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Function4.com #UDRP ends with a finding of Reverse Domain Name Hijacking

Function 4 LLC filed a UDRP against the aged domain, Function4.com.

Registered in 2001, the domain is 20 years old whereas the Complainant in this case registered the mark FUNCTION4 in 2016. The company was formed in 2014.

In the UDRP’s particulars, the sole panelist took note of the Complainant’s allegations:

Complainant has made a number of serious allegations against Respondent for which it provides no evidentiary support. For example, that Respondent was engaged in a phishing endeavor that attempted to secure personal data from Internet users through its “splash page” website, while at the same time arguing that Respondent’s website did not provide contact information. Complainant appears to consider that prefacing such serious allegation of misconduct with “upon information and belief” is sufficient to justify spurious assertions. An allegation “upon information and belief” presupposes that the party making the allegation has some information that would justify a conclusion, and that the party making the allegation believes that information to be true.

The final decision ordered the domain to remain with the Respondent, and delivered a finding of Reverse Domain Name Hijacking against the Complainant:

In filing its complaint, Complainant acted in willful or grossly negligent disregard of known facts concerning Respondent. Because of Complainant’s blatant disregard of jurisprudence (notwithstanding the argument as to a representation flowing from a domain name renewal) and facts, the Panel finds that Complainant has engaged in Reverse Domain Name Hijacking.

Full details on the decision for Function4.com follows.

Function 4, LLC v. Michael McGrath
Case No. D2020-2725

1. The Parties

Complainant is Function 4, LLC, United States of America (“United States”), represented by Madan Law PLLC, United States.

Respondent is Michael McGrath, United States, represented by Latham & Watkins LLP, United States.

2. The Domain Name and Registrar

The disputed domain name <function4.com> is registered with GoDaddy.com, LLC (the “Registrar”).

3. Procedural History

The Complaint was filed with the WIPO Arbitration and Mediation Center (the “Center”) on October 17, 2020. On October 19, 2020, the Center transmitted by email to the Registrar a request for registrar verification in connection with the disputed domain name. On October 20, 2020, the Registrar transmitted by email to the Center its verification response disclosing registrant and contact information for the disputed domain name which differed from the named Respondent and contact information in the Complaint. The Center sent an email communication to Complainant on November 8, 2020 providing the registrant and contact information disclosed by the Registrar, and inviting Complainant to submit an amendment to the Complaint. Complainant filed an amended Complaint on November 11, 2020.

The Center verified that the Complaint together with the amended Complaint satisfied the formal requirements of the Uniform Domain Name Dispute Resolution Policy (the “Policy” or “UDRP”), the Rules for Uniform Domain Name Dispute Resolution Policy (the “Rules”), and the WIPO Supplemental Rules for Uniform Domain Name Dispute Resolution Policy (the “Supplemental Rules”).

In accordance with the Rules, paragraphs 2 and 4, the Center formally notified Respondent of the Complaint, and the proceedings commenced on November 16, 2020. In accordance with the Rules, paragraph 5, the due date for Response was December 6, 2020. Following request from Complainant for an extension due to circumstances arising from the pandemic, the due date for Response was extended, and the Response was timely filed with the Center on December 14, 2020.

The Center appointed Frederick M. Abbott as the sole panelist in this matter on January 5, 2021. The Panel finds that it was properly constituted. The Panel has submitted the Statement of Acceptance and Declaration of Impartiality and Independence, as required by the Center to ensure compliance with the Rules, paragraph 7.

4. Factual Background

Complainant is owner of registration of the word service mark (hereinafter “trademark”) FUNCTION4 on the Principal Register of the United States Patent and Trademark Office (“USPTO”), registration number 5,044,386, registration dated September 20, 2016, in international classes 35, 37 and 42, covering business advisory services relating to document management, computer and software installation and support, as further specified.

Complainant operates a commercial website offering services in the information technology field, including document management, at <function-4.com>. In its applications for trademark registration, Complainant asserts first use of the FUNCTION4 trademark in August-September 2015.

According to the Registrar’s verification, Respondent is registrant of the disputed domain name. According to that verification, the record of registration for the disputed domain name was created on July 22, 2001. Complainant has acknowledged Respondent’s ownership of registration of the disputed domain name from its 2001 creation date.

Respondent currently uses the disputed domain name to host a webpage (“splash page”) solely displaying the term “Function 4”. Between 2002 and 2013, Respondent operated an active commercial website identified by the disputed domain name that used the Function4 name and logo. In 2013, as the four members of the enterprise turned to other principal professional activities, Respondent reduced the website presence to the splash page currently displayed. The disputed domain name is currently used as the domain in email addresses by several members of the consulting group previously operating under the Function4 name.

Respondent received several unsolicited offers (in 2013 and 2015) to purchase the disputed domain name, and Respondent declined those offers. According to Respondent, one of those offers was made by telephone by an employee of Complainant. Respondent has provided a contemporaneous email record of that call in which he confirmed with his business group their intention to retain the disputed domain name. Respondent has further provided records indicating that an employee of Complainant was in touch with Respondent regarding the disputed domain name in March 2017. GoDaddy.com, acting as domain name broker, contacted Respondent in 2018 with an offer to purchase the disputed domain name, which offer Respondent declined.

The registration agreement between Respondent and the Registrar subjects Respondent to dispute settlement under the Policy. The Policy requires that domain name registrants submit to a mandatory administrative proceeding conducted by an approved dispute resolution service provider, one of which is the Center, regarding allegations of abusive domain name registration and use (Policy, paragraph 4(a)).

5. Parties’ Contentions

A. Complainant

Complainant contends that it has rights in the trademark FUNCTION4.

Complainant alleges that Respondent lacks rights or legitimate interests in the disputed domain name because: (1) registration as such does not establish rights or legitimate interests; (2) Respondent’s website does not include contact information; (3) the disputed domain name is identical and confusingly similar to Complainant’s trademark; (4) there is no evidence that Respondent used or made any bona fide preparation to use the disputed domain name with a bona fide offering of goods or services; (5) Respondent has not been known by the disputed domain name; (6) Respondent has not provided any evidence of legitimate noncommercial or fair use; (7) Respondent’s placeholder webpage is a “weak piece of evidence” regarding use or demonstrable preparations to use; (8) Complainant was unable to locate a business in the Massachusetts area with Respondent’s name, stating “a reasonable business owner intending to conduct business in good faith, would register a limited liability corporation or incorporate a business with their secretary of state”; (9) Respondent has acquired no trademark or service mark rights in FUNCTION4; (10) Respondent has chosen the disputed domain name in an intentional attempt to confuse consumers into believing its website is actually that of Complainant; (11) Respondent’s website does not alert consumers that the website is not operated by Complainant.

Complainant argues that Respondent registered and is using the disputed domain name in bad faith because: (1) an Internet user could accidentally find Respondent’s website when looking for Complainant’s by mistyping; (2) Respondent may have registered the disputed domain name to prevent Complainant from registering it, or to sell it to a competitor of Complainant; (3) Respondent registered the disputed domain name to disrupt the business of Complainant; (4) Respondent has intentionally attempted to attract Internet users to its website by using Complainant’s trademark; (5) the Policy prevents individuals from engaging in phishing schemes to obtain personal information from Internet users, which Respondent is doing; (6) typo- squatting constitutes bad faith; (7) there is no possible circumstance in which Respondent could use the disputed domain name in good faith; (8) there is precedent under the Policy that Respondent has an obligation not to use the disputed domain name to infringe Complainant’s trademark rights.

Complainant requests the Panel to direct the Registrar to transfer the disputed domain name to Complainant.

B. Respondent

Respondent does not contest that Complainant holds some rights in the trademark FUNCTION4 as evidenced by registration, but notes that there are a substantial number of other businesses operating under that trademark in the United States, including with federal registrations. Complainant appears to operate solely in the state of Texas, and its trademark rights are accordingly limited.

Respondent has long-standing rights and interests in the disputed domain name. Respondent and three colleagues formed an unincorporated group providing a range of professional marketing services, and in that connection Respondent registered the disputed domain name on July 21, 2001. Respondent used the website identified by the disputed domain name as a platform for clients to view a portfolio of its work, and to solicit work for professional services. Respondent’s use of the website identified by the disputed domain name for its ongoing business continued into 2013.

Complainant was well aware of Respondent’s rights in the disputed domain name as it contacted Respondent in 2015, both directly and indirectly, seeking to purchase the disputed domain name. Complainant subsequently sought to determine whether Respondent continued to use the disputed domain name through sending “test” messages, and subsequently an offer was received by Respondent from GoDaddy.com acting as broker to purchase the disputed domain name in July 2018.

Complainant’s argument that Respondent has not been known by the disputed domain name is “knowingly false”.

Respondent’s members continue to use the disputed domain name as the domain and personal email addresses, which itself establishes rights or legitimate interests.

To maintain rights in a domain name there is no requirement that the domain name owner forms a corporate entity, operates an active website or provides contact details on it.

Respondent registered the disputed domain name in 2001, 13 years before Complainant was registered as a company. This standing alone is sufficient to defeat Complainant’s claim of bad faith. Respondent could not have registered the disputed domain name to take unfair advantage of trademark rights that did not exist in favor of Complainant.

Complainant’s attempted reliance on a soundly rejected minority of UDRP decisions suggesting that infringing use of a domain name standing alone constitutes bad faith must be rejected.

Complainant’s argument that Respondent is attempting to attract Internet users by relying on Complainant’s trademark is baffling since Complainant is also arguing that Respondent’s website does not constitute making use of the disputed domain name.

Complainant’s argument that Respondent registered the disputed domain name to prevent Complainant from owning it, or to sell it to a competitor, stretches credulity since Complainant did not exist when Respondent registered the disputed domain name.

Complainant’s insinuation that Respondent is possibly engage in a phishing scheme is outrageous and defamatory, without any basis in fact.

Complainant’s argument regarding typo-squatting does not make sense since there are no misspellings in Respondent’s disputed domain name.

Respondent requests the Panel to reject Complainant’s Complaint.

Respondent requests the Panel to make a finding of Reverse Domain Name Hijacking (“RDNH”) against Complainant. Respondent alleges that Complainant was clearly aware that the disputed domain name was registered far in advance of Complainant’s acquisition of any trademark rights. 1 Complainant’s invocation of outdated and rejected prior case law under the UDRP represents an attempt to mislead Panel. Complainant tried and failed to secure the disputed domain name from Respondent by making an offer to purchase it, which offer was rejected by Respondent. Respondent “further requests that, to the extent possible, Complainant, and its counsel, be barred from filing future complaints due to this egregious conduct and abuse of the UDRP process”.

6. Discussion and Findings

It is essential to Policy proceedings that fundamental due process requirements be met. Such requirements include that a respondent have notice of proceeding that may substantially affect its rights. The Policy and the Rules establish procedures intended to ensure that respondents are given adequate notice of proceedings commenced against them and a reasonable opportunity to respond (see, e.g., Rules, paragraph 2(a)).

The Center formally notified the Complaint to Respondent at the email and physical address provided in its record of registration. Respondent timely filed a Response, confirming that notice was received. The Center took those steps prescribed by the Policy and the Rules to provide notice to Respondent, and those steps are presumed to satisfy notice requirements.

Paragraph 4(a) of the Policy sets forth three elements that must be established by a complainant to merit a finding that a respondent has engaged in abusive domain name registration and use and to obtain relief. These elements are that:

(i) the disputed domain name is identical or confusingly similar to a trademark or service mark in which complainant has rights; and

(ii) respondent has no rights or legitimate interests in respect of the disputed domain name; and

(iii) the disputed domain name has been registered and is being used in bad faith.

Each of the aforesaid three elements must be proved by a complainant to warrant relief.

A. Identical or Confusingly Similar

Complainant has provided evidence of rights in the trademark FUNCTION4 as evidenced by registration at the USPTO and use in commerce. See Factual Background, supra. Respondent has not challenged Complainant’s rights in that trademark (though disputing the extent of protection conferred). The Panel determines that Complainant has rights in the trademark FUNCTION4.

The disputed domain name directly and fully incorporates Complainant’s trademark. It is identical to that trademark from the standpoint of the Policy.

The Panel determines that Complainant has rights in the trademark FUNCTION4, and that the disputed domain name is identical to that trademark.

B. Rights or Legitimate Interests

Respondent has provided substantial evidence of use of the disputed domain name for the bona fide offering and provision of services prior to notice of this dispute which is sufficient to establish rights or legitimate interests in favor of Respondent. This is sufficient basis for the Panel to reject the Complaint. The Panel, as a matter of administrative efficiency, does not further address this finding, proceeding to its finding with respect to bad faith.

C. Registered and Used in Bad Faith

In order to prevail under the Policy, Complainant must demonstrate that the disputed domain name “has been registered and is being used in bad faith” (Policy, paragraph 4(a)(iii)). Paragraph 4(b) of the Policy states that “for the purposes of paragraph 4(a)(iii), the following circumstances, in particular but without limitation, if found by the Panel to be present, shall be evidence of the registration and use of a domain name in bad faith”.

Complainant expressly acknowledged in its Complaint that Respondent registered the disputed domain name in 2001 and Complainant made no suggestion that some party other than Respondent has owned or controlled the disputed domain name at any point since its registration. Despite this, Complainant recites a litany of arguments regarding ways in which Respondent registered the disputed domain name to abuse Complainant’s trademark rights when those rights plainly did not exist when Respondent registered the disputed domain name. The WIPO Overview 3.0 states the rule clearly: a party that registers a domain name prior to the existence of trademark rights does not abuse those rights.2 While there are certain potential exceptions to the general rule, such as when a proceeding is initiated after a domain name has been transferred to an unrelated third party, or when registration is undertaken following the public announcement of an impending trademark use, none of these exceptions are remotely relevant here.

Complainant must have been aware that – as is clearly described in the WIPO Overview – a few dated UDRP cases suggesting that use of a domain name in a trademark-infringing manner in the absence of abusive registration is sufficient for an adverse finding were decisively rejected. Having cited one of those cases, Complainant must have undertaken sufficient research to understand that this concept is not an accepted part of consensus views of panels forming UDRP jurisprudence. It is also noteworthy that Complainant sought to rely on an argument that a renewal of a domain name registration forms an ongoing representation and warranty not to infringe third party rights; this cannot overcome the registration timing issue here.

Respondent did not register the disputed domain name in bad faith. It registered the disputed domain name long prior to Complainant’s acquisition of trademark rights. Complainant has not provided any evidence that Respondent might have contemplated taking unfair advantage of Complainant or its trademark when it registered the disputed domain name.

Complainant has made a number of serious allegations against Respondent for which it provides no evidentiary support. For example, that Respondent was engaged in a phishing endeavor that attempted to secure personal data from Internet users through its “splash page” website, while at the same time arguing that Respondent’s website did not provide contact information. Complainant appears to consider that prefacing such serious allegation of misconduct with “upon information and belief” is sufficient to justify spurious assertions. An allegation “upon information and belief” presupposes that the party making the allegation has some information that would justify a conclusion, and that the party making the allegation believes that information to be true. To be clear, there is nothing whatsoever in the documentation provided by Complainant to suggest that Respondent was engaged in any type of phishing activity, or for that matter any misconduct with respect to the disputed domain name.3 Moreover the UDRP is not managed on a notice pleadings basis (where phrases such as “on information and belief” are used) where there is subsequent discovery.

For the foregoing reasons, the Panel rejects Complainant’s request for a finding of bad faith registration and use of the disputed domain name by Respondent.

Reverse Domain Name Hijacking

Respondent has requested the Panel to make a finding of Reverse Domain Name Hijacking against Complainant.

The Rules provide:

Rule “1. Definitions

In these Rules:

[…]

Reverse Domain Name Hijacking means using the Policy in bad faith to attempt to deprive a registered domain-name holder of a domain name.”

Rule “15. Panel Decisions

[…]

If after considering the submissions the Panel finds that the complaint was brought in bad faith, for example in an attempt at Reverse Domain Name Hijacking or was brought primarily to harass the domain-name holder, the Panel shall declare in its decision that the complaint was brought in bad faith and constitutes an abuse of the administrative proceeding.”

Complainant recited that the disputed domain name was registered in 2001, some 15 years prior to Complainant’s 2016 registration of its own trademark. Complainant’s application for trademark registration self-asserted a 2015 date of first use. Despite this, Complainant proceeded to recite various abusive acts by Respondent which necessarily presumed that Complainant held trademark rights at the time of Respondent’s actions, such as registering with the intent to prevent Complainant from registering the disputed domain name, and with the intent to disrupt Complainant’s business. Moreover, despite the fact that Complainant itself attempted to purchase the disputed domain name from Respondent, and knowing that Respondent rejected those offers, Complainant alleged that Respondent registered the disputed domain name with the intent to sell it to Complainant or a competitor. Complainant offered no plausible theory regarding how Respondent may have abused its trademark rights when they did not exist.

Complainant went on to allege that Respondent was engaged in an abusive phishing scheme with no supporting evidence whatever.

In filing its complaint, Complainant acted in willful or grossly negligent disregard of known facts concerning Respondent. Because of Complainant’s blatant disregard of jurisprudence (notwithstanding the argument as to a representation flowing from a domain name renewal) and facts, the Panel finds that Complainant has engaged in Reverse Domain Name Hijacking. The Panel notes that this finding is consistent with several recent UDRP decisions rendered in similar contexts. See Glovoapp23, S.L. v. Wang Shun, WIPO Case No. D2019-1986; Scalpers Fashion, S.L. v. Dreamissary Hostmaster, WIPO Case No. D2019-2937; Nu Pagamentos S.A v. Dan Hudson, Nubank, WIPO Case No. D2019-3138, and; Sahil Gupta v. Michal Lichtman / Domain Admin, Mrs Jello, LLC, WIPO Case No. D2020-1786.

7. Decision

For the foregoing reasons, the Complaint is denied, and a finding of reverse domain name hijacking is made against Complainant and to the extent possible, against its attorney.

Frederick M. Abbott
Sole Panelist
Date: January 17, 2021

1 Respondent’s brief cites precedential support as follows:
See Nu Pagamentos S.A v. Dan Hudson, Nubank, WIPO Case No. D2019-3138; see also Scalpers Fashion, S.L. v. Dreamissary Hostmaster, WIPO Case No. D2019-2937 (Reverse Domain Name Hijacking found where the disputed domain name was registered long before the complainant obtained trademark rights, complainant attempted to purchase the disputed domain name, and ignored established UDRP panel positions set forth in WIPO Overview of WIPO Panel Views on Selected UDRP Questions, Third Edition (“WIPO Overview 3.0”)); Sahil Gupta v. Michal Lichtman / Domain Admin, Mrs Jello, LLC, WIPO Case No. D2020-1786 (finding Reverse Domain Name Hijacking where complainant unsuccessfully attempted to purchase the disputed domain name, then filed a groundless complaint); Glovoapp23, S.L. v. Wang Shun, WIPO Case No. D2019-1986 (finding Reverse Domain Name Hijacking where complainant was made aware that the disputed domain name was registered 17 years earlier and was much older than Complainant’s company which “doomed the Complaint”).

2 WIPO Overview 3.0, at section 3.8.1 (“Subject to scenarios described in 3.8.2 below [not applicable here], where a respondent registers a domain name before the complainant’s trademark rights accrue, panels will not normally find bad faith on the part of the respondent.”

3 Complainant makes the argument that for Respondent to show that it was operating or planning to operate a legitimate business it must have formed an LLC or otherwise formally incorporated because that is the benchmark of a legitimate business undertaking. While formal incorporation can be part of establishing a legitimate business, it is not a necessary element of showing a good faith intent to pursue a business.


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