Limitations of the concept of ‘constructive notice’ in the UDRP

May 21, 2021, 13:30 PM

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This article was first published in the World Trademark Review magazine on 8 April 2021.

The notion of ‘constructive notice’ comes from US trademark law and is found under Paragraph 1072 of the Lanham Act, 15 USCA. Under US law, registration of a trademark on the USPTO principal register is constructive notice of the registrant’s claim of ownership. When a claimant relies on this concept, a defendant cannot claim that it did not know of the mark as a defence.

The concept of constructive notice has been discussed in several UDRP decisions in the past. In the early years, UDRP decisions tended to recognise actual or constructive knowledge of the complainant’s rights in a trademark as a factor in supporting bad faith. These early decisions and the WIPO Overview 3.0 have set the limits as to when a complainant can apply the concept of constructive notice.

Misapplication of constructive notice

Constructive notice in the UDRP is never absolute and depends on the circumstances of each case. As a consensus, panels have not recognised this concept as a sole factor to support bad-faith registration.

In a Forum UDRP decision (Case No 1931567) on 15 March 2021, the panel once again discussed the concept of constructive notice brought by a complainant. In the decision, the panel held that constructive notice itself could not support bad-faith registration. Yet, as the complainant proved that the respondent had actual knowledge of its trademark rights, the complainant did succeed in its claim. However, some brand owners are not always so lucky.

In another recent WIPO case (Case No D2020-3133), the complainant, an Indian company manufacturing and distributing healthcare products, tried to use the concept of constructive notice. It claimed that the respondent had constructive notice of the complainant’s brand, having operated for over 40 years in India and to some extent in other countries. The respondent was based in Ecuador, a country to which the complainant did not export its products.

First, the UDRP panel reaffirmed that due to the Internet’s global reach, the lack of trading activity in the respondent’s country would not preclude a finding of bad-faith registration. However, the UDRP panel rejected the argument, stating that “panels rarely apply the concept of constructive notice outside disputes between parties located in the United States of America involving federally registered trademarks unless there are additional factors present which put, or should have put, the respondent on inquiry”.

Ultimately, the case was denied as the complainant failed to prove the respondent’s actual knowledge of its trademark; therefore, bad-faith registration could not be established.

UDRP principle: showing actual knowledge of a trademark

Under the UDRP, a brand owner must prove that a respondent has actual knowledge of its trademark at the time of the domain registration. To demonstrate such inference, the complainant can rely on evidence such as the goodwill and reputation of the mark at the time, Google search results for the mark and additional proofs to show that the respondent knew of the brand.

The mere fact that a brand owner had trademark rights before registering the domain name at issue is not deemed sufficient to prove bad-faith registration in UDRP proceedings. This issue is discussed at length in the WIPO Overview 3.0 (Guideline 3.2.2). The consensus view allows complainants to apply the notion of “knew or should have known” when considering bad faith.

Now, due to the global reach of the Internet, UDRP panels have recognised in certain instances that if a complainant is well known in its industry or worldwide, the respondent would not be able to claim that it was unaware of the mark. Therefore, many UDRP decisions have applied this principle by finding that a respondent knew, or should have known, that its registration would be identical or confusingly similar to a famous mark.

For example, in WIPO Case No 2016-1973, the panel found that in the absence of evidence to the contrary, the respondent knew or must have known of the complainant’s trademark MONEYCORP when it registered the domain name. The brand has been in public use since 1979.

The WIPO Overview 3.0 also reiterates that domainers have a higher obligation to avoid the registration of trademark-abusive domain names (see WIPO Overview 3.0, Guideline 3.2.3).

Therefore, brand owners must ensure they can prove the respondent’s actual knowledge of their trademark in order to be successful under the UDRP third element.

Limited scope to apply constructive notice

It is only in very limited cases that the concept of constructive notice has been applied in UDRP proceedings. The threshold for claiming this in domain disputes is very high and only applies in clear-cut cases. In WIPO Case No D2011-0615, the panel reaffirmed that this evidence alone was insufficient to prove that the respondent registered the domain in bad faith. Instead, UDRP panels will consider constructive notice to determine bad-faith registration when combined with clear evidence of cybersquatting activity. One example of such activity is if a respondent is found to have an extensive portfolio of infringing domain names.

Constructive notice also applies where both parties are located in the United States, giving both the complainant and the respondent a fair chance.

When both parties in a UDRP proceeding are located in the United States, and the complainant is the owner of a pre-existing US trademark, UDRP panels have, in limited cases, been more inclined to accept the use of constructive notice as the main argument.

In WIPO Case No D2014-0007, the panel agreed that “the Respondent had constructive knowledge of the complainant’s pre-existing trademark rights and registrations under United States trademark law. See, e.g., Champion Broadcasting System, Inc. v. Nokta Internet Technologies, WIPO Case No. D2006-0128 (‘The Panel notes that both parties are located in the USA and the principle of constructive notice can be applied in accordance with the Rules, Paragraph 15.’)”.

The case follows the view that in limited circumstances, when the parties are both located in the United States and the complainant has obtained a federal trademark registration predating the domain name, constructive notice can be applied.

Brand owners must nonetheless remember that the doctrine of constructive notice is applied in narrow circumstances under the UDRP and should therefore be used with caution. Although the UDRP clarified this early on, some complainants still attempt to rely on this concept, which often ends up in them losing cases. The risk of losing a case by relying on constructive notice alone is very high and is not worth the risk.