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Dec '23

Domain Name News: July / August 2023 – Lexology

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This is the July/August edition of Anchovy News. Here you will find articles concerning ICANN, the domain name industry and the recuperation of domain names across the globe. In this issue we cover:
Domain name industry news: AFNIC publishes 2022 study on global domain name market / The return of .UA dispute resolution / Regional distribution of .DE domain names in Germany.
Domain name recuperation news: Evidence of targeting is essential under the UDRP / Good faith acquisition poisons bad faith argument / French Arbitration Clause Blocks UDRP Complaint against Regional Media Company.
Newsletter sections:
For earlier Anchovy News publications, please visit our Domain Names practice page. Learn more about Anchovy® – Global Domain Name and Internet Governance here.
Domain name industry news
AFNIC publishes 2022 study on global domain name market
AFNIC, the French domain name Registry, has recently published its annual report on the global domain name market, which shows a mild growth for 2022.
According to the study, there were about 355 million domain names registered globally at the end of 2022 (a 1.9% increase compared to 2021), comprising:
This global growth marks a relative recovery of the market, which had been experiencing a downward growth trend these last few years (+4.7% in 2019, +1.3 % in 2020 and only +0,9% in 2021). However, this mild growth hides great discrepancies from one TLD to the other as a small number of extensions underwent great variations.
Regarding Legacy gTLDs (that is to say the gTLDs created before 2012), .COM continues to dominate the domain name market, representing 84% of all legacy gTLDs and 46% of all TLDs. However, 2022 was a mixed year for .COM, which faced two quarters of losses for the first time in its history. It still managed to finish the year with +1.1% growth compared to 2021, though.
The other Legacy gTLDs (namely .AERO, .ASIA, .BIZ, .CAT, .COOP, .INFO, .JOBS, .MOBI, .MUSEUM, .NAME, .NET, .ORG, .POST, .PRO, .TEL, .TRAVEL and .XXX) continue their downward trend – they were down by 0.8% at the end of 2022, after a 0.7% decrease in 2021 and a 1.8% decrease in 2020. Of the five biggest Legacy gTLDs excluding .COM (namely .BIZ, .INFO, .MOBI, .NET and .ORG), only .ORG has slightly increased (+1%). The other four have all declined, with .MOBI even reaching -9%.
As regards new gTLDs, the study reports 7.2% growth, which is noticeable after a 9.4% decrease the previous year. New gTLDs represent about 9% of the domain name market. The biggest new gTLD in terms of volume is .XYZ with approximately 4.56 million domain names at the end of 2022, followed by .ONLINE (2.35 million), .TOP (2.12 million – up by 28%), .SHOP (1.53 million – up by 38%) and .SITE (1.3 million).
As far as ccTLDs are concerned, they have experienced 3% growth, after a 3.8% decline in 2021. They represent 36% of the domain name market. However the study shows that growth has slowed down in most regions, in particular Latin America whose growth went from +18% in 2021 to only 4% in 2022. .CN (China) and .TW (Taiwan) underwent a drastic decrease in volume of -26.1% and -46.8% respectively, while .AU (Australia) experienced an impressive 22.4% increase further to the opening of registrations directly under the .AU top level domain. .IO (British Indian Ocean Territory) also confirms its current popularity (mainly among tech companies due to its association with the computing term “input/output”) with 17.5% growth.
In terms of regions, Europe remains the region with the most popular ccTLDs. Of the 29 ccTLDs counting over one million registered domain names, 17 are in Europe (led by .DE (Germany) with 17.4 million domains then .UK (United Kingdom) with 11.1 million domains), 6 in Asia-Pacific (led by .CN (China) with 15.1 million domains), 3 in Latin America and the Caribbean (led by .BR (Brazil) with 5 million domains), two in North America (led by .CA (Canada) with 3.3 million domains), and one in Africa (.ZA (South Africa), with 1.4 million domains).
For more information, please contact David Taylor or Jane Seager.
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The return of .UA dispute resolution
In the May 2022 issue of Anchovy News, we reported that the World Intellectual Property Organization (WIPO) had temporarily suspended its domain name dispute resolution services under the .UA (Ukraine) Domain-Name Dispute-Resolution Policy (UA-DRP) due to the imposition of martial law in Ukraine. However, on 1 July 2023, WIPO resumed its dispute resolution services under the UA-DRP with the addition of a number of changes that take into account the current constraints.
Hostmaster Limited (Hostmaster), the company responsible for the .UA Registry, released news of the resumption of the UA-DRP in an announcement on its website on 4 July 2023. New complaints brought under the procedure will now be subject to the following adjustments:
Further to the above, in order for the administrative proceedings to commence at all, the factual circumstances relating to the case must be considered, including the respondent’s location and last known address. Hostmaster can instruct WIPO not to initiate proceedings if they feel that the particular circumstances of the case warrant this.
After consideration of the facts, the Administrative Panel may, additionally, suspend the proceedings if it concludes that the Respondent is “unable to exercise its right to defense at the time of the administrative proceedings, and if it is objectively impossible to consider the dispute without the Respondent’s participation.” The Registry’s guidance on this states that the Panel should consider the location of the respondent and how the domain name has been used since the introduction of martial law.
The above-described modified rules for the UA-DRP will remain in force as long as martial law continues and for 90 days following its termination.
In light of the above, any party seeking to recuperate a .UA domain name via the UA-DRP should be aware that the above-mentioned changes will add over a month to the time required to reach a decision in the case, or that it could even be deemed impossible to consider the case at all.
For more information, please contact David Taylor or Jane Seager.
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Regional distribution of .DE domain names in Germany
DENIC, the Registry responsible for running Germany’s .DE country code Top Level Domain (ccTLD), has recently published its 2022 report on the regional distribution of .DE domain names in Germany.
There were over 17.4 million registered .DE domain names at the end of 2022 – an increase of 260,000 domain names (or 1.5%) compared to 2021. Some 15.6 million .DE domains were held by registrants living across the 400 cities and districts of Germany (an increase of 110,000), whilst over 1.8 million .DE domains were held by registrants living abroad. According to DENIC, statistically, one in five inhabitants of Germany had registered a .DE domain name at the end of last year.
At a city level, unsurprisingly, the top places for .DE domain names were large cities – first Berlin with just under a million .DE domain names, then Hamburg (about 613,000) and Munich (about 550,000), which swapped positions compared to 2021. With regard to the number of .DE domains in relation to inhabitants, Osnabrück (in northwest Germany) remained number one with 1,669 .DE domain names per 1,000 inhabitants, far ahead of Bonn (373) and Munich (370).
At a regional level, the state of Hamburg kept its number one position with 331 .DE domain names per 1,000 inhabitants, ahead of the states of Berlin (237) and Bavaria (208). All the German states experienced an increase in .DE registrations in 2022, with the exception of Berlin (- 0.6%) and Bavaria (- 0.4%). As in previous years, North Rhine-Westphalia remained the state with the highest number of .DE registrations (over 3.4 million) and experienced “the highest absolute annual growth (+46,612)”. Overall, growth in the West of Germany slightly exceeded that in the East but the West-East divide in the distribution of .DE domains remained nearly unchanged.
At an international level, the number of .DE domains held by registrants based outside of Germany increased by 8.9% last year, reaching over 1.8 million and accounting for 10.6% of all .DE domain names at the end of 2022. The majority of these domain names were held by registrants living in the United States (31%), the Netherlands (13%), Austria (9%), Portugal (7%) and Switzerland (5%).
For more information, please contact David Taylor or Jane Seager.
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Domain name recuperation news
Evidence of targeting is essential under the UDRP
In a recent decision under the Uniform Domain Name Dispute Resolution Policy (UDRP) before the World Intellectual Property Organization (WIPO), a Panel denied the transfer of the disputed Domain Name cresets.com given the lack of any evidence suggesting that the Domain Name had been registered and used in bad faith.
The Complainants were Cresset Administrative Services Corporation and Cresset Partners LLC, two United States companies offering financial advisory and wealth management services. They held various trade mark registrations for CRESSET in the United States, including a United States trade mark registered on 31 July 2018 for financial planning and related services. The Respondent was a company based in Bangladesh.
The disputed Domain Name was cresets.com, registered on 17 December 2022. It resolved to a website that appeared to offer resources for photo, design and mock-up applications and suggested that free downloads were available upon an account being created.
To be successful in a complaint under the UDRP, a Complainant must satisfy the requirements of paragraph 4(a) of the UDRP, namely that:
(i) The domain name registered by the respondent is identical or confusingly similar to a trade mark or service mark in which the complainant has rights; and
(ii) The respondent has no rights or legitimate interests in respect of the domain name; and
(iii) The disputed domain name has been registered and is being used in bad faith.
When it came to the first limb, the Complainants relied on their trade mark registrations for CRESSET and asserted that the Domain Name was a common misspelling of this with the transposition of one letter “s”. The Panel applied the test for confusing similarity and found that the Domain Name was confusingly similar to the Complainants’ trade mark.
Given its findings under the third limb, the Panel considered that it was unnecessary to decide whether the Respondent had rights or legitimate interests in respect of the Domain Name.
Regarding the third limb, the Complainants had to demonstrate that, on balance, the Domain Name had been registered and used in bad faith.
Concerning the registration of the Domain Name, the Complainants contended that the Respondent must have been aware of their CRESSET trade mark due to the notoriety of the trade mark among consumers. However, they provided no evidence concerning the level of public recognition of their trade mark outside of the United States, nor any specific reasons as to why the Respondent ought to have been aware of it. Viewing both CRESSET and “Cresets” as names that could have independent meanings and applications in commerce in different geographical locations, the Panel did not consider that the latter was obviously parasitical upon, or necessarily called to mind, the former.
Based on its own limited research, the Panel found that the Complainants were not the owner of the domain name cresset.com and operated their principal websites from “www.cressetcapital.com” and “www.cressetpartners.com”, which would appear to dispel any suggestion that the Domain Name was intended to impersonate the Complainants’ domain name.
Although the Respondent had provided no explanation for its choice of the Domain Name, the Panel noted that it used the name “Creset” instead of “Cresets” in one instance on its website. The Panel was not persuaded that the Respondent had registered the Domain Name with knowledge of, and in order to target, the Complainants’ trade mark.
Concerning the use of the Domain Name, the Panel found that the Respondent’s website indicated no obvious route to commercial gain for the Respondent, nor any content related to financial or investment services or linked to any commercial provider of such services. In the circumstances, the Panel was not persuaded that the Respondent had created and used its website as a sham or pretext to cybersquat upon the Complainants’ trade mark or otherwise to cause confusion with that trade mark.
The Complainants submitted that the Respondent had registered the Domain Name with the intention of selling it to the Complainants for a sum in excess of the Respondent’s out-of-pocket costs associated with the Domain Name. The Panel found this contention speculative as the Complainants had provided no evidence in this regard.
The Complainants also contended that the Respondent had registered the Domain Name with the intention of diverting Internet users to its own website by causing confusion with the Complainants’ trade mark. Again the Panel found that there was no evidence to demonstrate that this was the case. In the Panel’s opinion, bad faith could not be established merely upon the Complainants’ assertion that the Domain Name was so similar to their CRESSET trade mark that it could only have been registered and used to target that trade mark.
As stated in Section 3.1 of WIPO Overview 3.0, “complaints alleging the types of conduct described in UDRP paragraph 4(b) should be supported by arguments and available evidence… Even in cases of respondent default, panels have held that wholly unsupported conclusory allegations may not be sufficient to support a complainant’s case.” In the present case, the Panel did not find on the available evidence that the Domain Name had been registered and used in bad faith. The Complaint was therefore denied.
Comment
This decision illustrates the importance for complainants to collect sufficient evidence to establish a respondent’s bad faith in the registration and use of a disputed domain name before filing the UDRP. This is particularly the case when a trade mark is distinctive in one jurisdiction but not in another, and may not exclusively refer to the Complainant. In the present case, the mere fact that the disputed Domain Name was considered similar to the Complainant’s trade mark did not necessarily mean that the Respondent’s registration and use of the Domain Name was in bad faith. Evidence that the Respondent had the Complainant in mind and was attempting to profit from the Complainant’s goodwill and reputation when registering and using the disputed Domain Name was also necessary. In short, evidence of targeting is key when it comes to filing a successful UDRP complaint.
The decision is available here.
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Good faith acquisition poisons bad faith argument
In a recent decision under the Uniform Domain Name Dispute Resolution Policy (UDRP) before the World Intellectual Property Organization (WIPO), a Panel denied a UDRP Complaint for the disputed Domain Names hemlockfarms.com, hemlockfarms.net and hemlockfarmspa.com. The Panel found that the Domain Names had not been registered by the Respondent in bad faith as they were acquired as a result of the Respondent’s purchase of a real estate agency, and such real estate agency (or its predecessors) had already been using at least one of the Domain Names for a number of years with no objection from the Complainant.
The Complainant, Hemlock Farms Community Association, was a private, gated residential community in Lords Valley, Pennsylvania, United States, that was created in the 1960s. The Complainant held two United States trade marks for HEMLOCK FARMS, registered in October 2012 and August 2022, with dates of first use in commerce of 15 October 1963 and 23 February 2012 respectively. The Complainant registered the domain name hemlockfarms.org on 19 April 2000 and used it to host its commercial website.
The Respondent provided services relating to the buying and selling of real estate in the Hemlock Farms community and acquired at least one of the disputed Domain Names as part of the acquisition of an existing real estate agency. The date of this transaction was unclear as the Response cited multiple dates, but the Panel found that the exact date of the Respondent’s acquisition of the Domain Names was not crucial to the outcome of the proceedings.
The disputed Domain Names were originally registered on 29 November 1998 (hemlockfarms.com), 12 September 2017 (hemlockfarms.net) and 9 September 2011 (hemlockfarmspa.com). At the date the Complaint was filed, the Domain Names hemlockfarms.com and hemlockfarmspa.com did not resolve to an active website and the Domain Name hemlockfarms.net redirected to a website at pikepahomes.com where the Respondent advertised real estate services.
Before the filing of the Complaint on 28 March 2023, the parties discussed the possible acquisition of the disputed Domain Names. The Complainant alleged that in October 2020, the Respondent’s husband offered to transfer the disputed Domain Names to the Complainant, in exchange for a real estate transaction in the region of USD 380,000, an offer which the Complainant declined.
In March 2021, the Complainant's lawyers requested transfer of the disputed Domain Names and offered to pay up to USD 500 for actual expenses incurred.
In correspondence the Respondent stated that she had never personally offered to sell the disputed Domain Names to the Complainant for financial gain and asserted that the supposed conversation occurred without her knowledge. The Respondent also noted that the Domain Names were previously owned and used by other real estate agencies who were never approached by the Complainant.
To be successful in a complaint under the UDRP, a complainant must satisfy each of the following three requirements:
The Complainant argued that it had trade mark registrations for HEMLOCK FARMS, that the disputed Domain Names were identical or confusingly similar to this trade mark and that at no time did it authorize or license the Respondent to use the HEMLOCK FARMS trade mark in a domain name or otherwise. The Complainant also argued that the Respondent had no rights or legitimate interests in the disputed Domain Names and that the Domain Names were registered and were being used in bad faith. The Respondent disputed virtually every aspect of the Complaint.
The Panel found that the Complainant had rights in the trade mark HEMLOCK FARMS through its trade mark registrations and the use that it had demonstrated of the trade mark. The Panel also found that the disputed Domain Names were identical or confusingly similar to the Complainant's trade mark and therefore that the first limb was satisfied.
The Panel declined to address the second limb, i.e., the Respondent's rights or legitimate interests, in light of its analysis under the third limb.
Regarding the third limb, the Panel found that the Respondent had acquired the disputed Domain Names when she purchased a real estate agency, as detailed above. The Panel further noted that at least one of the disputed Domain Names had been used by this agency or its predecessor agency from 2000 onwards to feature homes for sale in the Complainant's community, apparently without any pushback from the Complainant (this allegation was not disputed in the Complainant's supplemental filing). A number of years had passed after the Respondent’s acquisition of the agency and before the Complainant approached her in 2020 about a possible sale of the disputed Domain Names. On these facts, the Panel was not satisfied that the Complainant had shown that the disputed Domain Names were registered in bad faith by the Respondent and thus the Complaint was denied.
The Panel noted that this was a very unusual case. In effect the date on which a respondent acquires a domain name is the date that a panel will consider in assessing bad faith registration, not the date of first registration. In the case at hand, the Panel determined that the Respondent’s acquisition was in good faith, presumably assisted by the fact that at least one of the Domain Names had already been used in a similar manner for a number of years by third parties. The Panel then briefly noted that it was beyond the Panel’s remit to decide on trade mark infringement, and underlined that a UDRP claim is not the same as a trade mark infringement claim, given that the UDRP requires bad faith, whilst trade mark infringement does not.
The decision is available here.
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French Arbitration Clause Blocks UDRP Complaint against Regional Media Company
In a recent decision under the Uniform Domain Name Dispute Resolution Policy (UDRP) before the World Intellectual Property Organization (WIPO), a three-member Panel denied a Complaint for the disputed domain name lofficielarabia.com, finding that determination of the dispute between the Parties fell outside of the scope of the UDRP, citing a French arbitration clause as providing the preferred route for determination of the dispute.
The Complainant was Les Éditions Jalou, a French company engaged in the publishing and distribution of fashion magazines, including L'Officiel, which was first published in Paris in 1921. The Complainant was the owner of a number of L'OFFICIEL-formative trade marks, including Bahrain trade mark registration number 1/046099, registered on 3 June 2008.
The registered owner of the disputed domain name was an individual, the owner and authorized representative of a United Arab Emirates company named Chalk Media FZE. The disputed domain name was registered on 10 April 2018. In June 2018, the Parties entered into a licence agreement (the "Licence Agreement") relating to the distribution of the Complainant's L'Officiel magazine in Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, and the United Arab Emirates. The disputed domain name was used to publish content originating from and expressly associated with the Complainant's L'Officiel magazine. According to the Complainant, the Licence Agreement was duly terminated by notice dated 11 February 2021. This was disputed by the Respondent.
In order to prevail, a complainant must demonstrate, on the balance of probabilities, that it has satisfied the requirements of paragraph 4(a) of the UDRP:
(i) the disputed domain name is identical or confusingly similar to a trade mark or service mark in which the complainant has rights;
(ii) the respondent has no rights or legitimate interests in the disputed domain name; and
(iii) the disputed domain name was registered and is being used in bad faith.
Under paragraph 4(a)(i) of the UDRP, the Panel found that the Complainant had established trade mark rights for marks including "L'OFFICIEL", both by itself and together with other elements. The Panel observed that the disputed domain name incorporated the Complainant's trade mark, omitting the apostrophe, together with the term "arabia", finding the disputed domain name to be confusingly similar to trade marks in which the Complainant had rights.
Under paragraph 4(a)(ii) of the UDRP, the Panel noted that the question of whether the Respondent had rights or legitimate interests in respect of the disputed domain name was "inextricably tied to the question of whether or not the Licence Agreement was validly terminated by the Complainant", further noting that that question was disputed between the Parties and was not, in the Panel's view, suitable for determination within the confines of the UDRP.
As regards the ongoing contractual dispute between the Parties, the Panel commented that, first, there was a dispute concerning the applicable facts; secondly, the Licence Agreement was stated to be governed and construed in accordance with the laws of France; thirdly, the Respondent had relied on a force majeure clause in the Licence Agreement, which would require both a factual determination as well as a legal determination of what amounted to force majeure under French law; and finally, the Licence Agreement expressly provided for settlement of disputes arising out of or in connection with the Licence Agreement through arbitration in compliance with the rules of a designated French arbitration body.
The Panel held that it was not in a position to make determinations on the above-listed matters, their determination falling outside of the scope of the UDRP, and that it was therefore unable to determine whether the Respondent had rights or legitimate interests in respect of the disputed domain name. Noting that it was impossible for the Complainant to establish that the Respondent had no rights or legitimate interests in respect of the disputed domain name, the Complaint would therefore fail.
Under paragraph 4(a)(iii) of the UDRP, the Panel went on to observe that the disputed domain name had been registered with the Complainant's knowledge, and that the Complainant had assisted the Respondent with its website at the disputed domain name in 2018. The Panel commented in this regard that there was no evidence of the Respondent having registered the disputed domain name with any intention of infringing the rights of the Complainant. Rather, the Respondent had registered the disputed domain name with the legitimate intention of using it in connection with its licensed publication of the Complainant's L'Officiel magazine. The Panel found that the Complainant had failed to establish that the Respondent registered the disputed domain name in bad faith, therefore the Complaint would also fail on the third element of the UDRP.
Comment
It is often said that the UDRP was intended for clear, so-called "slam-dunk" cases of trade mark‚ÄĎabusive domain name registration and use. In cases involving pre-existing agreements between parties to a UDRP dispute, particularly those involving agreements that include clauses prescribing specific mechanisms for determining disputes between contractual parties, UDRP panels will be careful not to make determinations that would preempt the findings of the competent dispute resolution body as determined in the respective contract. In many of such cases, it is often the case that the domain name in question forms part of a broader business dispute not limited to the domain name itself, that would not be suitably determined by the mere transfer or cancellation of the domain name. Such cases typically require determinations on legal and factual matters falling outside the relatively narrow grounds of the UDRP, and are better suited to resolution in a court of competent jurisdiction with the benefit of discovery, interrogatories and witness testimony.
The decision is available here.
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Joker
Joker

Joker has been buying and selling domains since the late 90's. He has worked with many portfolios and investors over the past decade as well.

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