Can Inactive Use Be Bad Faith?

The China Network Information Center Domain Name Dispute Resolution Policy (Policy) specifies that bad faith is not limited to certain circumstances enumerated in Article 9. Panels of experts have taken the liberty of finding bad faith beyond the factors specified in that article. For instance, does inactive use of a domain name by its registrant constitute bad faith registration or use under the Policy? The following hypothetical case may be useful in answering this question.

A law firm may be bold enough to use 'China Law Vague' as its name. Since the late 1980s, the firm registered the name as a trademark in China for use in delivering its legal services. Many clients enjoy using this firm's services because the legal advice provided tends to make Chinese law less vague to understand. In this context, 'China Law Vague' constitutes a trademark, as well as a trade name protected under PRC law.

Subsequently, an individual registrant (who is not a lawyer) registers the domain name chinalawvague.com.cn, but does not actively use the domain name by linking it to an active web site. The registrant offers the domain name for sale at a popular domain names trading web site and places a counter on the web page for the sale of the domain name to record traffic on that page. The law firm files a complaint with a domain name dispute resolution center against the registrant. However, no evidence is submitted to support a finding of bad faith under Article 9 of the Policy, showing that the registrant:

(i) registered the domain name primarily for selling the domain name to the law firm for valuable consideration;

(ii) engaged in a pattern of registering the trademarks of others;

(iii) registered the domain name primarily for the purpose of disrupting the business of the law firm, and

(iv) used the domain name to confusingly attract users to a web site linking to the domain name.

Therefore, the issue here is whether or not there are other indicators of bad faith on the part of the registrant under the circumstances.

In this case, the panel may find bad faith even though the complainant failed to prove any of the specific indicators of bad faith. The reasoning may be that the combination of the descriptive terms 'China Law' and 'Vague' into one phrase results in a name that is more distinctive than descriptive and an internet user entering www.chinalawvague.com.cn is more likely than not, expecting to arrive at a web site hosted by the complainant, the holder of the registered trademark and service marks for a long period of time. Moreover, the suffix com.cn is suggestive of a commercial enterprise in China, bearing the trade name of the web site host as the third-level domain name, which precedes the suffix. Finally, the fact that the respondent posted only a counter at the web site that records traffic to the site is tantamount to an advertisement that the web site is for sale and an indicator of its value.

The Policy does not rule out that inaction (for example, passive holding) in relation to a domain name registration may, in certain circumstances, constitute a domain name being used in bad faith. A combination of factors may non-exhaustively include:

(i) a strong trademark;

(ii) a lack of evidence of good faith use, and

(iii) the respondent's attempt to conceal his/her own identity, providing false contact information and default by failing to submit a response in a timely manner (which could be interpreted as an admission of the allegations).

These factors may lead the panel to conclude that there were no plausible active uses that would be legitimate.

Among the factors considered, the one relating to the distinctiveness of the trademark – whether or not the trademark is strong – cannot be overemphasized. A strong or distinctive mark effectively identifies the origin of a product or service rather than its characteristics. For instance, 'Google' is a coined or invented word with no other meaning other than to specifically act as a mark to identify the famous internet search engine and internet-related services company. In other words, the scope of protection of a strong mark can be much larger than that of a weak mark, which is not distinctive and is likely to have other meanings found in a dictionary. Since a strong mark stands out as the mark of a particular service or product, any imitation of it would be confusing. A recent case involving Googel.cn decided by a panel (of which the author was a member) supports this position in an online context.

In contrast, another panel (of which the author was also a member) involving the domain name ford.cn brought by Ford Motor could have been decided differently if the dissenting opinion (written by the author) was considered. The word 'ford', apart from serving as a common family name of numerous celebrities (for example, a US president, an English writer, a US filmmaker, a US movie star, as well as the founders of the complainant) is also a noun, referring to a shallow area in a stream; and a verb, meaning to cross a river where it's shallow. The dissenting opinion stated that other bad faith evidence should have been demonstrated because 'Ford' was a weak mark with multiple meanings and therefore, cannot specifically act as a mark to identify the complainant and its products or services in the domain name system.