’s discretion depending upon the circumstances of each individual case.”
While there may be times that seeking additional remedies is an appropriate step for brand owners (ex., the domain owner is intentionally negotiating the settlement in bad faith), the practical reality is that the UDRP is a very limited process with little downside for respondents other than having their domain name transferred. So, apart from the registrant being named as the losing party in a published UDRP decision, brand owners rarely have much leverage to push hard for any relief beyond a transfer. If the situation involves extreme harm to the brand or the company, then perhaps the better approach is to file the UDRP case first and then take the domain owner to court separately to seek other remedies.