In a recent Domain Name UDRP decision, Complainant, Hayward Industries, Inc. of Elizabeth, New Jersey, was successful in obtaining a transfer of the domain names HAYWARD.COM and WWWHAYWARD.COM from Respondent, domain investor Chad Wright, aka WebQuest.com, Inc. In the controversial decision, the three-member panel from WIPO included commentary that the value paid for one of the domain names was a factor in determining the third element of a UDRP, namely, registration and use in bad faith.
Complainant sells a variety of swimming pool products under HAYWARD trademark, which has been registered in the United States since 1977. Respondent had purchased the domain names in 2006, paying $20,000 for HAYWARD.COM, allegedly for its value as a geographic domain related to the location of Hayward, California. Hayward is a city of approximately 150,000 located in Northern California. Respondent is the owner of a number of other geographic domain names that provide pay-per-click (PPC) search engines related to the locale. The subject domain name resolved to a parking page with PPC links unrelated to the geographic location and containing links to Complainant's competitors.
Three years after receipt of a demand letter from Complainant in 2006, requesting the transfer of the domain names, Respondent offered the domain name HAYWARD.COM for sale via an online auction in 2009, with an opening minimum bid of $100,000. Respondent claimed that he had rights or legitimate interests in the domain names because "Hayward" is a geographic mark, which also has a number of other meanings and uses, and that PPC sites constitute a bona fide offering of services. Respondent further claimed that he never knew of Complainant, and that Complainant needed to show that it had famous rights or reputation in the name as being associated with Complainant's trade name and trademarks. Respondent also claimed that is was not significant that the parking page was not yet developed in relation to the geographic location.
In the decision, there was no dispute regarding the first element of a UDRP, namely, that the domain names were identical or confusingly similar to the HAYWARD trademark.
In the analysis of the "Rights or Legitimate Interests" element of a UDRP, the Panel agreed with Respondent that "Hayward" is the name of a city in California and that PPC websites are not in and of themselves unlawful or illegitimate. It noted, however, that the websites had yet to be developed in accordance with the claim of Respondent's counsel more than three years earlier that the disputed domain names were related to the geographic location. Because the websites contained links to Complainant's competitors, rather than being used for links solely in connection with the geographic locale, the Panel found that Respondent had no rights or legitimate interests.
The most controversial part of the decision is in regards to whether domain names were registered and used in bad faith. Complainant had specifically alleged that bad faith existed because Respondent acquired the domain names primarily for the purpose of disrupting the business of a competitor. The Panel determined that Respondent was not a "competitor" as contemplated by the UDRP policy, since there was no direct competition. The Panel determined that there was bad faith, however, noting that PPC parking pages built around a trademark that contain or lead to pages with links to trademark owner's competitors (as contrasted with PPC pages built around a dictionary word and used only in connection with the generic or merely descriptive meaning of the word) do not constitute a bona fide offering of goods or services, or a legitimate non-commercial or fair use. The Panel also rejected Respondent's claim regarding the fame of Complainant's mark, stating that "Respondent bears complete responsibility for how the disputed domain names were used and could have taken, but failed to take, steps to ensure that they were not used in connection with goods or services competitive with those offered under the HAYWARD trademark."
In its final analysis, the Panel found it informative, though not decisive, that the Respondent had purchased the domain name HAYWARD.COM for $20,000 and was attempting to sell it for at least $100,000. The Panel claimed that these figures would seem to indicate that Respondent saw some value in that domain name beyond its existence as the name of the city of Hayward, California, and for purposes other than as a PPC parking page which typically would not be expected to earn a return to justify the large investment.
This controversial finding would seem to be adding an additional subjective factor of value paid for a domain name into the determination of whether there is registration and use of a domain name in bad faith for UDRP analysis and decisions. It would appear, however, that the UDRP outcome may have been different if Respondent had developed the domain names into sites that contained PPC links related to the geographic location, within the interim three years after registration, rather than allowing the parking-page sites to remain with links to competitors of Complainant.
Vol. 53, June 2010