The Brief Case - February 2012

Feb/15/12| The Brief Case - February 2012 Arbitration Panel Applies the New CDRP and Orders Domain Name Transfer by Chase Marshall :: Legal Staff, Sedo.com

The Canadian Internet Registration Authority (CIRA), the sole registry for .CA country code Top Level Domains (ccTLDs), recently released a new version of its Domain Name Dispute Resolution Policy (CDRP), effective August 22, 2011. Changes to the CDRP were aimed at making the Policy more consistent with the broader Uniform Domain Name Dispute Resolution Policy (UDRP). One of the most notable changes is the expansion of factors for legitimate interest and bad-faith registration.

These changes were first employed in a dispute between Glen Raven, Inc. (the Complainant) and Tomislav Kotarac (the Registrant) over the domain name sunbrella.ca. Glen Raven, a maker of woven fabrics for a variety of uses, obtained in 1972 a Canadian trademark registration for the term “Sunbrella.” Glen Raven’s principal website for their Sunbrella fabric line is at sunbrella.com; the company also owns sunbrella.net, sunbrella.org, and sunbrella.info, all of which previously redirected users to sunbrella.com (they now redirect visitors to glenraven.com, Glen Raven’s corporate website).

On June 6, 2011, Tomislav Kotarac registered sunbrella.ca. In his Response to Glen Raven’s Complaint, and in defense of his registration, Kotarac stated that he “registered [sunbrella.ca] upon conceiving an idea as a brand name for a new consumer product.” He argued that he “is an entrepreneur with significant experience in the consumer package goods industry.” Kotarac also claimed that he planned to register the mark “Sunbrella” in association with his “new consumer product,” but no registration had been filed. However, he didn’t indicate why he chose the term “Sunbrella” or what type of product he planned to develop.

Under the CDRP, like the more well-known UDRP, Glen Raven had to prove three elements in order to prevail on its Complaint:

1. The Registrant’s .CA domain name is confusingly similar to a mark to which the Complainant had rights prior to the date of registration, and the Complainant continued to have those rights;
2. The Registrant had no legitimate interest in the domain name; and
3. The Registrant registered the domain name in bad faith.

For the first element, the arbitration panel easily decided that sunbrella.ca was identical, and therefore confusingly similar, to Glen Raven’s “Sunbrella” trademark.

As for the second element, the CDRP provides six circumstances, any of which, if proved, would demonstrate that Kotarac had a legitimate interest in the domain name. Boiled down, these grounds of legitimate interest are that use of the domain by the registrant is either (1) in good faith or (2) non-commercial or that the domain name is (3) a clearly descriptive phrase, (4) a generic term, (5) an individual’s name, or (6) a geographical name. Additionally, the new version of the CDRP allowed the arbitration panel to look beyond these six circumstances to find legitimate use.

However, after reviewing all evidence, the panel concluded that Kotarac did not have a legitimate interest in sunbrella.ca. Kotarac seems to have been handicapped by the lack of evidence he provided, only indicating that he planned to develop a product and market it under the name “Sunbrella.” This was not enough to persuade the panel.

Having determined that sunbrella.ca is confusingly similar to the mark “Sunbrella,” and that Kotarac had no legitimate interest in the domain name, the panel moved to the third factor: proof of bad faith. Under the previous CDRP, arbitration panels were limited to only three factors when finding bad faith: (1) the Registrant acquired the domain name primarily to profit from its sale to the Complainant or a competitor; (2) the Registrant engaged in a pattern of registering other domain names that were marks; or (3) the Registrant acquired the domain name primarily to disrupt the Complainant’s business. If the Registrant’s behavior did not fit one of these three scenarios, registration was not in bad faith.

The revised CDRP, however, includes a new fourth factor, which states that there is a showing of bad faith if “the registrant has intentionally attempted to attract, for commercial gain, internet users to the registrant’s website or other online location, by creating a likelihood of confusion with the complainant’s mark.” Additionally, a panel is free to find bad faith outside of these four factors if evidence supports it.

In this case, the panel found that Kotarac did register the domain name in bad faith under the fourth factor; he intended to develop a new consumer product, which the panel inferred was for commercial gain. This commercial gain, in combination with the likelihood of confusion caused by sunbrella.ca, was enough to satisfy the fourth bad faith factor. In the end, Kotarac was ordered to transfer the domain to Glen Raven.

The expansion of the legitimate interest and bad faith factors of the CDRP further aligns it to the more widely-used UDRP. Though some of the specific language remains different, the analysis of domain name disputes under the CDRP is now more similar to analyses under the UDRP. This similarity provides for a more uniform resolution of domain name disputes across international boundaries and across more ccTLDs.