CONSTRUCTIVE KNOWLEDGE IN UDRP ACTIONS

IVAN HOFFMAN, B.A., J.D.


        In “Should I Register My Trademarks?” I described the many benefits to registration.  Among these benefits, having a registered trademark affords the owner the right to claim that a party who registered a domain name using the registered mark had at least constructive knowledge of that mark.  This is one of the key elements in establishing a case under the Uniform Domain Name Resolution Policy (“UDRP”) since it is incumbent on a mark owner to show that the domain name was registered and is being used in bad faith.  (See the many other articles on the above link regarding these issues.)

        Let me explore some of the many legal wrinkles to the concept of such knowledge in this article.  For the sake of clarity, the owner of a mark shall be called “Complainant” and the domain name registrant the “Registrant.”

“Constructive” Knowledge

        There are many instances in the law where a party must be deemed to have known about a set of facts to establish a civil cause of action.  Since it is often very difficult to prove actual knowledge, the law has established many instances where the law presumes such knowledge unless the party charged with such knowledge can rebut such presumption.  Such presumed knowledge is called “constructive” knowledge.

        One such instance is expressly provided for in the United States trademark laws.  15 U.S.C., section 1072 provides:

Registration as notice.  Registration of a mark on the principal register provided by this Act or under the Act of March 3, 1881, or the Act of February 20, 1905, shall be constructive notice of the registrant’s claim of ownership thereof.
        15 U.S.C. §1115 goes on to state, in part.
Registration as evidence of right to exclusive use; defenses

(a) Any registration issued under the Act of March 3, 1881, or the Act of February 20, 1905, or of a mark registered on the principal register provided by this Act and owned by a party to an action shall be admissible in evidence and shall be prima facie evidence of the validity of the registered mark and of the registration of the mark, of the registrant’s ownership of the mark, and of the registrant’s exclusive right to use the registered mark in commerce on or in connection with the goods or services specified in the registration…. [emphasis added]

        This means that the fact of registration itself provides sufficient evidence (“prima facie”) of a Complainant’s rights in the mark, leaving it up to the Registrant to rebut such evidence.

        And, under section (b) of the above section 1115, if the mark has become incontestable and appropriate papers are filed to establish such incontestability, such “prima facie” evidence becomes “conclusive,” meaning that the Registrant cannot rebut the rights of the Complainant in the mark.

        The sum of the above provisions means that in trademark actions including UDRP actions, presentation of a valid registration certificate and, if appropriate a declaration of incontestability, can possibly be used to establish a key element for the Claimant’s burden of proof.   (Read “Burden of Proof in UDRP Actions”).  However, such constructive knowledge is not absolute and depends upon the facts of the given situation.

The “Wrinkles”

        Some UDRP actions have cited not only the fact of registration but the use of the mark on the part of the Claimant as providing a presumption that if the Registrant did not actually know of the existence of the mark, then the Registrant should have known.  Intentionally not looking does not excuse a Registrant under the theory of constructive knowledge.

        For instance, in Dama SpA v. NAK Group Inc., WIPO Case No. D2001-1203, the panel stated:

The strength of Complainant’s trademark rights in the PAUL & SHARK YACHTING® trademark is reinforced by its continuous and exclusive use of the mark since 1977, the fact that the Complainant has invested millions of dollars in advertising and promoting the mark, and the fact that Complainant has realized substantial revenues from sales of products and services under the mark.
        And in National Hockey League And Lemieux Group Lp v. Domain For Sale, WIPO Case No. D2001-1185, the panel said:
(iv) the Respondent should have been well aware of the NHL family of trade marks when he registered his trade marks. See Ticketmaster Corporation. v. Spider Web Design, Inc., WIPO Case No. D2000-1551. The Respondent’s constructive knowledge of the Complainants’ marks establishes Respondent’s registration of the contested domain name as a patently illegitimate attempt to misleadingly divert NHL and Pittsburgh Penguins fans;
        In RRI Financial, Inc., v. Ray Chen, WIPO Case No. D2001-1242, it was held:
The Sole Panelist finds that Respondent had constructive notice of the RED ROOF Trademarks, as a trademark search on the date of the registration of the Domain Names would have revealed Complainant’s registrations the United States. Actual or constructive knowledge of the Complainant’s rights in the Trademarks is a factor supporting bad faith.
        Finally, in Thermo Electron Corporation v. Sven Camrath and Joachim Camrath, WIPO Case No. D2001-1013, the panel stated:
The circumstances enumerated in paragraph 4(b) of the Policy are not exhaustive: bad faith registration and use may be established in other ways. In SportSoft Golf, Inc. v. Hale Irwin’s Golfers’ Passport (NAF case FA94956) a finding of bad faith was made where the respondent “knew or should have known” of the registration and use of the trade mark prior to registering the domain name.
        However, given that the Internet is a worldwide medium, is a Registrant charged with the responsibility to know or is a Registrant to be burdened with the mantle of constructive knowledge of every mark in all countries?  In essence, the question is answered on a case by case basis.

        In Red Nacional De Los Ferrocarriles Espanoles v Ox90, WIPO Case No. D 2001-0981, the panel stated:
 

Thus, the question here is whether bad faith may be shown by the Respondent’s convenient failure to know, find out, or realize that a domain was a strong, well known trademark in a foreign country, without imposing on Respondents a general obligation to do worldwide trademark searches or extensive research into the history of the Domain Name and its prior owners.

This Panel wishes to make clear that it does not believe the UDRP ordinarily imposes on a typical Respondent any affirmative obligation to make extensive trademark or other factual searches, but it does believe that a Respondent cannot ignore the obvious. Respondent, however, is not an ordinary, unsophisticated Internet user, but an entity and persons who develop websites, own and have registered a number of domain names, and who demonstrated from their own comments that they know how to find expiring domain names, how to determine how they have been used in the past, and where this commercially valuable information exists. They seem, however, to believe they have no legal obligation to look at what they have available before they act, and that they can claim innocence of facts obvious to anyone with their sophistication in this area of business.

The Panel holds that where there is an intentional registration of a domain name by one with obvious reason to believe that it might be the trademarked name of another, combined with an intentional or reckless failure to verify whether that is the case and without making even the most basic inquiry, constitutes registration of that domain name in bad faith. [emphasis added].
On The Other Hand

        In T. Rowe Price Associates, Inc. v. J A Rich, WIPO Case No. D2001-1044, the panel looked at the facts and found that the registration was not in bad faith because of the particularities of how the domain containing a trademarked phrase was used.  It stated:

Based on the evidence presented, it seems more likely than not that Respondent has registered and used the Domain Name to attract Internet traffic based solely on the appeal of a commonly used descriptive phrase, as suggested by the evidence of third party use of “Invest With Confidence.” Although the mark is registered, it does not appear to be famous or highly distinctive. When used by Complainant, it usually appears in connection with Complainant’s well-known name “T. Rowe Price.” Respondent has done nothing to suggest any connection with T. Rowe Price or competing investment services, beyond use of a Domain Name that happens to correspond to Complainant’ mark, as well as to the names, marks or slogans of others. The suspicious transfers of the Domain Name are inconclusive evidence of bad faith and in themselves do not seem to be an act of cybersquatting. There is no indication that Respondent is engaged in domain name trafficking. Setting aside conjecture, the undisputed evidence presented shows that Respondent has adopted and used the Domain Name as a tool to direct Internet users to books about investments. The ordinary descriptive meaning of the Domain Name is apt for that purpose, and use in that manner is not bad faith.
        And in Alfabet Meta-Modeling AG v. Henrik Rambe, Case No. D2001-1205, it was stated:
However, the word “alfabet” is indeed, as claimed by the Respondent, a generic term in Respondents home-country, being the Scandinavian word for “alphabet”. As pointed out by the Complainant, this does not preclude that the word can be protected as a trademark for goods and services for which it is not descriptive. On the other hand this means that the Registrant of a domain name incorporating a generic term may well have registered and even used the domain name based on an bona fide assumption that the term incorporated in the domain name is generic and not reflective of a protected mark. In such cases the Registrant can be deemed to have a legitimate interest in the domain name as required in Paragraph 4 (a)(ii) and Paragraph 4(c).
..
In addition, Complainant has not put any evidence before the Panel that could indicate otherwise, such as proof that the mark is in use and is well-known in Sweden.
The Conclusion

        There are many other “wrinkles” and “on the other hands” that prevent the establishment of any clear cut “line of case.”  Instead what we find is a growing body of rule and exception, all determined on an ad hoc, case by case basis.

        Thus, the best approach is to seek to have the largest envelope of legal protection for one’s rights as possible.  The greater one’s vision about the seemingly infinite possibilities to come, the better.  Combining the 2 notions, the lesson to be drawn is that it is clearly better to have registered trademarks than not.  Thus, REGISTER YOUR MARKS.  In addition, carefully documenting your worldwide marketing of the mark may also enable a Complainant to prevail in these UDRP actions.

        And mostly, the Internet continues to teach that the “box” has no sides.  Don’t be left within boundaries that you have created for yourself.

© 2002 Ivan Hoffman

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This article is not intended as a substitute for legal advice.  The specific facts that apply to your matter may make the outcome different than would be anticipated by you.  You should consult with an attorney familiar with the issues and the laws.
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No portion of this article may be copied, retransmitted, reposted, duplicated or otherwise used without the express written approval of the author.

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