Thursday, July 5, 2001
ISSN 1535-5292
News
Trademarks 'Information and Belief' Not Sufficient for Supporting Finding of No Rights in Domain

An affidavit stating "on information and belief" that a domain name registrant is not using the domain name for any legitimate business purpose is not sufficient evidence to support a finding that the registrant has no rights nor legitimate interest in the domain name, an arbitrator of the National Arbitration Forum ruled June 7 (Cottonsmith LLC v. Resource Services Ltd., NAF, Claim No. FA0104000097096, 6/7/01).

The arbitrator also found that a one-time offer to sell a domain name registration to a complainant does not by itself support a finding of bad faith registration and use of the domain name.

The respondent, Resource Services Ltd. of Costa Mesa, Calif., registered the domain name cottonsmith.com with Network Solutions Inc.

The complainant, Cottonsmith LLC of Los Angeles, brought this action under the Uniform Domain Name Dispute Resolution Policy adopted by the Internet Corporation for Assigned Names and Numbers in 1999. All domain names registered with ICANN-accredited registrars are subject by contract to the UDRP.

The UDRP authorizes an accredited administrative arbitrator to transfer or cancel a domain name registration if the arbitrator finds that the domain name is identical or confusingly similar to a mark in which the complainant has rights, if the registrant has no rights nor legitimate interest in the domain name, and if the domain name was registered and used in bad faith.

Arbitrator Irving H. Perluss found that the complainant had failed to meet its burden in showing that the respondent had no rights nor legitimate interest in the domain name.

Paragraph 4(c)(i) of the UDRP states that a respondent has demonstrated that it has rights or legitimate interest in a domain name if it can show that before notice of the dispute, the respondent has used or demonstrably prepared to use "the domain name or a name corresponding to the domain name in connection with a bona fide offering of goods or services."


Affidavits Were Flat Contradictions

The respondent submitted an affidavit that stated that Resource Services had used the domain name as well as the mark Cottonsmith in connection with its business. The complainant submitted evidence of the existence of companies using the name Cottonsmith in the form of invoices and also submitted affidavits.

The complainant's affidavits, however, said that "[o]n information and belief, [the respondent] is not using the domain for any business purpose. [The respondent] is merely holding up the registration to prevent COTTONSMITH from using it to develop an internet website to service it's [sic] customers on a broader scale."

Such an affidavit, based on information and belief, could not be used as evidence to support the complainant's contentions, the arbitrator said, quoting from Star Motor Imports Inc. v. Superior Court, 88 Cal. App. 3d 201, 151 Cal. Rptr. 721 (1979): "An affidavit based on 'information and belief' is hearsay and must be disregarded."

Additionally, the arbitrator found that the complainant had failed to meet its burden in showing that the respondent had registered and used the domain name in bad faith.

The complainant submitted a letter from the respondent to the complainant offering to sell the domain name registration to the complainant. Paragraph 4b(i) of the UDRP says that "registering a domain name primarily for the purpose of selling it for valuable consideration in excess of out of pocket costs is evidence of bad faith."

However, the arbitrator, quoted from a treatise on trademark law, saying that "the mere offer to sell a domain name to a mark owner" is not sufficient for a finding of bad faith. In addition, the UDRP requires that such a finding be based on a pattern of such behavior, which had also not been established.

The complainant was represented by Linda Kohler of Big Dogs Legal Department. The respondent was represented by Stephen H. Sturgeon.

The text of the arbitrator's opinion is available at the Web site of the National Arbitration Forum, http://www.arbforum.com/domains/decisions/97096.htm.

The text of the Uniform Domain Name Dispute Resolution Policy is available at the Web site of the Internet Corporation for Assigned Names and Numbers, http://www.icann.org/udrp/udrp-policy-24oct99.htm.