Opinion ID: 783938
Heading Depth: 3
Heading Rank: 1

Heading: Effect of the UDRP Administrative Proceeding

Text: 44 Preliminarily, Cello argues that Storey effectively waived his res judicata argument by failing to seek a stay of arbitration and by instead allowing the [UDRP] arbitrators to reach a decision on the merits of his jurisdictional defense. Cf. Halley Optical Corp. v. Jagar Int'l Marketing, 752 F.Supp. 638, 639 (S.D.N.Y. 1990) (Under 9 U.S.C. § 4, the proper procedure for a party to challenge whether it is subject to an arbitration agreement is to move the district court for a stay of arbitration.). We disagree. UDRP Paragraph 4(k) provides for independent resolution of the parties' dispute in the courts, and this provision is incompatible with Cello's argument that Storey's litigation strategy before the UDRP administrative panel has diminished Storey's ability to present his case in the Instant Action. Unlike traditional binding arbitration proceedings, UDRP proceedings are structured specifically to permit the domain-name registrant two bites at the apple. The UDRP administrative proceedings are mandatory, but only in the sense that all registrants are obliged by virtue of the agreement to recognize the validity of a proceeding initiated by a third-party claimant. UDRP proceedings, however, need not be the exclusive remedy: an administrative proceeding does not preclude the registrant from vindicating his rights under the ACPA or trademark law in court. Cf. Parisi, 139 F.Supp.2d at 751 (Although the UDRP describes the process as `mandatory' in the sense that a registrant's refusal to participate may lead to an uncontested loss of the domain name, the process is not `mandatory' in the sense that either disputant's legal claims accrue only after a panel's decision.). We therefore hold that Storey's presentation of the res judicata defense to a UDRP administrative proceeding does not prevent Storey from raising the issue in this suit for relief under § 1114(2)(D)(v). 45 For much the same reasons that we find that the UDRP panel's resolution of the res judicata question has no bearing on our consideration of that issue on appeal, we believe that the district court erred in focusing its analysis on whether Cello was barred by res judicata from initiating the UDRP Administrative Proceeding. See Storey, 182 F.Supp.2d at 361-62. This formulation of the res judicata issue misconstrues Storey's action and the importance of the UDRP Administrative Proceeding. 46 Storey's complaint in the Instant Action alleges a cause of action pursuant to 15 U.S.C. § 1114(2)(D)(v), which states: 47 A domain name registrant whose domain name has been suspended, disabled, or transferred under a policy described under clause (ii)(II) may, upon notice to the mark owner, file a civil action to establish that the registration or use of the domain name by such registrant is not unlawful under this Act. The court may grant injunctive relief to the domain name registrant, including the reactivation of the domain name or transfer of the domain name to the domain name registrant. 48 In 15 U.S.C. § 1114(2)(D)(ii)(II), the term policy is defined to refer to any reasonable policy by [a] registrar ... prohibiting the registration of a domain name that is identical to, confusingly similar to, or dilutive of another's mark. Neither party contests that the UDRP is a policy within the scope of § 1114(2)(D)(ii)(II). 49 Storey's claim, therefore, seeks to demonstrate that his registration and use of cello.com is not unlawful under this Act, namely under the ACPA, 9 vis-a-vis Cello's trademark rights in the mark cello. Although UDRP Paragraphs 4(a)-(c) establish the substantive elements that a complainant must prove to prevail in a UDRP administrative proceeding, the administrative panel's consideration of these contractual criteria does not affect the district court's determination of whether Storey's registration and use of cello.com is lawful under the ACPA. 50 The ACPA provides an allegedly aggrieved trademark owner a cause of action similar to, yet distinct from, the threshold for an administrative remedy under UDRP Paragraphs 4(a)-(c). We agree with the First and Fourth Circuits that a claim brought by a domain name registrant under § 1114(2)(D)(v) seeks a declaration of nonviolation of the ACPA, not requiring (or permitting) review of the UDRP panel's application of the UDRP's cybersquatting standard, but instead trump[ing] the panel's finding of noncompliance. Sallen, 273 F.3d at 18, 27; accord Hawes v. Network Solutions, Inc., 337 F.3d 377, 386 (4th Cir.2003) ([A]n action brought under § 1114(2)(D)(v) on the heels of an administrative proceeding [under the UDRP]... is independent of, and involves neither appellate-like review of nor deference to, the underlying proceeding.). 10 51 The decision issuing from the UDRP Administrative Proceeding is relevant, therefore, only insofar as it triggered Storey's right to sue under § 1114(2)(D)(v). 11 See Barcelona.com, 330 F.3d at 626 (noting that a UDRP panel decision is relevant only to serve as the reason for [registrant's] bringing an action under § 1114(2)(D)(v)).