When Inaction Is Bad Faith: The New Implications Of A Failure To Search

Article by Julia Anne Matheson and Jennifer Adams Draffen

This article is an updated version of a previously published article co-authored by Julia Anne Matheson titled, "See No Evil, Hear No Evil: No Trademark Search? No Defense."

By now, most practitioners recognize that to prevail under the Uniform Dispute Resolution Policy ("UDRP" or "Policy"), a complainant must establish not only that the challenged domain name is identical or confusingly similar to its trademark, and that the registrant has no rights or legitimate interest in that domain name, but further, that the registrant's registration and use of the domain name was in bad faith. Section 4(b) of the Policy details a series of four non-exclusive scenarios that satisfy the bad faith requirement. The growing body of case law decided under the Policy suggests that the variety of scenarios satisfying the bad faith requirement are continuing to evolve and expand to meet the challenges created by cybersquatters.

In the Kate Spade decision issued earlier this year, the UDRP Panel suggested that a domain name registrant's failure to conduct a trademark search prior to registering a domain name was an additional scenario to add to that "bad faith" list. Kate Spade, LLC v. Darmstadter Designs, 9 ILR (P&F) 3079 (WIPO Jan. 3, 2002) ("Kate Spade"). A recent decision issued by the District Court from the Eastern District of Virginia suggests that a failure to conduct a trademark search prior to a domain name's purchase may likewise support a bad faith finding under the UDRP.

The facts of both cases are worthy of discussion, as they not only reflect an additional scenario evidencing bad faith available for recovery in the UDRP context, but because these cases also signal the growing importance of trademark searches as a defensive tool.

The dispute in Kate Spade involved the domain name JACKSPADE.COM. Complainant Kate Spade ("Spade") launched a new line of products under the JACK SPADE mark nearly six months prior to the challenged domain name's registration. The JACK SPADE mark was the subject of a U.S. trademark application filed by Spade with the U.S. Patent and Trademark Office ("USPTO") nearly two years earlier. Following the domain name's registration, and for three years thereafter, respondent neither activated the domain name nor offered it to Spade for sale. When Spade's subsequent efforts to reach the domain name registrant by mail and phone were unavailing, Spade sought relief by filing a complaint under the UDRP.

In concluding that the respondent's registration and use of the "jackspade.com" domain name did satisfy the "bad faith" requirements of the Policy, the arbitrator's analysis took a novel turn. Instead of relying merely upon the respondent's long-term...