Source: https://iplegalcorner.com/limitations-delays-and-laches-as-defenses-to-cybersquatting-claims/?shared=email&msg=fail
Timestamp: 2019-04-21 12:38:48+00:00

Document:
In passing the baton for combating cybersquatting to the Internet Corporation for Assigned Names and Numbers (ICANN) the World Intellectual Property Organization (WIPO) recommended that “claims under the administrative procedure [should not] be subject to a time limitation” (Final Report, Paragraph 199). ICANN agreed and the UDRP contains no limitation period for making a claim. The absence of a limitation period does not necessary forego applying equitable defenses for delay, but the consensus of Panels appointed to decide disputes under the Uniform Domain Name Dispute Resolution Policy (UDRP) is that they are not applicable in countering cybersquatting claims. This finds expression in many decisions, including for example Lowa Sportschuhe GmbH v. Domain Admin, Whois Privacy Corp., D2017-1131 (WIPO August 1, 2017) (<lowa.com>; and Mile, Inc. v. Michael Burg, D2010-2011 (WIPO February 7, 2011) (Panels have “generally declined to apply the doctrine of laches.”) As a result, delay by itself does not support a defense per se to cybersquatting claims.
Rather, determining whether complainants “state a claim” depends on the factual circumstances each party marshals in support of its position. In Square Peg Interactive Inc. v. Naim Interactive Inc., FA 209572 (Forum December 29, 2003) (to take one of many examples) the Panel held that “[a]lthough laches by itself is not a defense to a complaint brought under the Policy, Complainant’s delay in seeking relief is relevant to a determination of whether Respondent has been able to build up legitimate rights in the Domain Name in the interim, and whether it is using the Domain name in bad faith” (emphasis added).
The issue of limitations, delay, and laches has become obsessive in some quarters urging a Policy amendment that would have the effect of limiting rights holders’ in UDRP proceedings to claims within a declared limitations period. But, what would that period be, and should there be one? Under U.S. trademark law (and this may be equally true of other jurisdictions) there is no explicit statute of limitations for trademark infringement or cybersquatting—when the need arises, federal courts refer to analogous state statutes of limitations in applying the corresponding presumption of laches. Analogous state statutes are either three or four years. For opposition and cancellation claims under the Lanham Act it is five years (15 U.S.C. § 1064).
But whatever the limitation may be, it is not conclusive because the Lanham Act also provides for equitable defenses, even against marks that have become incontestable: 15 U.S.C. § 1115(b)(9) provides that a person’s right to a mark is subject to “equitable principles, including laches, estoppel, and acquiescence.” Courts apply laches to address the inequities created by a trademark owner who, despite having a colorable infringement claim, has unreasonably delayed in seeking redress to the detriment of the defendant. UDRP decisions can be cited in which Panels have applied equitable principles in response to persuasive facts, and when such facts are present Panels have been extra careful in explaining the legal basis for denying complaints even if it is not explicitly for laches.
In the recent dispute involving <aquafx.com>, to take another example, Aqua Engineering & Equipment, Inc. v. DOMAIN ADMINISTRATOR / PORTMEDIA HOLDINGS LTD, FA1805001785667 (Forum June 25, 2018), Respondent vigorously argued that Complainant had the burden of explaining why it had waited so long citing numerous cases including Bosco Prod., Inc. v. Bosco email Servs., 94828 (Forum June 29, 2000) (“Without determining if the passage of considerable time would alone bar Complainant from relief in this proceeding, the Panel notes that Complainant does not explain why it has waited nearly four years to try and resolve [the domain name dispute].” As it happens, though, the decision did not turn on delay. The Panel denied the complaint for Complainant’s failure to pass the “rights” test).
it should be emphasized that the three circumstances described in paragraph 4(c) are not intended to constitute an exhaustive list of legitimate registration and usage of domain names. Even if none of the three listed circumstances is present, the administrative procedure would still not apply to a dispute where the domain-name holder can show that its activities are otherwise legitimate. (Emphasis added).
There is a substantial body of Lanham Act decisions denying complaints for unexplained or excessive delay. The factors isolated by judges are no less applicable to decision-making in UDRP cases. For laches to apply under U.S. trademark law the defendant must show (1) “that the plaintiff had knowledge”—actual or constructive—”of the defendant’s use of an allegedly infringing mark”; (2) “that the plaintiff inexcusably delayed in taking action with respect to the defendant’s use”; and (3) “that the defendant would be prejudiced by allowing the plaintiff to assert its rights at this time.” Chattanoga Mfg., Inc. v. Nike, Inc., 301 F.3rd 789, 792-793 (7th Cir. 2002). Determining parties’ rights “requires a qualitative examination of the parties’ words and conduct and an equitable evaluation of the length of the delay and the degree of prejudice to the defendant if the trademark owner’s rights are enforced,” which “generally requires a factual record.” Hyson USA, Inc. v. Hyson 2U, Ltd., 821 F.3d 935, 941 (7th Cir. 2016). Paragraph 4(c)(i) of the Policy embodies part of this concept, “[b]efore notice” but the “prejudice” element must be proved.
This is not to minimize registrants’ anxieties over potential unfair decisions transferring long-held domain names acquired for their inherent value. (The long-term holding issue has not emerged thus far with the Uniform Rapid Suspension System because new gTLDs only began arriving in the market in 2013—there has not been enough elapsed time). As already noted, the outcome in the ADO case (to take one example currently pending in federal court for a declaration under the ACPA) only heightens investor insecurity, although the incidence of divestment is extremely low. Nevertheless, some Panels may find bad faith in registering domain names composed of random letters and common terms regardless of the length of time held. As the time of holding continues to lengthen, it is likely that more long-held domain names will be challenged. Whether they are forfeited to complainants depends on the factual matrix.
Nevertheless (and recognizing there are exceptions) UDRP Panels take into account the same factors examined in federal actions in determining parties’ rights. Because the stakes are so high, domain name holders must learn what Panels expect from them. If Panels have to make “qualitative examination” it presupposes domain name registrants build a record, but in many cases they default and their silence condemns them. I am thinking of the IMI case, acquired 23 years earlier than the complaint, and there are other examples. Unless registrants curate their websites shrewdly and understand the evidentiary demands for rebutting or proving their rights they will be vulnerable to losing their assets.
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 January 2019. 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.

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