By Steve Levy
The reality of the UDRP is that nearly 90% of cases involve no-show Respondents (a “default” case). This is for a number of reasons, the most prevalent of which is that most cases involve abusive domain names and cybersquatters usually consider UDRP losses to be a routine part of their business model. Less frequent, however, are Respondents who either don’t receive or disregard a notice of the UDRP case, or those who are intimidated or confused by the legal process and affirmatively decide not to participate in a case (for a suggested improvement of dispute notifications to domain owners, see Proposal No. 3 at https://UDRP.group). Regardless of the reason, the percentage remains high and a defaulting Respondent can have a significant impact on the outcome of many cases.
Typically, a Respondent default works in favor of a Complainant since no defense is presented and the UDRP panel is entitled to accept all reasonable allegations set forth in a complaint. This can be particularly helpful to brand owners where a Respondent’s intent is not quite clear from its website but there is a plausible case to be made for a lack of rights or legitimate interests and bad faith use of the disputed domain name. In one transfer decision, a panel expressed this by saying “[i]n cases such as this, where the domain name is being passively held and no Response has been filed, it is not always easy to determine whether the respondent registered and has been using the domain name with actual knowledge of the complainant and its rights in the mark.” Another panel said “We next observe that Complainant asserts, without objection from Respondent, that Respondent has made no effort to use the disputed domain name in connection with a bona fide offering of goods or services, but rather that the domain name resolves not to an active website, but, instead, to an error page.” It went on to find that “[a]bsent any evidence from Respondent which might support a conclusion that it has made even some demonstrable preparations for the use of the domain name in support of some legitimate undertaking, we must conclude that its passive holding of the domain name [does not support any rights or legitimate interests]”.
Less well recognized, however, are scenarios where a Respondent’s default can work against a Complainant and leave the panel with insufficient evidence to find a lack of rights or legitimate interests under 4(a)(ii) of the UDRP, or to find bad faith under paragraph 4(a)(iii). A recent example of this is a case against the domain name personalisationcreation.com based on the Complainant’s ownership of the trademark PERSONAL CREATIONS. Both parties are in the business of selling user-customizable gifts (ex. your baby’s or grandparent’s photo on a t-shirt, blanket, coffee mug, etc.) which certainly suggests that the Respondent is competing with the Complainant. However, the Complainant is based in the U.S.A. and the Respondent is in Ireland. This left open the question of whether the Respondent had actual knowledge of the Complainant’s trademark at the time that it registered the disputed domain name and whether it used the domain name to target the Complainant’s brand reputation. The fact that the Respondent defaulted left the panel to consider its website content standing alone. Particularly influential were product images and a personal statement indicating that this was an actual business – and not a scam – operated by a solo entrepreneur resulting in the panel being unable to conclude that the Respondent was not making a bona fide offering of goods or services under paragraph 4(c)(i) of the UDRP and, thus, that it had rights or legitimate interest in the domain name under paragraph 4(a)(ii). Bad faith was also uncertain given the geographic difference and apparent legitimacy of the Respondent’s business. The claim was ultimately denied as being outside the scope of the UDRP and better suited to a court which has more robust evidentiary tools such as discovery, witness testimony, cross-examination, etc. However, had the Respondent submitted a Response in the case, it very possibly could have said something that would have led the panel to find that it did, in fact, have prior knowledge of the Complainant’s trademark and that it targeted the mark to intentionally infringe on it or to otherwise unfairly compete with the Complainant (ex. “I admired the Complainant’s business and thought I could do something similar.”)
While the UDRP is usually not well-suited to edge cases, the reality of frequent Respondent defaults can, in some cases, be a risk factor for brand owners to consider when deciding whether to pursue a complaint. Of course, there can be so many other factors and so getting an early case assessment from an experienced UDRP expert can mean the difference between a win and the waste of a few thousand dollars in a brand owner’s precious trademark enforcement budget.