Sometimes Doing Nothing Means Everything

Steve Levy ⬥ 24 November

I’ve won many UDRP cases where the disputed domain name fails to resolve to any website or other content. This is often called “passive holding” and it can give visitors who type in that domain the wrong impression that a brand owner has either gone out of business or has at least failed to give sufficient attention to the online component of its marketing efforts.

In the recent case of Chevron Intellectual Property LLC v. Ancelet Dept / Ancelet, NAF Claim No. FA 1582869 (2014) the Respondent registered 16 domains that incorporate the famous CHEVRON fuel trademarks such as <> and <>. Upon receiving the complaint the Respondent replied that he runs a small business that generates leads for affiliate networks through e-mails. He also mentioned that the disputed domains were created automatically by software that chooses domains that may be related to a particular campaign.  None of the domains resolve to a website or any other content.

In its decision, the Panel addressed each of the three UDRP component in-turn. However, what I found to be the most interesting comment on confusing similarity was tucked into the discussion of bad faith.  The Panel said “the more distinctive the earlier mark the greater would be the likelihood of confusion.”  This is basic trademark law but its appearance in a UDRP decision should give the owners of famous and distinctive brands reassurance that their strong trademarks will be protected against cybersquatted domains.

Next, the issue of whether the Respondent had any rights or legitimate interest in the domains was discussed.  This is where the passive holding line of attack came into play.  In relation to the Respondent’s non-resolving domain names, the Panel held that “the inactive holding of Internet domain names did not create a viable right or legitimate interest of a domain name because it constituted neither a bona fide offering of goods or services, nor a legitimate noncommercial or fair use”

Finally, in relation to the third component of the UDRP, the Panel noted that a domain owner’s expressed intention to seek affiliate revenue or set up pay-per-click sites “may be a legitimate commercial business and is not, in itself, evidence of bad faith.”  However, she went back to the passive holding argument and found that the “Respondent’s failure to develop a website does not bar a finding of bad faith because by failing to use the domain names in a reasonable time Respondent’s registration of confusingly similar domain names can be construed as having been in bad faith with an intent to sit on and avoid using those domain names in bad faith.”  She then cited a case in which non-use of a domain for a period of three months was held to be sufficient to prove bad faith.  Support of this specific time-frame should prove useful and I plan to cite this decision in future complaints.

The end result is that all sixteen domains were ordered to be transferred to the Complainant. The Respondent was then left with a lesson on why the unsupervised use of automated software to register non-resolving domains that infringe on famous trademarks can be a costly mistake and is no way to run a small business.

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