201: A Spase.com UDRP Odyssey
A rare case of UDRP complaints filed against a domain name challenged in prior UDRP proceedings offers important lessons about establishing a domain registrant’s bad faith, as well as the availability of rehearings under the Policy.
Complainant Sahil Gupta owns and operates a business named Spase, Inc. that converts photographs into 3D models, and claims common-law rights in the SPASE trademark dating to 2019. Gupta filed a series of unsuccessful UDRP complaints against the <spase.com> domain, which was created on February 3, 2005.
The World Intellectual Property Organization (“WIPO”) UDRP
In the fall of 2020, Gupta filed a UDRP complaint at WIPO against the <spase.com> domain, asserting bad-faith registration and use. As evidence of bad faith, Gupta pointed to the domain’s use for a pay-per-click website. The WIPO Panel denied the complaint because respondent Mrs. Jello LLC had been using the domain for fourteen years before Gupta launched his business. Because the UDRP requires both bad-faith registration and use, the Panel concluded Mrs. Jello LLC could not have registered the domain with an intent to target trademark rights that did not exist. For the same reason, the WIPO Panel also found Gupta had committed reverse domain name hijacking (“RDNH”).
The Forum UDRP
Undeterred, Gupta promptly filed a second UDRP complaint, this time with the Forum. Unlike other domain dispute policies (such as the DRS Policy, which covers “.uk” and “.co.uk” domain disputes and expressly allows for reexaminations), the UDRP contemplates no mechanism for appeals other than “submitting the dispute to a court of competent jurisdiction.” That said, some UDRP panels have found that rare, extenuating circumstances may arise where consideration by a subsequent panel may be appropriate, such as when the original case was decided expressly on a “without prejudice” basis, or when a party can identify:
(1) legally relevant developments since the original decision;
(2) an objective breach of natural justice or due process;
(3) serious misconduct in the original case (such as perjured evidence) that influenced the outcome; or
(4) new material evidence reasonably unavailable to the complainant during the original case.
Here, Gupta presented new evidence that had not been available during the original case: the domain was being used to distribute malware. The Forum Panel agreed that such use constitutes bad faith, but the problem remained that the domain name had been registered before Gupta’s rights in his asserted mark had accrued. Accordingly, the Forum Panel not only found the domain had not been registered in bad faith, but also that Gupta had yet again committed RDNH.
The Arab Center for Dispute Resolution (“ACDR”) UDRP
Not discouraged by two findings of RDNH, in January 2021, Gupta filed a third UDRP with the ACDR. This time, asserting three grounds of “new material evidence” that he claimed were unavailable in the original proceedings: (1) the domain name’s WHOIS record had been updated during the Forum UDRP proceeding, and reflected the use of a new privacy shield, suggesting a brand new registration, rather than a mere renewal of the old one; (2) the domain name was used to distribute malware; and (3) the domain name’s original registration violated the registered trademark rights of third-party Geotech Computer Systems.
The ACDR Panel agreed that if the change to the WHOIS record reflected a new registration, rather than a renewal of the old one, that would merit reconsideration, given the use of the domain to distribute malware. But because the registrar confirmed that the domain had simply been renewed—i.e., the chain of ownership had been unbroken—the date the ACDR Panel used to evaluate Mrs. Jello LLC’s bad-faith registration was the domain’s creation date in 2005. Once again, therefore, because the domain had been registered before Gupta’s rights had accrued, bad faith was not established. As for Gupta’s two other arguments, the ACDR Panel found Gupta could have obtained the evidence supporting those arguments in the prior proceedings, and they therefore did not justify reconsideration.
Notably, the ACDR Panel did not find Gupta had committed RDNH because in this case, one of Gupta’s new arguments actually addressed the key flaw in the prior cases—the possibility that, despite the domain name’s 2005 creation date, it had been recently acquired by a new registrant, and that the date to assess bad-faith registration should therefore post-date Gupta’s trademark rights.
These proceedings emphasize the difficulty of challenging an adverse UDRP decision anywhere other than litigation. They also highlight the more important point that bad-faith use does not necessarily equal bad-faith registration. Only in certain circumstances can a UDRP complainant prevail where the respondent registered the domain before the complainant’s trademark rights accrued. For example, if a complainant can show the domain registrant knew about complainant’s prospective trademark rights (through a trademark application, or contemporary news reports) and registered the domain to capitalize on them, panelists may find bad-faith registration. Otherwise, even where compelling evidence of bad-faith use exists, if complainants cannot establish bad-faith registration, they are likely to fail. Finally, these proceedings suggest that when seeking reconsideration of an adverse UDRP decision, any new evidence presented should not only have been unavailable in the prior proceeding, but also, at minimum, address the flaws found in the original.
The proceedings are: Sahil Gupta v. Michal Lichtman / Domain Admin, Mrs Jello, LLC, Case No. D2020-1786 (WIPO Sept. 15, 2020); Spase, Inc. v. Domain Admin / Mrs Jello, LLC, Case No. FA2011001921922 (Forum Dec. 23, 2020); and Spase, Inc. v. Domain Admin/Mrs Jello LLC, Case No. A2021-0021 (ACDR Feb. 21, 2021).