Source: https://iplegalcorner.com/challenging-udrp-awards-in-federal-court-recent-outcomes/?shared=email&msg=fail
Timestamp: 2019-04-21 12:28:17+00:00

Document:
Challenging UDRP awards in actions under the Anticybersquatting Consumer Protection Act (ACPA) is infrequent though steady. There are currently a number of court filings in U.S. district courts that are in the early stages, most notably the ADO.com case reported on in an earlier essay and several others have either been referred to mediation (the IMI.case) or settled or discontinued. Federal decisions adjudicating trademark infringement under the Trademark Act of 1946 (as amended), the Lanham Act where the marks postdate domain name registrations are more of a rarity, but there is one to report. Whether by trial, summary judgment, Consent, or Default Judgment the results are instructive in two ways: first, in understanding the principles and factors panelists and judges apply in determining parties’ rights to domain names; and second, in educating parties about their evidentiary burdens in both fora. I have dealt with some of these issues previously in Post-UDRP, ACPA Actions Challenging Awards.
Here, I will report briefly on three recent outcomes, one by the rights holder for trademark infringement instead of cybersquatting, Dealerx v. Kahlon, 2:17-cv-1444 (E.D. Cal., November 22, 2017) challenging the award in DealerX v. Gurri Kahlon, ROiQ.com, D2017-0488 (WIPO May 4,2017) (<roiq.com>); and two by domain name holders for declarations that their registrations were not unlawful: Kyle Burns v. Connecting Open Time, LLC, 17-cv-00840 (D. Arizona, July 27, 2018) challenging the award in Connecting Open Time, LLC v. Domains By Proxy, LLC / Kyle Burns, D2016-2328 (WIPO February 27, 2017) (<opentime.com>), and Direct Niche, LLC v. Via Varejo S/A, 15-cv-62344 (S.D. Fla., August 10, 2017), affirmed (11th Circuit August 3, 2018) challenging the award in VIA VAREJO S/A, v. Domain Admin, D2015-1304 (WIPO October 17, 2015) (<casa bahia.com>).
The Court noted in Dealerx that while “it does not have to credit the findings of the UDRP decision, [it] is in agreement that the facts do not support a finding of bad faith in relation to defendant’s initial acquisition of the ‘roiq’ domain name.” Bad faith registration would have been impossible to prove because the domain name registration predated the mark. Rights holders of marks postdating registration of domain names have no actionable claim under the UDRP and lack standing to maintain an ACPA action, thus their only recourse (if they have one at all) is to state and prove a claim for trademark infringement.
submission of an e-mail chain between plaintiff and defendant showing defendant attempting to extract a high price from the plaintiff for purchase of the domain name…. Defendant further demonstrated bad faith by asserting that he tried to create consumer confusion by placing content on the website associated with his infringing domain that mirrored plaintiff’s business model…. Defendant’s actions after being made aware of his infringement are relevant to the bad faith analysis.
The takeaway here rights holders’ alternative to taking possession of an infringing domain name. Holders can be dispossessed under the Lanham Act (rather than the ACPA) if the domain names can be shown to be infringing mark owners’ statutory trademark rights. In Dealerx, the Court granted a permanent injunction, transfer of the domain name, and attorney’s fees.
While it is not possible to know the reasons for settling, when the prevailing party in a UDRP is willing to concede to a declaration of lawful registration it is not unreasonable to infer it has assessed the risk of defendING the ACPA action—the risk being damages (up to $100,000) and attorney’s fees. Hidden from view in Connecting Open Time is Defendant’s counsel’s calculation of the merits of its client’s superior right to <opentime.com>. (While settlements add nothing to the jurisprudence, the terms agreed upon can be instructive to parties similarly situated).
Given the misrepresentations, conflicting and unsubstantiated statements, and lack of explanations by Respondent, this Panel based on the evidentiary record place before it, has doubts about the credibility of Respondent’s claim of prior use of OPEN TIME and thus concludes that Complainant has prior and superior rights in OPENTIME.
This is a cautionary reminder to defense counsel to pay attention to and learn from such admonitions what is expected of them in so far as mounting a defense. Credibility can be a significant factor in determining rights. In the ACPA lawsuit, Kyle Burns was represented by competent counsel; and to its credit, so was the Defendant.
Via Varejo used the Casas Bahia service mark in commerce in the United States [thus satisfying the requirement that it prove secondary meaning]. The [district] court based its finding on evidence that Via Varejo contracts with U.S. companies to provide advertising of their goods on the Casas Bahia Website, both through preferred product placement and the banner ad program. These advertising services are rendered on the Casas Bahia Website in conjunction with the Casas Bahia mark. Moreover, Via Varejo’s marketing director testified to his personal knowledge that the Casas Bahia Website receives millions of visits every year from IP addresses located in the United States. The district court’s conclusion that this evidence demonstrates sufficient public use in commerce to establish ownership of the mark is not clearly erroneous. Accordingly, we affirm.
In contrast to Dealerx whose mark postdated the registration of the domain name, Via Varejo proved it had standing under the ACPA because its unregistered mark predated registration of the infringing domain name. The Court found the evidence copious in plaintiff’s favor.
Mr. Levine is the author of a treatise on trademarks, domain names, and cybersquatting, Domain Name Arbitration, A Practical Guide to Asserting and Defending Claims of Cybersquatting under the Uniform Domain Name Dispute Resolution Policy (Legal Corner Press, 2015). Available on Amazon and Barnes & Noble. Supplement and Update through August 2016 published January 2017. A Second Edition of the treatise is scheduled for publication December 2018. If you purchased the First Edition, you can buy the Second Edition 50% off list price by contacting inquiries@legalcornerpress.com or gmlevine@researchtheworld.com. The discount will not be available from Amazon and Barnes & Noble.

References: v. 
 v. 
 v. 
 v. 
 v. 
 v.