The compensatory reasons for a trademark owner choosing the UDRP lie in the efficiency of its procedures and the quickness in resolving disputes. Reasoned decisions are generally delivered within 45 days of filing a complaint. Also, in the 15 years of its existence, the UDRP has developed an impressive jurisprudence that is partly based on trademark law, but which has essentially developed in much the same way as the common law, namely through successive decisions.
This makes for a fairly predicable outcome in most cases. There is no appellate procedure under the UDRP, but if either party is unhappy with the UDRP decision it may commence a de novo civil action under the ACPA.
Arbitrating Under The UDRP
The UDRP has a simple three part structure. For standing to maintain an administrative proceeding the complainant has to prove two elements: the domain name is either identical or confusingly similar to the trademark; and complainant has to have a trademark right.
Applicants for trademark rights are ineligible. Other parties who may be aggrieved by a domain name registration but have no trademark rights (an individual personal name for example), have no standing to complain. If complainant has standing it must then prove that respondent lacks any right or legitimate interest in the domain name in issue.
Finally, the complainant has to prove that the respondent has registered and is using the domain name in bad faith.
The common denominator of bad faith is targeting a complainant's trademark with the intent of profiting from it. Bad faith is defined by the respondent's acts in either registering or using the domain name.
There are four nonexclusive circumstances that, in practice, cover a good bit of the the universe of possibilities. Bad faith is found on proof of 1) extortion, 2) expropriation, 3) competitor foul play, and 4) impersonation. The first three are distinguished by focusing on registration. The fourth targets mark owners through their use of the domain name.
In counterpoint to the acts of bad faith there are three circumstances in defense of the registration of the domain name, which are are also nonexclusive. Forfeiture is not warranted where the domain name holder is 1) making a bona fide offering of goods or services before any notice of a dispute; 2) commonly known by the domain name, and 3) using the domain name for noncommercial or fair use.
The concern about cybersquatting is particularly important to owners whose trademarks are on the weak end of the spectrum of protection. This is so because the evidentiary demands for shutting down monetized websites or inactive domain names are quite substantial.
Owners of strong trademarks are more likely to prevail on their claims because they have secure reputations in the physical marketplace but with the expansion of TLDs they will have to be particularly vigilant because of the increased opportunities for predation. This includes, on the horizon for launching in 2015, a "dot sucks" that is likely to prove particularly troublesome to trademark owners across the board and will bring into play a tension inherent in a defense of fair use.
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