imgres-2-150x150On September 3, 2012, a World Intellectual Property Organization (“WIPO”) Administrative Panel rendered a decision in a Uniform Dispute Resolution Policy (“UDRP”) matter entitled Youi Pty Ltd. v. Xedoc Holding SA. The decision came down in favor of Respondent Xedoc Holding SA (“Respondent”), an entity with a proven cybersquatting track record, on the grounds that Youi Pty Ltd. (“Complainant”) failed to present sufficient evidence of the Respondent’s bad faith in registering the domain http://www.youi.com. The case is instructive because the Panel did not, as so many others tend to do, simply look at the Respondent’s track record and find for the Complainant, and instead wanted affirmative evidence of actual knowledge – which is often difficult for a complainant to provide.

Background

Complainant is an Australian insurance provider that obtained Australian trademark rights in the mark YOUI in May 2008, and at the time of the dispute was the owner of more than 25 domain names containing variations on the YOUI mark. Respondent, a Luxembourg entity and an aggregator of domain names, obtained the www.YOUI.com registration in January 2009. As the dissenting opinion notes, Respondent has been involved in a number of prior UDRP disputes, the result of frequent cybersquatting activities. Notwithstanding Respondent’s past practices, the Panel found that Complainant failed to show that Respondent acquired the http://www.youi.com domain in bad faith.

Under paragraph 4(a) of the UDRP, a complainant must show:

(i) the domain name is identical or confusingly similar to the Complainant’s trade mark; and

(ii) the Respondent has no rights or legitimate interests in respect of the domain name; and

(iii) the domain name has been registered and is being used in bad faith.

Here, the Panel found that Complainant satisfied the first factor but, ignoring the second factor as moot, went on to note that the Complainant had failed to prove that the third factor had been satisfied.

The Decision

In finding an absence of bad faith, Panel first noted the four scenarios in which bad faith is typically found. Those scenarios include situations where the entity acquired the domain in order to resell it to the complainant, prevent the complainant from registering a similar domain, disrupt the complainant’s business, or to bring traffic to its own site by creating a likelihood of confusion with the complainant.

The Panel went on to find that “the Complainant has not provided sufficient evidence with regards to the Respondent’s actual knowledge of the Complainant and its trademark rights at the moment of time the Respondent acquired the disputed domain name.”

Though Complainant might have succeeded on a theory of willful blindness, the Panel found that Complainant left out crucial evidence relating to “the actual scope of its business and the awareness of the public regarding the YOUI Mark on or around the time of the acquisition of the disputed domain name by the Respondent in January 2009 (e.g. number of customers, business volume, spendings on advertising other than Google, if any, actual traffic numbers, number of requests for quotes per months).” Without such evidence, the Panel found itself forced to consider that “Respondent may not necessarily have been aware of the Complainant.”

The Dissent

In disagreeing with the Panel’s decision, the dissenting panelist urged that requiring a complainant to show evidence of actual knowledge of the complainant and its trademark rights was too burdensome, especially given that “a complainant has little or no opportunity to obtain evidence routinely available in civil litigation but ordinarily within the control of the respondent. For this reason bad faith may be proven inferentially.”

The dissenting panelist noted that Respondent had been involved in many such disputes before, was a competent business entity, and was more than likely to have conducted the relevant internet searches in order to discover the Complainant’s existence. Thus, the Dissent suggested that Complainant’s ability to show that Respondent engaged in “willful blindness” was sufficient to satisfy the third prong of the UDRP paragraph 4(a) test.

The dissenting panelist rejected the Panel’s use of the geographic distance between Complainant and Respondent (i.e., between Australia and Luxembourg) as a rationale for Respondent’s ignorance of Complainant’s existence, noting that a company can certainly be incorporated in one place, but actually present in another, and can conduct the necessary internet searches regardless of location.

Implications

The decision is instructive insofar as it confirms that simply pointing to a Respondent’s past practices of cybersquatting will not be enough to succeed in UDRP proceedings. Rather, a Panel may be compelled to ignore a cybersquatter’s track record, and focus solely on the record presented. This itself might be viewed as willful blindness on the part of the Panel, and trademark holders will have to go further; arguments based on “once a cybersquatter, always a cybersquatter” reasoning will not suffice.

Also a crucial takeaway from the decision is the sort of evidence that must be presented when bringing a UDRP case. As the Panel noted, the Complainant’s failure to produce evidence relating to the scope of the business and the public awareness of the mark or brand at the time of the Respondent’s acquisition of the domain proved fatal to the Complainant’s case. Trademark holders seeking to protect their brands will need to muster such evidence if they hope to show that Respondent had to have known exactly whose goodwill it was misappropriating.

In fact, the decision might be read to altogether limit the mark holder’s ability to bring a successful case on a willful blindness theory and instead requires that the complainant prove a respondent’s actual knowledge of the complainant’s brand, and the scope of complainant’s business except in the most limited of circumstances...