Yet another domain name decision underscores the absolute need to make sure all bases are covered when allowing any third party to access and exploit your IP rights.

FlowJo, LLC of Oregon appointed a consultant to market their product in China, among other countries. The consultant registered the domain name “flowjochina.com” and established and operated a website from which to offer FlowJo’s software. When in due course, FlowJo terminated the agreement, the website was taken down but the consultant refused to transfer or cancel the domain name arguing that she was entitled to it because her agreement gave her the right to control the specific manner in which to perform her work. FlowJo, she said, had been fully aware of the registration and she had paid all fees associated with the domain name as well as website maintenance. As a result she argued it was she, not her former principals who was the rightful owner of the disputed domain name, and that it was not the property of Complainant.

She also referred to a blog post regarding a 1993 dispute involving a former employee who secured a domain name with the employer’s consent, which dispute was apparently settled for an undisclosed amount. Despite this, she then went on to argue that the Complainant presented no evidence that she intended to make any profit from the disputed domain name and there was no evidence she had acted in bad faith. She argued that allegations of potential future misuse were simply malicious speculation.

The Uniform Domain-Name Dispute-Resolution Policy (UDRP) exists to resolve disputes concerning allegations of abusive domain name registration and use. It is essential in UDRP proceedings to demonstrate that Respondent actually registered the disputed domain name in bad faith, whatever subsequent use may be made of it. In order to succeed, a complaining party must demonstrate (pursuant to paragraph 4(a) (iii) of the Policy) that “the disputed domain name has been registered and is being used in bad faith“. The text of paragraph 4(a) (iii) is in the conjunctive. A prerequisite for finding against a respondent is that the domain name “has been registered” in bad faith, in addition to being used in bad faith.

In this case, the Respondent registered the disputed domain name further to entering into a contractual arrangement with the Complainant under which she was authorised to perform services as an independent contractor on behalf of Complainant. Those services included marketing and selling Complainant’s products, which included use of its trade mark. The Consultancy Agreement did not expressly place limitations on the Respondent’s use of the Complainant’s trade mark during the term of the agreement. The Respondent had said in her response to the Complaint that the Complainant was aware of and consented to her registration and use of the disputed domain name. Indeed the Complainant had said that it was as a consequence of the termination of the Consultancy Agreement that the Respondent was “no longer licensed or authorised” to use its trade mark or sell its products. The Complainant was certainly aware of Respondent’s website to which the disputed domain name pointed during the life of the Consultancy Agreement.

The Complainant had expressly and by implication acknowledged that the Respondent was contractually authorised to use its trade mark in the disputed domain name; therefore the Decision was that the Respondent registered the disputed domain name in good faith. As the disputed domain name was not registered in bad faith, the Respondent was entitled to keep it.

It should be noted here that because the domain name was not registered in bad faith it would make no difference to the UDRP decision whether the domain name had subsequently been used in bad faith. This is unlike the Nominet Dispute Resolution Service (DRS) policy where the complainant needs to show that a domain name is an abusive registration in the hands of the respondent; meaning that in Nominet proceedings ‘bad faith registration’ or ‘bad faith use’ would suffice.

It is however more important to ensure that matters do not get to that point. Any agreement that purports to allow third parties to use your IP rights should be properly vetted to make sure that it says what you mean and means what you want to say.

Eric Ramage is a Fellow of The Chartered Institute of Trade Mark Attorneys, and has a Higher Courts Litigation Certificate from the Intellectual Property Regulation Board. He has substantial experience of internet issues dating back to 1999 when he was invited to serve on the Policy Advisory Board of the UK domain name registry Nominet, of which he was Chair between 2006 and 2010. He routinely lectures on domain name recovery.

If you wish to discuss any of the issues raised above, please contact Eric Ramage – Of Counsel, or any member of the Edwin Coe Intellectual Property team.

Please note that this blog is provided for general information only. It is not intended to amount to advice on which you should rely. You must obtain professional or specialist advice before taking, or refraining from, any action on the basis of the content of this blog.

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