Not a Time for a Chill Pill

Steve Levy ⬥ September 9

While some companies can pursue UDRPs more sparingly, pharmaceutical companies generally have to be more aggressive in reclaim efforts. After all, even if a domain name does not receive much traffic, the potential harm associated with counterfeit drug sales or misleading information can be significant.

Proof of bad faith, at least, is often easy for a Complainant to prove. This was the case for a UDRP complaint filed by the pharmaceutical company F. Hoffmann-La Roche against Respondent over the domain name, which recently resulted in success for Roche.

In this complaint, the sole panelist found that indeed, the root of the domain, “Valiums” was confusingly similar to Roche’s VALIUM trademark, and that the Respondent did not appear to have any legitimate rights or interests for registering the domain name. Furthermore, screen shots of the website that the Respondent hosted on showed “commercial activity in the area of pharmaceutical products, which is the core business for which the Complainant has and uses the mark VALIUM.” The panelist found in favor of Roche, ordering the transfer of the domain.

The Respondent made it particularly easy for the panelist – the Respondent did not submit any defense as is often the case with habitual cybersquatters.

This highlights a serious issue with the UDRP as a tool against cybersquatting – it’s not necessarily the best deterrent against the practice. While brand owners spend time and money to pursue cybersquatted domain names, Respondents can easily just default without wasting any resources to address the complaint. It’s a pretty great situation for the cybersquatter; there’s no slap on the wrist, brand owners are left holding the bill, and the cybersquatter can just snap up another infringing domain name to replace the one they’ve lost. Many times, cybersquatters can even remain anonymous throughout the whole proceeding, further minimizing risk.

This unfortunately leaves brand owners fighting an uphill battle – especially pharmaceutical companies like Roche.  Court litigation is the only alternative, but most judges are reluctant to order squatters to pay any significant damages. Although distasteful to some, one solution might be to offer the squatter a nominal sum of money in exchange for a settlement agreement permanently banning it from future use of the brand. A future claim for breach of contract would have a higher likelihood of a significant damages award and might be a better deterrent.

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