Recent UDRP cases reveal trademark applications are being targeted by cybersquatters

Oct 4, 2021, 11:06 AM

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This article was first published in the World Trademark Review magazine on 23 September 2021.

So far in 2021, at least five UDRP cases have been filed against a single registrant, who continues to target recently made trademark applications. The registrant in question purchases the domain and then advertises its sale in order to make a quick profit.

Brand owners must be aware of the expeditious nature of cybersquatters. Trademark applications are made public on online databases and are ripe targets for abusive registrations.

The cost of securing the matching domain name to the brand owner’s planned trademark is insignificant compared to the costs of retrieving it through legal action. Domain names act as source identifiers on the Internet, so they should not be a mere afterthought when launching a new brand.

Inclusion of domains in trademark strategy

The most important similarity between trademarks and domain names is that they signify the source of goods or services offered thereunder. This is why domain names can be used to deceive and defraud consumers. It is also why cybersquatters can profit from selling brand-laden domains back to brand owners.

 

Domain names are offered on a first-come, first-served basis. However, under the right circumstances, domain names can be legally retrieved through alternative dispute resolution procedures. While these are inexpensive compared to litigation, the costs can be reduced by diligently registering the domain names you need before someone else does.

When creating a new brand, the process of securing trademark applications in various jurisdictions is often a complex and lengthy task, and these applications are made publicly available. Unfortunately, a new brand’s presence in the online space can be jeopardised by eagle-eyed cybersquatters, unless domain names are secured early.

Recent trademark application UDRP cases

There have been several recent examples of these in 2021, all by the same registrant.

 

In WIPO Case D2021-1142, the complainant applied for a US trademark for BLACK & MILD 808. Four days later, the respondent registered the domain name ‘blackandmild808.com’. While not mentioned in the decision, the same occurrence appears in WIPO Case D2021-0400, where pharmaceutical giant Novartis applied for the trademark LOWER.LONGER.LEQVIO. Four days later, the respondent registered ‘lowerlongerleqvio.com’. The same situation has occurred for Superdry (WIPO Case D2021-0477), DAZN (WIPO Case D2021-1588) and Amedei (CAC Case 103029).

The respondent in each case is listed as “Domain Administrator” or “Domain is for sale at www.dan.com” a popular domain marketplace, usually for $990. As the name suggests, the registrant has created a scheme which takes advantage of newly applied for trademarks. The domain is then held for the sole purpose of selling it for profit.

While it may be tempting for brand owners to simply pay the $990, which is less than a UDRP filing, doing so only fuels further cybersquatting. Imbuing a cybersquatter with confidence that their scheme reaps profits will inevitably lead to greater costs in the future.

In each of the above cases, the new brand contained an already registered trademark. As a result, the complainants could rely on pre-existing trademarks to successfully retrieve the domain name. The panel for Case D2021-0477 stated: “The fact that the domain name was registered merely days after the complainant applied for a trademark […] demonstrates opportunistic bad faith on the part of the respondent.”

What would occur, however, if the trademark applications made in the above cases had not contained the complainants’ pre-registered trademarks?

Opportunistic bad faith and unregistered rights

It is a general rule under the UDRP that a complainant must have a registered trademark predating the domain name to claim bad faith on the part of the respondent.

The trademark right must have existed at the time of the domain name’s registration for the respondent to have targeted it. This is a basic and logical rule, although it is not infallible. Respondents can target a brand owner’s quasi-trademark rights, with clear cybersquatting intent.

Where that clear intent is shown, UDRP panels are prepared to find a bad faith registration, even if the trademark has not matured to registration.

WIPO’s jurisprudential overview of the UDRP states that a respondent may act in bad faith when targeting “nascent (typically as yet unregistered) trademark rights”. Some examples given are:

• “shortly before or after announcement of a corporate merger;
• further to the respondent’s insider knowledge […];
• further to significant media attention […]; or
• following the complainant’s filing of a trademark application.”

However, a big issue for brand owners bringing this type of UDRP will be the first element. Here, the complainant is required to prove rights to the mark at issue. A trademark application does not suffice. Instead, unregistered trademark rights must be proven, which necessitates considerable evidence.

If such evidence cannot be produced, the case may fail at the first element. This occurred in NAF Claim FA2103001937991: again, the respondent registered the domain name days after the complainant applied for a trademark. Unfortunately, the complainant did not convince the panel that it had acquired unregistered trademark rights in its applied-for trademark.

Thus, this case was filed “too soon”, something which was emphasised by the panel. The panel stated in the decision that the complainant would likely succeed in the UDRP case once its trademark had been registered.

Therefore, if a brand owner does not secure matching domain name registrations when applying for a trademark, it can face difficulties when recovering the domain. The brand owner must either produce significant evidence of unregistered trademark rights, or wait until the trademark registration has matured. Neither situation is ideal.

Brand owners should not forget the importance of registering brand-laden domain names. Even if the brand owner does not plan to use the domain name, a defensive registration is far more cost-effective than subsequent legal action. The best course is simply to register the domain name before or immediately upon applying for a trademark.