Recently, a WIPO Administrative Panel found Charter Communications (Charter) guilty of attempted reverse domain name hijacking. Charter owns eighteen federal registrations for various trademarks involving the word “Spectrum.” Charter attempted to use these trademarks to bully Perfect Privacy, LLC/Sheri K Corwin (Perfect) into transferring ownership of the domain MySpectrumNews.com. Initially, Charter approached Perfect seeking to purchase the domain name and, eventually, negotiations ensued. When Charter became frustrated with these negotiations, Charter threatened and, subsequently, filed a UDRP complaint in an attempt to forcefully obtain ownership of the domain MySpectrumNews.com. Instead of backing down, as Charter likely hoped, Perfect hired Smith & Hopen to fight back and defend Perfect’s rightful and legitimate ownership of MySpectrumNews.com.
Perfect originally registered MySpectrumNews.com in 2011 and subsequently renewed the registration in 2013. Charter did not begin using its SPECTRUM trademarks until 2014. Thus, Charter had no legitimate basis for its cybersquatting claim against Perfect because when Perfect registered and renewed its domain name, Charter’s SPECTRUM marks were not even in existence. This fact, however, did not prevent Charter from falsely alleging that Perfect renewed the domain name in 2015. In a failed attempt to legitimize its baseless accusations, Charter cited to an entry in a WHOIS database listing 2015 as an “update date” for MySpectrumNews.com..
Smith & Hopen responded to Charter’s illegitimate cybersquatting claim with an assertion that Charter’s complaint blatantly mischaracterizes the “update date” as the renewal date in an effort to deceive the Administrative Panel. The Panel sided with Perfect finding that “Complainants’ reliance on the ‘update date’ as the date of Respondent’s renewal was fundamentally wrong.” See WIPO Domain Name Decision: D2017-0040. The Panel further held that Charter engaged in a highly unethical practice of reverse domain name hijacking and that “the Complaint was brought in bad faith and constitutes an abuse of the administrative proceeding.” Id.
Unfortunately, the WIPO Administrative Panel lacks authority to penalize Charter for what the Panel characterized as “a highly improper . . . effort to achieve via the UDRP what [Charter] could not achieve by negotiation.” Id. Thus, Charter emerged from the UDPR proceeding embarrassed and chastised, but financially unscathed. The only financial liability for Charter was its own attorney’s fees, which likely doesn’t even amount to a rounding error in Charter’s accounting books. Perfect, however, despite suffering damages as a direct result of Charter’s unethical and bullying behavior, received no compensation for having to defend its rights against this frivolous complaint.
One would think that Perfect could file a complaint in District Court seeking damages or, at the very least, attorney’s fees based on Charter’s bad faith actions. However, this is not the case under the current law of the United States. A Court in the Northern District of California heard a similar case and held that “there is no independent cause of action for reverse domain name hijacking.” Loblaw Companies Ltd. v. Azimi, 2001 WL 36028016, at *16 (N.D.Cal. 2001). The Court reasoned, there is “no authority providing for a cause of action for reverse domain name hijacking against Loblaw. The ACPA would provide Azimi with a cause of action only if Loblaw had made misrepresentations that caused Azimi to lose her domain name registrations. 15 U.S.C. § 1114(2)(D)(iv). That section does not apply here, however, because Azimi still has her domain name registrations. The Court can locate no other basis for a separate cause of action for reverse domain name hijacking.” Id.
In other words, the Court was not willing to penalize a trademark bully for attempted reverse domain name hijacking. Unfortunately for small companies owning domain name registrations, this ruling is imbalanced and clearly favors deep-pocketed, trademark owners even when they engage in unethical bullying. As a result, morally-questionable trademark owners have a clear path to continue abusing the UDRP process without any real consequences.