Wednesday, April 30, 2008

Two potential defenses to bad faith shot down

In Forever 21 v. Matthias Moench, WIPO Case No. D2008-0258 (J. Nelson Landry, April 16, 2008), the Panel required the transfer of foever.com. The Complainant owned the registered mark FOREVER 21, and the Panel was readily satisfied that the omission of the first "r" in FOREVER within the disputed domain evidenced actionable typosquatting. This conclusion was bolstered by the fact that the Respondent used the disputed domain in connection with a website containing a link farm, and had been on the losing end of four prior UDRP decisions.

In reaching its decision, the Panel addressed two "potential" defenses. I say "potential" because these defenses would have had a better chance of success if the Respondent filed an argumentative response. As in the majority of UDRP cases, however, the Respondent defaulted and suffered the consequences of such default.

The first potential defense related to the scope of the Complainant's trademark rights and the Respondent's knowledge of such rights. More specifically, while the Complainant was located in the United States of America and owned trademark registrations there, the Respondent was located in Germany. Under these circumstances, an argument could have been made that the Respondent was not aware of the Complainant at the time of registering its domain name, thereby negating the necessary finding of bad faith registration. The Panel quickly dismissed any such notion:

"The Complainant adduced evidence only as to its use and registration in the United States of America and none as to its use elsewhere nor to the extent of its sales and promotional costs, consequently this Panel cannot conclude that the Complainant enjoys any significant fame associated with the Trademark. This does not eliminate nor diminish the consequences of this small difference in the deletion of one letter and the addition of the top level domain name '.com'. It is clear to this Panel upon considering the single letter 'r' difference in the domain name in dispute and the Trademark that the Respondent was in all likelihood aware of the existence of the Trademark of the Complainant at the time he registered the domain name in dispute. The alternative would in this Panel’s view be too much of a coincidence.... [typosquatting] alone may constitute registration in bad faith." (Emphasis added) (internal citation omitted).

Second, the Panel addressed the fact that the Complainant's website appeared in the list of links contained on the Respondent's website. Potentially, an argument could have been made that including the Respondent's website in such list obviated any potential confusion, as consumers would quickly realize that the Respondent's website is not provided by the Complainant. On the other hand, an argument could be made that by linking to the Complainant's website, the Respondent clearly knew of the Complainant's existence, thereby evidencing the Respondent's bad faith in registering and using the disputed domain. The Panel addressed neither of these potential arguments, but quickly disposed of any notion that linking to the Complainant's website could obviate the Respondent's bad faith:

"[T]he diversion of users to Respondent’s website to generate traffic and sales commissions for its own commercial benefit, amounts to a conduct uniformly recognized by an earlier panel decision to be in bad faith. This Panel does not consider that the presence of the website of the Complainant within the 10 addresses in the link farm diminishes in any way the use in bad faith of the domain name in dispute by the Respondent." (Emphasis added) (internal citation omitted).

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