France: Bad Faith Registration Cannot Be Proved Retrospectively

In a recent decision under the Uniform Domain Name Dispute Resolution Policy (UDRP) before the World Intellectual Property Organization (WIPO), a panel denied the transfer of the domain names adgrabber.com and addgrabber.com due to insufficient evidence of the respondent's bad faith at the time of registration.

Background

The Complainant was Adgrabber AB, a Swedish company operating an online platform related to media and marketing purchases.  Created on 8 August 2018, the Complainant was the owner of the Swedish trademark for ADGRABBER, which was filed on 20 August 2018 and registered on 16 October 2018.

The Respondent was Robin Kochauf of Gordito AB, based in Sweden.  He was previously the Chief Technical Officer (CTO) of the Complainant's company and signed a shareholder agreement in 2019.

The Domain Names were and , registered respectively on 10 August and 13 August 2018.  The Domain Name had been used to point to the Complainant's website.  The Domain Name pointed to a parking page.

To be successful in a complaint under the UDRP, a complainant must satisfy the following three requirements:

The Panel first addressed two preliminary procedural issues regarding the language and the applicability of the UDRP in this matter.

Since the Complaint was filed by the Complainant in Swedish and the Respondent was also a Swedish entity, the Complainant requested that the proceedings be in Swedish even though the language of the registration agreement was English.  The Respondent disagreed and insisted on a proceeding in English to minimize interpretational error in the decision.  Given the Respondent's objection and the language of the registration agreement, the Panel denied the Complainant's request.

The Respondent then challenged the applicability of the UDRP in this matter based on the shareholder agreement signed between the Parties, whereby any disputes between the shareholders should be settled in a Swedish court.  The Respondent's argument was not accepted by the Panel due to the fact that the Respondent was already bound by the UDRP via his registration agreement with the registrar.

Identity / similarity

As far as the first limb was concerned, the Complainant contended that the two Domain Names were either identical or confusingly similar (with an additional letter "d") to its Swedish trademark ADGRABBER.  Given the filing / registration date of a trademark is considered irrelevant to the assessment of confusing similarity, the Panel found that the first limb was therefore satisfied.

Rights / legitimate interests

With regard to the second limb, the Complainant submitted that the Respondent was initially instructed by the Complainant to register the Domain Names on its behalf and was supposed to transfer them to the Complainant once the latter had completed all formalities with the Swedish company registration office.  In the meantime, the Complainant had paid all invoices related to the Domain Names and used the Domain Name to point to its own business website.  The Complainant further submitted that the Respondent signed a shareholder agreement in 2019, which specifically stated that the Domain Name belonged exclusively to the Complainant.  After the relationship between the Parties had broken down, the Respondent not only deactivated the Complainant's website and email address associated with the Domain Name but also sent an invoice offering to transfer this Domain Name for SEK 2,500,000.   According to the Complainant, the Respondent was then removed as a shareholder as result of this disloyal conduct.  In response, the Respondent claimed that he had registered the Domain Names as part of starting and running the Complainant's company as a co-owner and he was still a shareholder (in this regard he stated that he had filed a report with the Swedish police regarding the suspected theft of his shares by the Complainant).  The Respondent further explained that was holding the domain names hostage as the Complainant owed him money by stealing his shares.

The Panel noted that the Complainant had paid the registration costs of the Domain Names and used for its business.  The Respondent had not submitted any evidence indicating that he had made preparations to use the Domain Names in connection with a bona fide offering of goods or services, other than the services offered by the Complainant, nor did he prove that he owned any similar trademark rights or was commonly known by the Domain Names.  In particular, the fact that the Respondent had subsequently deactivated the Complainant's website and email account and offered to sell the Domain Name for a large amount of money excluded any legitimate noncommercial or fair use of the Domain Names.  The second limb was therefore satisfied and the Panel found that the respondent had no rights or legitimate interests in respect of the Domain Name.

Bad faith

Regarding the third limb, the Complainant contended that it came up with the name ADGRABBER in the naming process and then instructed the Respondent to file a trademark application in this term on 20 August 2018.  The Complainant therefore claimed that the Respondent, at the time of registration (i.e. between 10 and 13 August 2018), was fully aware that the Domain Names were to be used for the benefit of the Complainant.  The Respondent countered that the Domain Names, unlike the trademark in question, were not registered on behalf of the Complainant but for the purposes of running the business of which he was still a shareholder.

In the Panel's opinion, the circumstances, such as the shareholder agreement signed by the Respondent in 2019, the Complainant's payment of all costs relating to the Domain Names afterwards and the previous use of the Domain Name to point to the Complainant's website, may strongly suggest that the Domain Names had been registered with the common intention that the Complainant would become the registered holder.  However, the Panel pointed out that the Complainant had failed to provide any convincing evidence relating to the two Parties' agreement on the ownership of the Domain Names at the time of registration.  It was only when they signed the shareholder agreement in 2019 that the Respondent expressly agreed to transfer the Domain Names to the Complainant.  Given the lack of material evidence necessary for assessing the Respondent's motives at the time of registration, the Panel held that the Respondent's registration could not be proved to be in bad faith.

Since the Complainant had failed to establish that the Domain Names were registered in bad faith, the fact that they were found by the Panel to have been used in bad faith (as evidenced by the Respondent's refusal to transfer the Domain Names as agreed in 2019 and his subsequent offer to sell to the Complainant for SEK 2,500,000) had no incidence on the outcome of the decision.  The Complaint was therefore denied. 

Comment

This decision illustrates how ambiguity surrounding parties' common intentions at the time of registration may affect a panel's assessment of the third requirement in the sense that the respondent's then-current bad faith cannot be established retrospectively by the circumstances following the registration.  As a result, it is important for start-ups to make sure that they register any related domain names in the name of the company and, if for any reason the registration has to be done in the name of a related party, such as a director or shareholder, enter into a written agreement clarifying the ownership and specifying the conditions (for example the timeline) for transfer of such domain names further to their registration.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.