In the recent decision of Shoe Land Group LLC v. Development, Services c/o Telepathy Inc. (Nat. Arb Forum 1255365, June 9, 2009) a three member Panel was faced with a dispute over the domain www.shoeland.com. Complainant, is a footwear retail store and maintains a web site at www.shoeland.net. Complainant claimed use of the mark SHOE LAND since March 1, 1997 and has a Federal registration for the mark since April4, 2006. Respondent replied to the ICANN UDRP complaint noting that they are a business who regularly registers domains with intrinsic value and generates revenue from pay-per-click advertising links. The disputed domain was registered in 1998.

As the Panel noted, Paragraph 4(a) of the Policy requires that the Complainant must prove each of the following three elements to obtain an order that a domain name should be cancelled or transferred: (1) the domain name registered by the 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 of the domain name; and (3) the domain name has been registered and is being used in bad faith.

The Panel began with the first prong, whether the domain was identical or confusingly similar to Complainant’s mark. The Panel found that complainant had sufficient rights under the Policy ¶4(a)(i), but noted as follows:

In its Complaint and Additional Submission, Complainant also asserts and provides evidence of its rights in the SHOE LAND mark through its continuous use of the mark in commerce since at least as early as March 1997. Nevertheless this use of the mark remained local, and does not provide the mark with secondary meaning. As a result, the Panel finds that Complainant does not have sufficient common law rights in the SHOE LAND mark under Policy ¶ 4(a)(i), dating back to March 1997. 

Regardless the Panel found Complainant had satisfied the first prong. Moving to the second prong, whether Respondent had any rights or legitimate interests in the domain, the Panel noted that Complainant failed to establish a prima facie case. Respondent argued, and the Panel agreed as follows:

Complainant does not have common law rights dating back as far as September 1998, when Respondent registered the disputed domain name, because Complainant’s SHOE LAND mark had not acquired secondary meaning by that time.  Respondent contends that the evidence put forth by Complainant fails to demonstrate that Complainant was well-known yet outside of the Orlando, Florida area, or that Complainant had spent much money promoting the SHOE LAND mark.    

Respondent also argued that it registered generic domain names as a business practice, which would satisfy the rights or legitimate interests section of the policy. The Panel agreed with this concept as well finding that “registering such a generic domain name is a business practice that confers upon the practitioner rights or legitimate interests in that domain name. As a result, the Panel finds that Respondent established rights in the disputed domain name pursuant to Policy ¶ 4(a)(ii).”

Moving to the last prong, whether the domain was registered and used in bad faith, the Panel explained that since Respondent had proved it had rights or legitimate interests in the domain at the time of registration, then the registration could not have been in bad faith. The Panel explained:

The Panel finds that a respondent is free to register a domain name consisting of common terms, unless he is aware or should have been aware of the secondary meaning those common terms had at the time of the registration. Since the disputed domain name contains such common terms and as there was no secondary meaning at the time of the registration, the Panel is of the opinion that Respondent did not register  the <shoeland.com> domain name in bad faith under Policy ¶ 4(a)(iii).

The Panel also addressed a request by Respondent to find Reverse Domain Name Hijacking. The Panel explained that since Complainant provided evidenced of active promotion of the SHOE LAND mark since 1997 there could not be reverse domain name hijacking. The Panel further explained that reverse domain name hijacking requires bad faith on the part of Complainant and that none was present.

For an interesting counter perspective on the issue of reverse domain name hijacking, read the dissenting opinion by one of the Panelists, who believes this was a clear case of reverse domain name hijacking. He argues that the Complainant had no reasonable basis for arguing bad faith The single dissenting Panelist also chastises the Complainant for revealing emails and facts that the parties engaged in settlement discussions and sale of the domain negotiations prior to the dispute, despite the fact that those communications were labeled “Confidential-For Settlement Purposes Only.”

Ultimately, the Panel DENIED Complainant’s request for transfer and DENIED Respondents request for reverse domain name hijacking.

The headline is prompted by a lengthy well reasoned dissent in favor of reverse domain name hijacking in Shoe Land Group LLC v. Development Services c/o Telepathy Inc., FA0904001255365 (Nat. Arb. Forum June 9, 2009). The majority held that because the Complainant proved it had a trademark albeit acquired after the registration of the domain name– that is, satisfying one element of the Policy – it escaped a finding that it was using the UDRP abusively. In my Note of June 2 I reported on another Panel who stopped short of finding RDNH although he “would not have hesitated” had the Complainant been represented by counsel. These conclusions suggest an amorphous standard.

Should a complainant who succeeds on the first element of the Policy be let off even though it has no case? What if the complainant also proves that the respondent lacks rights or legitimate interests but its trademark dates many years after the registration of the domain name? The number of years intervening between the registration and the trademark and the geographic remoteness or nearness of the parties should make a difference in the outcome. The dissent in Shoe Land was in no doubt that the complainant’s conduct was abusive. “Obviously, a panel should not lightly make a finding of Reverse Domain Name Hijacking against a complainant, but nor should it shy away from making such a finding in a clear case.” He concludes that the “present case is not a borderline but a clear case and the finding therefore should be made.” The clear case was based on, among other things, the falseness of the allegations: the Complainant “then alleged that the Respondent must have registered the domain name in bad faith, ‘purposely’ to divert ‘Internet users searching for Complainant’s services’, an allegation that could not have been true [since] ... the domain name was registered 7 years before the registered trademark was applied for” etc.

The majority saw no bad faith in bringing the complaint without explaining why the number of years intervening and the remoteness of the Complainant from the Respondent could possibly be justified on the theory that the “complainant did not know and should not have known that one of the three elements in the Policy ... was absent.”