Proving bad faith in URS proceedings: when things go wrong

URS (“Uniform Rapid Suspension System”)?was introduced in 2013 to supplement the existing UDRP (Uniform Domain Name Dispute Resolution Policy).?

URS is faster and cheaper than UDRP and is designed only for clear-cut cases of cybersquatting.?

The?URS?standard?of proof?is “clear and convincing”, whereas?the standard of proof in UDRP is “balance of probabilities” (“more likely than not”).

For complainants in URS proceedings to prevail they should provide evidence that leaves “no genuine issue of material fact”.

Two recent Forum URS decisions once again demonstrate problems that complainants face in proving bad faith.

Gorman Brands Pty Ltd et al. v. bao shik,?Claim Number: FA2212002022855, domain name?<gormanau.store>, decided on December 22, 2022, link to the decision https://www.adrforum.com/DomainDecisions/2022855D.htm

Complainant succeeded in proving the first 2 URS elements but failed to establish the third element.

Complainant argued that “Respondent registered the disputed domain name to redirect customers to a website which mimics Complainant’s legitimate website and uses photographs taken from Complainant’s legitimate website, with the aim of scamming consumers into thinking they are purchasing Complainant’s genuine products; the disputed domain name previously redirected to a scam website accessible at a third domain name <auflagship.store>” and “after operating the disputed domain name for a short period, in approximately the last 3-4 business days, Respondent appears to have taken the website down and halted the redirection. An inactive domain name can be an indication of bad faith registration and use”.

The problem was that the website at the disputed domain name was inactive on the date of Examiner’s determination and “Complainant has failed to satisfy its burden of proving that the resolving website was originally a scam site, or that it purported to offer unauthorized versions of Complainants products”.

This was not the end of the story though. Complainant argued that passive holding of the domain name “can be an indication of bad faith registration and use”.

The Examiner disagreed and noted that “Complainant does not allege – much less provide evidence to show – that its mark is famous or well known. It asserts that it is not possible to conceive of any actual or contemplated active use of the domain name by Respondent that would not be illegitimate. Such a bald conclusory statement might be acceptable in a UDRP proceeding, where the standard of proof is the balance of probabilities, but it is not sufficient in the instant proceedings, which require clear and convincing evidence”.?

Gorman Brands Pty Ltd et al. v. fedc qw,?Claim Number: FA2212002022832, domain name?<gormansale.store>, decided on December 30, 2022, link to the decision https://www.adrforum.com/DomainDecisions/2022832D.htm

The facts of this case were nearly identical with the?<gormanau.store>?dispute.

Complainant succeeded on the first two elements but failed to prove the third one.

The Complainant’s bad faith allegations were the following:

-???????Respondent registered and used the disputed domain name to redirect customers to a website which mimics the Complainant’s website and uses its photographs, with the aim of scamming consumers into thinking they are purchasing genuine products;

-???????The disputed domain name previously redirected to a scam website accessible at the third party domain name;

-???????Respondent appears to have taken the website down and halted the redirection, yet an inactive domain name can be an indication of bad faith registration and use.

The Examiner concluded on the bad faith element:?

“The Complainant, however, has failed to provide any evidence in support to its allegations that the disputed domain name has been used in the way described above. At present, the disputed domain name is inactive. Previous URS decisions have held that the passive holding of a domain name could support, by clear and convincing evidence, that a domain name is being used in bad faith. However, passive holding does not?per se?lead in a finding of bad faith use.?The Complainant has not provided evidence that the Respondent used the disputed domain name in bad faith. Furthermore, the Complainant has not established that the Respondent’s nonuse of the disputed domain name equals bad faith use under the passive holding doctrine, first set out in?Telstra Corporation Limited v. Nuclear Marshmallows?and confirmed ever since. In particular, the Complainant has not provided any information or evidence regarding the degree of distinctiveness or reputation of the GORMAN Mark.”

Failure to provide evidence of alleged infringing activity (e.g. allegations of abusive use) is very often fatal to complainants, see e.g. a URS case decided by another URS provider “MFSD”,?URS DISPUTE No. 38D38101, disputed domain name <SUPERGANEGOZIO.ONLINE>, decided on September 29, 2020,?where Complainant’s failure resulted in URS denial, see?https://urs.mfsd.it/system_data/source_pdf/38D38101.pdf?.

Lessons from recent URS denials

Both URS cases demonstrate challenges in URS proceedings for complainants when it comes to the “clear and convincing” standard.

The same complainant won an earlier URS dispute with the Forum over the domain name?<gormanonline.store>?(see?Gorman Brands Pty Ltd et al. v. fedc qw,?Claim Number: FA2211002021244, decided on December 14, 2022).?

However, in that earlier dispute Complainant seemed to have provided actual proof of bad faith – screenshot of a website.

In the two later URS cases described above, Complainant failed for two reasons:

1)????It failed to provide evidence of the alleged infringing use (“website which mimics Complainant’s legitimate website”) and yet

2)???The first failure would not have been fatal had Complainant successfully argued the “Telstra” principles application to its cases. However, arguing that passive holding/lack of active use is a proof of registration and use in bad faith is always tricky even in the UDRP proceedings let alone URS disputes with a higher standard of proof.

“Telstra” has somewhat limited application and we will talk about it in one of the next articles.

Complainants and their counsels need to be aware of the evidentiary burden in domain disputes and provide as much relevant evidence as possible. When it comes to alleged infringing use of a domain name (e.g. phishing or selling counterfeits), mere allegations are never sufficient. You need to provide concrete evidence such as screenshots, email communication, etc..?

Keep this in mind before sending cease and desist notices to the alleged infringer (or an intermediary) and before any evidence can be taken down.