Domain Name v. Registered Trademark: Transfer of Domain Name Constitutes New Registration And Trademark Rights Established Before Transfer Results In Transfer For Trademark Owner Complainant

WIPO domain name arbitration under the UDRP provides a thorough analysis of a domain name registrant’s rights and those of trademark owners. In HSBC Finance Corporation v. Clear Blue Sky, Inc., Case No. D2007-0062, Complainant HSBC had registered the trademarks CREDITKEEPER and CREDIT KEEPER (plus design) with the USPTO on July 13, 2004 and November 22, 2005, respectively. The domain name in dispute was initially registered by Peter Bradford on January 24, 2001 – prior to HSBC’s trademark registrations. On December 15, 2004, after HSBC’s trademark had already registered, Respondent Clear Blue Sky acquired the disputed domain name from Bradford for the sum of $48,000.

creditkeeper.gifClear Blue Sky argued that it should benefit from Bradford’s earlier domain name registration because it acquired all rights and interests through a written assignment and denied bad faith registration and use of the domain name. Paragraph 4(a) of the Policy requires that the Complainant prove three elements to obtain a decision that a domain name should be either cancelled or transferred, one of which includes that “the domain name has been registered and is being used in bad faith.” In rejecting Respondent’s “relation back” theory, the Panel found that:

The consensus view of WIPO Panelists is that, while a renewal of a domain name does not amount to registration for purposes of determining bad faith, the transfer of a domain name to a third party does amount to a new registration, requiring the issue of bad faith registration to be determined at the time the current registrant took possession of the domain name.

The Panel also found that HSBC had established a prima facie case of bad faith registration and that Blue Sky had not met its burden of countering with evidence to show its good faith. The Panel noted that the initial registration occurred before HSBC trademark rights were established. But after HSBC launched the domain, the initial registrant posted pay-per-click ads on its parked domain with similar subject matter. And, eight months after HSBC’s launch, Blue Sky purchased the subject domain for a substantial sum of $48,000, presumably, in hopes of selling it to HSBC at a much higher price. As a result, the Panel ordered that the domain name be transferred to HSBC.

PRACTICE NOTE: The Anti Cyber-Piracy Act, 15 U.S.C. 1125(d), allows domain name disputes to also be filed in U.S. Federal District Courts. The advantage of filing a Federal District Court action is the availability of statutory damages of at least $1,000 and not more than $100,000 per domain name. Attorneys’ fees and costs are also available under 15 U.S.C. 1117.