Under the Uniform Domain Name Dispute Resolution Policy (UDRP), there can be a relatively fine line between the permissible use of an acronym as a domain name and the impermissible use of a trademark. In CEAT Limited v Vertical Axis Inc (Case D2011-1981), a split decision by a very experienced three-member panel has highlighted the vagaries and fact-dependent nature of these cases.

The complainant, CEAT Limited, is a tyre manufacturer based in India. It owns:

  • a number of trademarks consisting of, or including, the term 'CEAT', dating from as early as 1961; and
  • a number of domain names incorporating its CEAT mark which postdate the disputed domain name by several years.  

The respondent, Vertical Axis Inc, is a Barbados-registered domain name holding company. It submitted that it registered 'ceat.com' in 2001 as part of a volume registration programme of acronyms as domain names and subsequently used it as a pay-per-click parking page which included an offer to sell the domain name.

The majority of the panel found that the respondent had no rights or legitimate interests in the domain name, and was making an improper use of the domain name to divert internet traffic to its website. The majority held that it was not legitimate to register an acronym as a domain name and to use it for a pay-per-click parking page in circumstances where the acronym was also a trademark, had no descriptive meaning and was not used for related sponsored links.

Although accepting that the respondent was a domain name speculator and used automated processes for registering acronyms and domain names, the majority found that the respondent could not be “wilfully blind” and that it was incumbent upon it to check that it was not illegitimately using a trademark. The fact that the respondent hid its identity behind a privacy service when registering the disputed domain name, with no apparent reason for doing so, and that the website featured an offer to sell the domain name, confirmed the majority’s view of the respondent’s registration and use of the domain name in bad faith.

The dissenting panellist found on the facts that the disputed domain name was in common usage as an acronym and abbreviation and that, during the 10 years since the domain name had been registered, there was no evidence of “targeting” of the complainant by the respondent. Rather, the respondent had used the domain name to promote legitimate and non-competing services through pay-per-click links. Finding as a matter of fact that the respondent’s reputation at the point of registration was not substantial outside India, the dissenting panellist had difficulty in seeing why the respondent would have, or should have, been aware of the complainant and proceeded on the basis that “actual” and not “constructive” notice is required under the UDRP.

The acknowledgement by both parties that 'CEAT' was an acronym and the respondent’s use of it for activities unconnected with the complainant confirmed the dissenting panellist’s view that there was no violation of the complainant’s trademark rights or breach of the UDRP. Moreover, he noted that the use of a privacy shield cannot by itself prove something as significant as bad faith. Finally, the dissenting panellist underlined that a general offer to sell a domain name does not amount to bad faith under the UDRP – it is only an intention to sell to a complainant trademark owner or its competitor that is indicative of bad faith. As a result, he found that the respondent did have legitimate interests in the disputed domain name and had not acted in bad faith.

In broad principle, an acronym should be available to anyone for use in top-level domain names, unless there is evidence under the UDRP that it is being used to trade off someone else’s goodwill, or has been registered and is being used in a manner which otherwise imputes bad faith. Arguably, there is no reason why the use of an acronym for entirely unrelated links on a pay-per-click parking page should, all other things being equal, amount to an illegitimate use under the UDRP. Although it is always risky to comment on a panel’s determination in this kind of case without having seen the evidence exactly as presented, neither does there seem to be a strong case that the respondent was taking advantage of the complainant’s trademark and had registered and used the domain name in bad faith. 

Certainly, the dissenting panellist was very firmly of the view that the respondent was most unlikely to have been aware of the complainant at the date of registration and was not targeting the complainant. Although the use of a privacy service, or the use by a domain name broker of a sale notice, may in some circumstances be additional indicia of bad faith, they do not on their own support such a finding. He also noted the complainant’s unexplained delay in bringing its complaint (some six years after registering its various other 'CEAT' domain names) which suggests that, at that time, it had either not been concerned about the respondent’s activities, or did not consider that the respondent’s registration and use amounted to bad faith. 

Source: WTR Daily