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Sten Lillieström — 08/11/21

This is how the UDRP criterion “in bad faith” differs between .se and .com

When European and Swedish trademark experts get involved in UDRP complaints (Uniform Dispute Resolution Policy), sometimes their ideas collide with the reality of things. One of the reasons could be a single word.

In the case of a UDRP litigation, which is used for generic top-level domains such as.COM, the appellant must be able to establish that both registration and use have been in bad faith (to purposedly damage or profit off the trademark), to even stand a chance to acquire the disputed domain name.

”Your domain name has been registered AND is being used in bad faith”. (UDRP)

In Sweden, and in several other countries’ national policies for domestic domain name extension, this is not the case. “Either or” is enough.

“Your domain name has been registered OR used in bad faith”. (ATF)

In Sweden, the fact is that a domain name that was registered prior to the existence of the trademark can be awarded the complainant. You could say that the burden of proof is easier because the priority right is erased. For registrants using .SE and other European country code top-level domains, the difference between the proceedings, on the other hand, means that the right to a domain name is weaker in the case of a dispute.

I guess you could say that the “OR”-model is more kind to trademark owners, Gerald Levine says, author of the book Domain Name Arbitration.

An important reason for the difference, according to the Swedish internet authority (“the Swedish Internet Foundation”), was the 2001 WIPO publication “ccTLD Best Practices for the Prevention and Resolution of Intellectual Property Disputes”, which suddenly deviated from WIPO’s original final report on the process and recommended that the word “AND” in the relevant part of UDRP would be replaced with “OR”.

However, WIPO reached the consensus that “AND” was to be preferred. The governing body ICANN (Internet Corporation for Assigned Names and Numbers) themselves rejected versions with “OR”.

The background for when UDRP came into being was that it should be a cost-efficient fast track for the “for a relatively small group of intrusive registrations”. UDRP’s scope of law was simply not meant for the most obvious cases. The American Congress, and WIPO, did not want an arbitral tribunal, which often consists of one panelist only and has 14 days to reach a decision, to handle difficult considerations that a court of law would have been much more suited for.

The use of “AND” was in that sense a method of narrowing down when a trademark owner has the right to complain and to circle in on frivolous applications that might be attempts to get domain names there are no rights to.

In general, UDRP’s practice has followed this “narrow scope”, but sometimes it has not. This can be exemplified with the rare cases of a UDRP result being tried in court on the initiative of a losing UDRP defendant.

A relevant example is the UDRP decision regarding <lottostore.com> and <lottoworks.com>, in which the defendant lost to the appellant. The decision was later revoked in an American federal court, and the appellant (now defendant) was deemed guilty of Reverse Domain Name Hijacking, RDNH.

This means that it is plausible that UDRP panels sometimes override their scope of law by handling errands that go beyond the “narrow group” for which the process is intended.

Also, within the UDRP process, there are alternative interpretations of the Bad Faith conduct. A movement that more or less argued that “AND” could be interpreted as “OR” led to a steep increase in the number of unfounded applications and is now called the theory of “retroactive bad faith”.

The same lines of thoughts were more or less in Swedish and European processes, here it was however with support from the statutes.

For trademark owners, this difference between litigations can be good to be familiar with, and for anyone entertaining the thought of a UDRP process, it could be necessary to be well familiarized with, because rejection can end up in an RDNH verdict (Reverse Domain Name Hijacking). If the defendant then were to take that to an American court under the Anti-cybersquatting Protection Act (ACPA), it could result in damages.

If there is also a continued big interest in the domain name, also after a lost UDRP, you can count on the price taking off or the possibility of acquisition to disappear entirely.  Something which should also be worth considering.