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Reverse #Domain Name Hijacking finding in Kret.org #UDRP

Kret.org, a short domain registered in 2005, was challenged via the UDRP process.

The Complainant is Aktsionernoe Obshchestvo “Kontsern Radioelektronnye Tehnologii”, Russian Federation, that claimed rights to the Russian trademark for KRET.

The sole WIPO panelist pointed out the following:

“The Complaint lacks candour in that it makes no mention of the fact that the Complainant has traded under the name “KRET” only since 2014 and not from when it was established in 2009. In the event the distinction is not material to the case but it could have been if the Respondent had acquired the disputed domain name after the Complainant was established.”

Not only was the Complained denied transfer of the domain, they were also found to be guilty of Reverse Domain Name Hijacking.

Full details of this UDRP decision for Kret.org follow:

WIPO Arbitration and Mediation Center
ADMINISTRATIVE PANEL DECISION
Aktsionernoe Obshchestvo, Kontsern Radioelektronnye Tehnologii v. Titan Networks, Domain Hostmaster
Case No. D2019-3170

1. The Parties

The Complainant is Aktsionernoe Obshchestvo “Kontsern Radioelektronnye Tehnologii”, Russian Federation, represented by IPAKS GROUP, LLC, Russian Federation.

The Respondent is Titan Networks, Domain Hostmaster, United States of America (“United States”), represented internally.

2. The Domain Name and Registrar

The disputed domain name <kret.org> is registered with Sea Wasp, LLC (the “Registrar”).

3. Procedural History

The Complaint was filed with the WIPO Arbitration and Mediation Center (the “Center”) on December 23, 2019. On December 24, 2019, the Center transmitted by email to the Registrar a request for registrar verification in connection with the disputed domain name. On December 26, 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 the Complainant on December 27, 2020, providing the registrant and contact information disclosed by the Registrar, and inviting the Complainant to submit an amendment to the Complaint. The Complainant filed an amendment to the Complaint on December 31, 2020.

The Center verified that the Complaint together with the amendment to the 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 the Respondent of the Complaint, and the proceedings commenced on January 8, 2020. In accordance with the Rules, paragraph 5, the due date for Response was February 1, 2020. The Response was filed with the Center on February 1, 2020.

The Center appointed Adam Taylor as the sole panelist in this matter on February 13, 2020. 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

The Complainant, which was established in 2009, manufactures a range of electronic products including avionics for both military and civil aircraft. It supplies products to over 30 countries and employs some 50,000 people in the Russian Federation.

The Complainant trades under the name “KRET”.

The Complainant owns three Russian Federation trade marks Nos. 555824, 555829, 555830 for different versions of a logo incorporating the stylized term “KRET”, all filed on June 10, 2014, and registered on October 27, 2015, in classes 9, 10, 11, 12, 17, 37, 38, 40 and 42. The Complainant also owns International Mark No. 1272635 for a “KRET” logo, registered on July 16, 2015, in class 9.

The disputed domain name was created on May 4, 2005.

On an unspecified date, the Respondent used the disputed domain name for a parking page containing general pay-per-click (“PPC”) links and a statement that this “premium domain name” was for sale. The sales enquiry button for the disputed domain name linked to a page stating that most of the Respondent’s domain names cost between USD 1,950 and USD 7,900.

5. Parties’ Contentions

A. Complainant

A summary of the Complainant’s contentions is as follows:

Due to the Complainant’s long-standing use and promotion of its mark, the “KRET” brand is well known and exclusively associated with the Complainant. The Complainant has invested significant sums in the creation, maintenance and protection of its mark.

The disputed domain name is identical or confusingly similar to the Complainant’s mark, which it fully incorporates. The disputed domain name also infringes the Complainant’s rights in its trade marks.

Registration of a disputed domain name before a complainant acquires trade mark rights does not prevent a finding of identity or confusing similarity.

The Respondent lacks rights or legitimate interests in the disputed domain name.

There is no evidence of use of the disputed domain name for a bona fide offering of goods or services or for preparations for such an offering. The Respondent registered the disputed domain name only for the purpose of sale.

The Respondent was not known by the disputed domain name and it possesses no registered trade mark rights in the term “KRET”.

There is no evidence of a legitimate noncommercial or fair use of the disputed domain name.

The Complainant has established a prima facie case that the Complainant lacks rights or legitimate interests and the burden shifts to the Respondent to prove otherwise.

The disputed domain name was registered and is being used in bad faith.

Under paragraph 4(b)(i) of the Policy, an offer to sell a domain name for valuable consideration in excess of out of pocket costs conclusively establishes that it has been registered and used in bad faith.

The price range quoted by the Complainant for the disputed domain name far exceed the typical registration and maintenance costs for a domain name.

Several UDRP panels have interpreted paragraph 2 of the Policy as an ongoing warranty that the disputed domain name will not be used in bad faith. The panel in Octogen Pharmacal Company, Inc. v. Domains By Proxy, Inc. / Rich Sanders and Octogen e-Solutions, WIPO Case No. D2009-0786 (“the Octogen Case”) imposed on the registrant a continuing duty to ensure that the domain name is not used in violation of another’s rights, including trade mark rights.

Paragraph 4(a)(iii) of the Policy involves a consideration of whether “in all the circumstances of the case” a respondent is acting in bad faith. The following circumstances here are indicative of bad faith: the Respondent’s lack of a legitimate domain name-related reason to use the mark “KRET”; the Respondent’s grossly excessive price for the disputed domain name designed to generate enormous profit; the fact that the Respondent contributes no “value-add” to the disputed domain name; and the fact that “kret” is an arbitrary word.

The Respondent’s registration and use of the disputed domain name disrupts the Complainant’s business by diverting traffic to the Respondent.

B. Respondent

A summary of the Respondent’s contentions is as follows:

While the Respondent has not investigated the legitimacy of the Complainant’s trade mark rights, it does not dispute that the Complainant may be one of many legitimate users of the term “Kret” and may have trade mark rights in the Russian Federation or elsewhere.

The Respondent acquired the disputed domain name on June 12, 2007. The Respondent considered that such a short domain had significant value because it was memorable and brandable. The Respondent liked the “strong” sound of the term, the fact that it was so short and that it could be used for almost any purpose because it was not an exact dictionary word.

Many other parties use the same term. The Respondent has the same rights and legitimate interests as anyone else. The Respondent did not buy the disputed domain name to infringe the Complainant’s rights as the Complainant did not exist at that time.

The Complainant did not register or use the disputed domain name in bad faith.

Selling generic domain names is a legitimate multi-million dollar business. The Complainant misrepresents paragraph 4(b)(i) of the Policy by omitting the requirement that the disputed domain name must have been registered for sale to the company which owns the trade mark rights. The Respondent could not have done so here as the Complainant did not exist when the Respondent registered the disputed domain name.

A Complainant press release shows that the Complainant only started using the name “KRET” in 2014.

The Respondent did not become aware of the Complainant until it filed this case.

UDRP panels do not normally find bad faith on the part of a respondent where, as here, the domain name was registered before the complainant’s trade mark rights had accrued.

The Respondent never offered to sell the disputed domain name to the Complainant. The Complainant is relying on a page which the Respondent places on all of its undeveloped domain names designed to discourage “lowball purchase offers”. In any case the Complainant never contacted the Respondent before the dispute and the Respondent never offered to sell the disputed domain name to anyone at any specific price.

The Respondent is a United States-based web development company and it has never used the disputed domain name for any field related to the Complainant. Any use of the disputed domain name by the Respondent will not interfere with or cause confusion with the Complainant’s use of the term.

The Respondent requests a finding of reverse domain name hijacking. The Complainant’s legal counsel should have known that a legitimate UDRP filing requires a showing of bad faith but no such evidence has been provided. Perhaps the Complainant thought the Respondent would not respond and that it would win by default. And perhaps it thought that the Respondent or the Panel would agree with its false characterisation of paragraph 4(b)(i) of the Policy. The Respondent has had to expend considerable effort researching the UDRP process and preparing its Response even though the Complainant and its counsel knew or should have known that there was no evidence of bad faith.

6. Discussion and Findings

Under the Policy, the Complainant is required to prove on the balance of probabilities that:

– the disputed domain name is identical or confusingly similar to a trade mark in which the Complainant has rights;

– the Respondent has no rights or legitimate interests in respect of the disputed domain name; and

– the disputed domain name has been registered and is being used in bad faith.
A. Identical or Confusingly Similar

Disregarding the domain name suffix, the disputed domain name is confusingly similar to the Complainant’s figurative trade marks, which are dominated by the word “KRET”. Section 1.10 of the WIPO Overview of WIPO Panel Views on Selected UDRP Questions, Third Edition (“WIPO Overview 3.0”) states that assessment of confusing similarity involves comparing the (alpha-numeric) domain name and the textual components of the relevant mark and that design or figurative/stylised elements which are incapable of representation in domain names are largely disregarded.

The Panel therefore finds that the Complainant has established the first element of paragraph 4(a) of the Policy.
B. Rights or Legitimate Interests

It is unnecessary for the Panel to consider this issue in view of its finding under the third element below.
C. Registered and Used in Bad Faith

The Complainant must establish both registration and use in bad faith.

Section 3.8.1 of the WIPO Overview of WIPO Panel Views on Selected UDRP Questions, Third Edition (“WIPO Overview 3.0”) states that, subject to certain limited scenarios where a domain name was registered in anticipation of nascent trade mark rights (not applicable here), panels will not normally find bad faith on the part of the respondent where a respondent registers a domain name before the complainant’s trade mark rights accrue.

The Complainant was established in 2009. Although the Complainant does not specifically say when it began trading under the name “KRET”, the Respondent has drawn attention to a press release announcing the Complainant’s rebranding to “KRET” in 2014. The Complainant’s registered trade mark rights also date from 2014.

The Respondent claims that it acquired the disputed domain name from its previous owner via an auction in 2007. While the Respondent has not supplied proof of the 2007 acquisition date, the Respondent is mentioned on a version of the website at the disputed domain name dated July 26, 2011 1 ,i.e., before the Complainant acquired trade mark rights in the name “KRET” in 2014.

Furthermore, the Complaint appears to proceed on the assumption that the Respondent acquired the disputed domain name before the Complainant acquired trade mark rights. Nor has the Complainant sought to submit a supplemental filing to dispute, or at least, question the Respondent’s claim to have acquired the disputed domain name in 2007.

Given the Panel’s conclusion that the Respondent acquired the disputed domain name before the Complainant’s trade mark rights occurred, the Respondent could not have registered the disputed domain name in bad faith for the purposes of the Policy. It is therefore unnecessary for the Panel to consider in detail the various other matters raised by the Complainant relating to alleged bad faith.

The Panel would just observe briefly that the Complainant is wrong to claim that an offer to sell a domain name for valuable consideration in excess of out of pocket costs of itself establishes registration and use in bad faith. See section 3.1.1 of WIPO Overview 3.0, which observes that the practice as such of registering a domain name for subsequent resale, including for a profit, would not by itself support a claim that the respondent registered the domain name in bad faith. The Complainant has omitted that, under 4(b)(i) of the Policy, the domain name must have been registered primarily for sale to the complainant or a competitor.

As to the Complainant’s reliance on the Octogen Case and other similar decisions in connection with so‑called “retroactive” bad faith registration, this concept has been rejected in subsequent cases. See section 3.2.1. of WIPO Overview 3.0.

For the above reasons, the Panel finds that the Complainant has failed to establish the third element of paragraph 4(a) of the Policy.
D. Reverse Domain Name Hijacking (“RDNH”)

Paragraph 15(e) of the Rules provides that, 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”. RDNH is defined under the Rules as “using the UDRP in bad faith to attempt to deprive a registered domain-name holder of a domain name”.

See examples of the reasons articulated by panels for finding RDNH at section 4.16 of the WIPO Overview 3.0.

The Panel finds RDNH in this case for the following reasons:

1. The Complainant has failed by a large margin. In the Panel’s opinion, the Complainant knew or at least should have known that it could not prove one of the essential UDRP elements. The Complainant’s representatives quoted extensively from UDRP case law and the Panel thinks it unlikely that they were unaware of the current overwhelming view of UDRP panelists as to the need to prove registration as well as use in bad faith and that the 10-year old cases cited are no longer “good law”.

2. The Complaint lacks candour in that it makes no mention of the fact that the Complainant has traded under the name “KRET” only since 2014 and not from when it was established in 2009. In the event the distinction is not material to the case but it could have been if the Respondent had acquired the disputed domain name after the Complainant was established.
7. Decision

For the foregoing reasons, the Complaint is denied and the Panel finds the complaint was brought in an attempt at RDNH.

Adam Taylor
Sole Panelist
Date: February 27, 2020

1 The Panel viewed this archive version of the website on the Internet Archive Wayback Machine at www.archive.org in accordance with of WIPO Overview 3.0. This notes that UDRP panels may undertake limited factual research into matters of public record if they consider such information useful in assessing the merits of the case and reaching a decision. Such research includes consulting historical resources to see how the disputed domain name may have been used in the relevant past.


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