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Combating Cyber-Squatting and Other Domain Name Maladies: An Overview of UDRP Proceedings

Businesses that are working to establish an easily identifiable Internet presence oftentimes utilize their trademarks in their domain names in order to better direct customers to their website venues.  Unfortunately, disputes many times occur when a business learns that some other individual or entity is using that enterprise's trademark or something very similar in such a way so as to confuse consumers.  Moreover, some businesses have ended up having to deal with so-called cyber-squatters, individuals or businesses who register domain names with hopes of reselling them at a premium price.  There are protocols and procedures in place through which some of these disputes can be resolved in a more timely manner.
Pursuant to the standard registration agreements associated with domain names that include .com, .org, .net, .info, and .biz suffixes provide for the resolution of domain name related disputes under the provisions of the Uniform Dispute Resolution Policy ("UDRP"). Due to the fact that all domain name registrations have agreed to the UDRP as a part of their actual registration agreement, the UDRP is available no matter the residence of the domain name registrant or of the trademark owner who may have issues with the registration or the registrant.  In the end, this fact does provide what must be considered to be a significant advantage of the UDRP over heading to court when the trademark owner resides in one country and the domain name registrant resides somewhere else.

Another benefit of a UDRP proceeding is the fact that such a proceeding is fast and inexpensive.  This particularly is the case (so to speak) when compared to litigation in court. A UDRP proceeding is initiated with the filing of a complaint together with the payment of a filing fee. The filing fee for a dispute involving one domain name to be decided by a single panelist is as little as $1500. The fee will be higher if one of the parties then requests to have the matter decided by three panelists. The fee is somewhat higher if the dispute involves multiple domain names as opposed to a dispute involving only one domain name.

Another advantage of this system is found in the fact that the complaint is filed electronically. Once the initial complaint is filed, an answer is due within 20 days.  The answer also is filed electronically.
Generally speaking, the complaint and the answer are the only documents that the panel will consider and review.  Unlike in a court, there is no discovery and there is no actual live hearing or trial. Normally, a panel will deliver its decision in about three months.  The decision will be sent to the parties via email.  The panel has the power to order that the domain name be canceled or transferred.  However, the panel is unable to award damages or attorney fees – which are available in a court of law in some instances.  Within about three months, the panel usually delivers its decision. 

In order to be successful in a UDRP proceeding, a trademark owner who is challenging a domain registrant must prove three items to the panel:

1.    The trademark owner must show a legal interest in the trademark in the first instance.
2.    The trademark owner must show that the domain registrant has no rights or legitimate interest in regard to the domain name itself.  The trademark owner only has to demonstrate that there is no legitimate interest.  If the domain registrant fails to demonstrate any legitimate interest in the domain name, the trademark should prevail.
3.    Finally, the trademark owner must demonstrate that the domain name initially was registered and then was utilized in bad faith.  Pursuant to the UDRP, there are four circumstances in which bad faith can be demonstrated
4.    An attempt to sell the domain name registration for an amount that is in excess of the registrant's out of pocket expenses.
5.    A pattern of registering domain names to prevent trademark or service mark owners from being able to utilize that trade or service mark in a domain name.
6.     Registration of a domain name with the primary intent of disrupting the business of a competitor.
7.    Using the domain name to intentionally attract Internet users for a commercial purpose by creating confusion in regard to the ownership or endorsement of a particular website venue that is in fact not actually associated with the trade or service mark owner.

These circumstances in fact are only examples and other evidence of bad faith can also be demonstrated in a complaint.

After considering the matter as presented, if the panel agrees with the trademark or service mark owner, the panel will order the transfer of the domain name to that individual or entity.  In the alternative, the domain name may be canceled.
Even though the panel cannot order attorney fees, a complaining party can pursue those independently in a court of law in some instances.

If you are interested in keeping abreast of the latest developments in the worlds of business, finance and the internet, you can easily subscribe to the alerts and legal updates that we provide with regularity.  If you have any questions or concerns about domain names, cybersquatting, the UDRP or any other issues affecting your website or online business, feel free to contact us for a consultation either by telephone or via email.

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