By:  Bert Andia, Member, Higgins Benjamin, PLLC

Choosing and registering a correct domain name is an important part of any business
enterprise, and you should endeavor to pick a domain that cannot be disputed. This article uses the case of Disney Enterprises, Inc. v. McSherry, 2003 NAFDD LEXIS 11339 (June 17, 2003) to illustrate the domain dispute process.

Janice lived in North Carolina, but still owned a beautiful four-bedroom home in
Orlando, Florida in close proximity to the Walt Disney World resort and theme park. Janice
decided to keep her home, but rent it to vacationers who were looking to spend time in Orlando
and, probably, at Disney’s theme park. She began renting her own home, as well as the homes of others. Eventually, she was renting 55 homes in the Orlando, Florida area and started a business named Florida Vacation Homes, Inc. She registered the domain name thinking that travelers looking for a single family house in close proximity to Disney® might be attracted to her website.

Janice operated her business for three (3) years – and then she got a certified letter from Disney Enterprises, Inc. claiming that she was improperly using the Disney trademark, and demanding that she transfer ownership of her domain name to Disney.

Janice quickly found out about an administrative procedure specifically set up for disputes over domain names. Since it was launched in December 1999, the Uniform Domain Name Dispute Resolution Policy (UDRP) is the mandatory global procedure for resolving disputes over all top-level domains and some country code top-level domains. The UDRP was established in response to individuals registering domain names using well known trademarks (also known as “cybersquatters”), without the trademark owner’s permission, hoping to sell the domain name at an inflated price. Currently, the UDRP procedure is provided by The Asian Domain Name Dispute Resolution Centre (ADNDRC), the National Arbitration Forum (NAF), the World Intellectual Property Organization (WIPO), the Czech Arbitration Court, and the Arbitration Center for Internet Disputes.

Disney filed a UDRP complaint with the National Arbitration Forum. The paper-only arbitration procedure is designed to determine whether the Complainant can establish three elements:

(1) The domain name registered by Respondent is identical or confusingly similar to a trademark or service mark in which the Complainant has rights;

(2) The Respondent has no rights or legitimate interests in respect to the domain name; and

(3) The domain name has been registered and is being used in bad faith.

Identical or Confusingly Similar. Disney provided evidence of its registration of the mark DISNEY®. The one-arbitrator panel determined that Janice’s domain name was confusingly similar to the DISNEY® mark. The inclusion of generic words, or ordinary descriptive words (like “vacation” and “villas”) was found to be insufficient to detract from the overall impression of the dominant part of the name. Note that common law or unregistered trademark rights are sufficient to show rights in a mark for the purposes of the UDRP.

Rights or Legitimate Interests. Under UDRP policy, if the Complainant can prove that Respondent had no rights or legitimate interests for Respondent’s use of the mark, the burden of proof on this element shifts to Respondent to prove rights and legitimate interests in the domain name. The UDRP provides examples of how Respondent might prove a legitimate interest in the domain name: (1) by proving that, before receiving any notice of the Complainant’s rights, Respondent used the domain name in a legitimate manner; (2) by proving that the domain name corresponds with a name by which Respondent is commonly known; or (3) by proving that Respondent is making a fair non-commercial use of the domain name.

Janice introduced evidence that, for a number of years prior to receiving notice from Disney, her company was known as Disney Vacation Villas. However, the panel found that Janice did not, and could not, demonstrate that she was known as Disney Vacation Villas prior to registration of the domain name.

Janice also introduced evidence that she was making a bona fide offering of service on her website. However, since Janice admittedly used the word “Disney” in her domain name to attract Internet users to her site and since Janice was in competition with Disney for vacation rentals, Janice’s use of the domain name was found to be in violation of UDRP policy (use which intentionally trades on the fame of another cannot constitute a bona fide offering of services).

Registration and Use in Bad Faith. UDRP policy provides four non-exclusive examples of bad faith use and registration: (1) circumstances indicating that Respondent has registered the domain name primarily for the purpose of selling, renting, or transferring the domain name to the Complainant or a competitor of Complainant for valuable consideration in excess of the Respondent’s documents costs directly related to the domain name; (2) Respondent registered the domain name in order to prevent the trademark owner from reflecting the mark in a corresponding domain name provided that Respondent has engaged in a pattern of such conduct, (3) Respondent registered the domain name primarily to disrupt the business of a competitor; or (4) Respondent intentionally attempted to attract, for commercial gain, Internet users to its website by creating a likelihood of confusion with the Complainant’s mark as to the source, sponsorship, affiliation, or endorsement of Respondent’s website.

Disney set to prove “bad faith” under the fourth example, i.e. that Janice was intentionally using the domain name to attract Internet users to her website by creating a likelihood of confusion. Janice countered that argument by establishing that her website was designed to avoid any confusion with a Disney-sponsored website, including the use of a disclaimer. Janice provided information from consumers that they were not mislead or confused when viewing her website.

The panel, however, decided that Janice admittedly chose to include “Disney” in her domain name in order to attract Internet users looking for rental properties close to Disney’s theme park. Janice also admitted that Disney® provided rental lodging within the theme park and, therefore, she was in competition with Disney®. Therefore, the panel concluded that Janice’s use met the standard for “bad faith”.

The panel ordered that the domain name be transferred from Janice to Disney.

For more information on disputing a domain name or registering the correct domain name please contact Bert Andia at Higgins Benjamin PLLC. (336) 273-1600.
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