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October 29, 2010 / Nate Harris

Sour relationships and hijackers: Two More Reasons to Ditch Octogen

The domain community is abuzz over a recent groundbreaking decision– Jappy GmbH v. Satoshi Shimoshita (WIPO Case No. D2010-1001), the first three-member panel decision to endorse the Octogen “bad faith” analysis. In Octogen Pharmacal Company, Inc. v. Domains by Proxy, Inc. / Rich Sanders and Octogen e-Solutions (WIPO Case No. D2009-0786), the Panel pointed out that every registrant of a domain name is required to agree to the following provision:

By applying to register a domain name, or asking us to renew a domain name registration, you hereby represent and warrant to us that … (d) you will not knowingly use the domain name in violation of any applicable laws or regulations. It is your responsibility to determine whether your domain name infringes or violates someone else’s rights.

Accordingly, bad faith use of the domain violates the agreement entered into at the time of registration. Therefore, the argument goes, this bad faith use retroactively demonstrates bad faith registration.

Several recent decisions (such as the three-member panel in Burn World-Wide, Ltd. d/b/a BGT Partners v. Banta Global Turnkey Ltd. (WIPO Case No. D2010-0470)) have repudiated Octogen, leading many to consider the concept of “retroactive registration” dead. Obviously, Jappy makes clear that this is not the case.

There are several reasons to object to the Octogen/Jappy approach. First, it reads the “registration” requirement right out of the Policy. Second, it goes against the most basic concepts of contract law to say that a violation of an agreement creates fault or intent at the time of the execution of the agreement. If that were the case, then why can’t you get damages in a contract action back to the time the agreement was signed?

Those reasons, and many others raised by panelists and commentators, are good ones. However, I think there’s another compelling reason to require proof of bad faith at the time of registration: it serves an important gate-keeping  role in limiting the UDRP to the type of cases it is equipped to handle.

One type of case it would fend off is the “sour relationship” situation where someone (say, an employee) registers a domain in his own name, but on behalf of another. Later on, the employee becomes disgruntled and takes the domain when he leaves the company. Though smart panels (like the one in Bsecure Technologies, Inc. v. Michael Cadenhead (Nat. Arb. Forum Claim No. 1339191)) recognize that the UDRP flounders when it strays from “arms length” disputes, other panels may be tempted to wade into a dispute like this, which is a mistake. This situation often requires the Panel to evaluate the credibility of the parties and guess at the arrangement between the parties at the time of registration. This is hard (if not impossible) to do when the decision is being made–as all UDRP decisions are–on the pleadings and accompanying evidence alone. In this case, there is no dispute that the domain was registered in good faith. Thus, if you keep the requirement of bad faith at the time of registration, you keep this case away from the UDRP.

Another type of complaint that is avoided by a true bad faith registration requirement is the “domain hijacking” situation. This is where an adverse party seizes control of a website owned by someone else (by stealing a password, for example). Certainly, this type of activity should be redressable, but not by the UDRP. First, the hijacker never agreed to be bound by the UDRP, which, though it may not earn the hijacker much pity, nonetheless raises Due Process concerns. Second, this factual situation, like the “sour relationship” situation, often raises complicated factual issues that makes it hard to decide on the pleadings. For example, in Al-Durra Food Products Company v. Aldurra Group (WIPO Case No. D2010-1226), the dispute hinged on a dispute over whether the domain had been sold from the complainant to the respondent. The Panel there decided the dispute, though I don’t see how it was qualified to do so. If you’re a UDRP Panelist deciding contract issues, you’ve probably gone too far. Requiring bad faith registration keeps this case away from the UDRP as well, since there was never a “registration” by the respondent in the strict sense of the word.

In summary, it’s a good rule of thumb–both in life and in the UDRP–to avoid sour relationships and hijackers. By abandoning Octogen, UDRP panelists can do just that.

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3 Comments

  1. Bret Moore / Oct 29 2010 8:07 am

    Great points, I concur. I’ve seen several panels reject the Octogen reasoning lately, so maybe a consensus is building (slowly).

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