This is the June 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: .AI rides the wave of interest in A.I. / Taking the us out of .US  / Global domain name growth continues.

Domain name recuperation news: Not dropping the catch: respondent wins / Difficulties with distributors and domain names / Personal names generally evidence respondents’ rights.

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

.AI rides the wave of interest in A.I.

Everywhere you look these days there’s something about Artificial Intelligence (A.I.) - everything from news of members of the European Parliament endorsing the first ever transparency and risk-management rules for A.I. systems, to a story about the use of the technology to recreate John Lennon’s voice from a demo tape to produce one last Beatle’s song.  The Anguillan country code Top Level Domain (ccTLD) .AI appears to be reaping the benefit of this intense interest with its domain name registration numbers skyrocketing. 

Anguilla is a British Overseas Territory situated in the Caribbean to the east of Puerto Rico and the Virgin Islands which has a total area of just 91 square kilometres and a population of only around 16,000.  The .AI ccTLD (which encompasses the top level .AI as well as second level extensions .COM.AI, .NET.AI and .ORG.AI) is run by the Registry WHOIS.AI and has been operating since 1995. 

The ccTLD has, for some time, been a favourite of tech start-ups and IT entrepreneurs due to its association with the acronym for “Artificial Intelligence” coupled with the fact that there are no eligibility requirements for .AI, meaning that anyone can register a domain name in the ccTLD.  However, its growth has accelerated at a significant pace just recently. 

Just under a year ago, on 20 July 2022, there was a total of 143,737 .AI domain names registered.  By mid-June of this year this figure had reached 248,609 domain names, representing an almost 73% increase.  The lucky recipient of the bulk of the revenue from these registrations (which was estimated to be up to $2.9 million in 2018), is the Anguillan government. 

And it is not just the registration of .AI domain names that is exploding - the secondary market for .AI domain names is said to have reached a total sales volume of US$1M in the first quarter of 2023.  This is helped along by the Registry itself, which routinely auctions off expiring .AI domain names.  The highest reported price ever paid for a .AI was €95,000 for the domain name expert.ai in 2020 and 2023 has already seen the sale of domain names such as wise.ai for US$29,009 and brand.ai for US$24,555

.AI has some parallels with .IO, the ccTLD for the British Indian Ocean Territory (BIOT), a collection of seven atolls and over 1,000 individual islands in the Chagos Archipelago with a total land area of only 60 square kilometres.  .IO also enjoys popularity among tech companies due to its association with the computing term “input/output” as well as those seeking domain hacks for words ending in “io”.  However, unlike .AI, the .IO ccTLD is run by a private company located outside of BIOT and the IO ISO code even risks being abolished as a result of a dispute over sovereignty of the Chagos Archipelago, which would result in the retirement of the .IO ccTLD.  In spite of this, .IO is said to be currently enjoying an impressive 32% year on year growth rate and total registration numbers of over one million. 

It seems unlikely that the public focus on A.I. will shift any time soon and, between tech start-ups looking to fly the A.I. flag and domain name speculators seeking to cash in on the hype, it is difficult to see the Registry’s .AI domain name numbers declining any time soon. 

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Taking the us out of .US

The National Telecommunications and Information Administration (NTIA), which administers the contract for the country code Top Level Domain (ccTLD) for the United States, .US, is currently considering reducing access to WHOIS information for .US domain names.

NTIA has always authorised public access to the full WHOIS information of the registrants of .US domain names, including individuals’ names, addresses, telephone numbers and email addresses.  .US is one of the few ccTLDs that still provides access to full WHOIS data.  Indeed, since the European Union General Data Protection Regulation (GDPR) was introduced in 2018, privacy protection for domain name registrants has become the standard – thus in many ccTLDs, personal data is generally redacted when the registrants are individuals in order to protect them.  Indeed their data, if fully disclosed, may be used by malicious parties for abusive purposes, for example to spam, to phish and generally to cause harm.  In this context, NTIA asked the .US domain name Registry, Registry Services LLC, to submit a proposal to better protect the personal information of .US domain name holders. 

The proposal submitted by Registry Services LLC offers to create an Accountable WHOIS Gateway System (“the System”) which “would reduce the potential for abuse by eliminating anonymous and unaccountable access to usTLD registrant data”.  Those seeking access to WHOIS information would thus need to provide their name, an email address, identify a legitimate, non-marketing purpose for their request, and accept the Terms of Service to agree not to misuse the data.  As for non-personal information relating to the domain names (such as the registration and expiry dates, the registrar name, nameservers etc), this would remain available via anonymous query.

Although protecting individuals’ privacy is crucial, reduced WHOIS information is an issue for law enforcement entities seeking to protect brand owners’ rights in the face of cybersquatters and other malicious parties.  Aware of this, the Registry specified that they would “establish a portal for authenticated law enforcement users, which would grant such users near real-time access to personal information.”

NTIA opened Registry Services LLC’s proposal to comments from interested parties until 31 May 2023, seeking comments in particular on “whether the current system should be maintained, what should be considered a legitimate purpose and whether the system, if adopted, should be offered as an opt-in or opt-out service for .us registrants.” 

For more information, please contact David Taylor or Jane Seager.

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Global domain name growth continues

According to the latest Verisign Domain Name Industry Brief published this June, there was a small increase in the number of registered domain names worldwide in the first quarter of 2023 over the last quarter of 2022, thereby continuing the trend of global domain name growth. 

The report shows that there was a total of 354 million domain names registered across all Top Level Domains (TLDs) at the end of Q1 2023, which represents a 1% increase, or 3.5 million domain names.  Year over year, that is to say between Q1 2022 and Q1 2023, domain name registrations also increased by 1%.  This figure is explained by slow growth throughout 2022 and a slight decrease between Q2 2022 and Q3 2022. 

Growth over the last quarter was stronger among country code Top Level Domains (ccTLDs) with 135.7 million domain names registered at the end of Q1 2023, representing a 2% increase compared to Q4 2022.  Year over year figures for all ccTLDs show an increase of 2.3 million domain names, or 1.7%.

As regards generic Top Level Domains (gTLDs), the report only focuses on .COM and .NET, which had a combined total of 174.8 million domain names at the end of Q1 2023 (.COM alone accounting for 161.6 million domain names).  This represents an increase of 1 million domain names, or 0.6%, compared to Q4 2022. Year over year figures show a very slight increase of 0.1%.

Finally, growth under new gTLDs was down slightly at the end of Q1 2023 compared to Q4 2022, with 27.3 million domain names registered, representing a 0.6% decrease. However, year over year figures show an increase of 0.9 million domain names, or 3.6%.

As of 31 March 2023, the top ten largest TLDs by number of reported domain names were as follows:

  1. .COM: 161.6 million
  2. .CN (China): 20.3 million
  3. .DE (Germany): 17.5 million
  4. .NET: 13.2 million
  5. .UK (United Kingdom): 11 million
  6. .ORG: 10.7 million
  7. .NL (Netherlands): 6.3 million
  8. .RU (Russia): 5.6 million
  9. .BR (Brazil): 5.1 million
  10. .AU (Australia): 4.2 million

For more information, please contact David Taylor or Jane Seager.

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Domain name recuperation news

Not dropping the catch: respondent wins

In a recent decision under the Uniform Domain Name Dispute Resolution Policy (UDRP) before the World Intellectual Property Organization (WIPO), a Panel refused to order the transfer of the  domain name at issue because the Complainant failed to demonstrate that the Respondent had registered the domain name in bad faith.

The Complainant was Datacap Systems, Inc., an American company providing point-of-sale ("POS") solutions and payment processing services.

The Respondent was Domain Admin, XYZ Invest LLC, an American company specialised in domain name trading.

The disputed domain name, datacap.com, used to be registered to a third party who allowed it to lapse in July 2022.  The Complainant tried to secure it via backorder, but was unsuccessful.  The disputed domain name was in fact acquired by the Respondent via a "drop-catch" service

In September 2022, the disputed domain name resolved to a web page containing hyperlinks to websites of the Complainant’s competitors as well as information that the disputed domain name was for sale.  The Complainant contacted the Respondent inquiring about the price of the disputed domain name and the Respondent provided it, namely USD 79,999.  The Complainant then made a counteroffer which was not accepted by the Respondent.  The Complainant threatened to engage in legal proceedings.  The Respondent refused to decrease the price of the disputed domain name and so the Complainant filed a Complaint.

To be successful in a complaint under the UDRP, a complainant must satisfy the following three requirements under paragraph 4(a):

(i)         the domain name registered by the respondent is identical or confusingly similar to a trademark 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 domain name has been registered and is being used in bad faith.

With regard to the first limb, the Complainant contended that it had used the mark DATACAP since 1983 in relation to POS solutions and payment processing services and so it held common rights in this term.  Moreover, in October 2022, the Complainant filed an application with the United States Patent and Trademark Office to register the word mark DATACAP.  The Respondent noted that the Complainant filed its trade mark application only after the disputed domain name was registered in July 2022. 

The Panel found that the disputed domain name was confusingly similar to the Complainant’s common law rights in the term DATACAP and thus the Complainant had satisfied the first limb.

As far as the second requirement under the UDRP was concerned regarding the Respondent's rights or legitimate interests, the Complainant asserted that the Respondent had registered the disputed domain name only for the purpose of selling it at an exorbitant price.  The Respondent, whose primary business was the acquiring, holding for resale, and sale of domain names, underlined that it registered the disputed domain name because it was composed of a generic, dictionary word.  The Respondent also highlighted that there were more than ten companies around the world who had trade mark registrations corresponding to "datacap" or "data cap" and therefore no single party maintained the exclusive rights to such terms.  

In light of its findings under the third limb of the Policy, the Panel did not comment on the eventual existence of the Respondent's rights or legitimate interests.

Turning to the third limb of the Policy, the Complainant argued that the Respondent acted in bad faith as it used the disputed domain name for a website containing hyperlinks targeting the Complainant's rights.  The Respondent rebutted these arguments by firmly denying knowledge of the Complainant.  Moreover, the Respondent stated that it had ensured that its use of parking pages did not violate the rights of any third parties. The Respondent employed the WIPO Global Brand Database to make sure that that keyword selections excluded industries in which related trade mark holders operated. The Respondent submitted that the Complainant did not appear in this search because the Complainant had not yet filed its trade mark application.

The Panel, who agreed with the Respondent, limited its findings to bad faith registration of the disputed domain name.  The Panel stated that the use of a "drop-catch" service to acquire a domain name did not necessarily mean that a respondent was acting in bad faith.  The Panel underlined that the protocol laid out by the Respondent did demonstrate some genuine effort to ensure that its acquisition of a potentially attractive domain name was not violative of the bad faith standards under the UDRP.  The Panel also found that there was no evidence that the term "datacap" was uniquely associated with the Complainant, who also didn't have a registered trade mark for this term at the time that the Respondent registered the disputed domain name. 

In light of the above, the Panel made a finding that the Complainant had failed to demonstrate the requirements prescribed by the third limb of the UDRP and so the Panel refused the transfer of the disputed domain name.  The Panel, however, acknowledged that this was a "fairly close call" and refused to make a finding of a Reverse Domain Name Hijacking.

Comment

This decision illustrates that the use of so-called "drop-catch" services does not violate the UDRP per se, especially if the successful registrant undertakes a prior search for potential conflicting rights.  Such finding stems from the fact that it is generally necessary for complainants to evidence that the registrant had the complainant in mind when registering the domain name.  In the present case, it was particularly difficult for the Complainant to prove the Respondent's targeting of the Complainant's brand as the disputed domain name had descriptive connotations. 

In addition, it should be noted that the Complainant initiated UDRP proceedings further to unsuccessful negotiations with the Respondent.  As regular readers of the Anchovy newsletter will know, UDRP proceedings used as a "Plan B" after an unsuccessful purchase attempt are generally not advisable as they have a high chance of failure.

The decision is available here.

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Difficulties with distributors and domain names

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 Domain Name at issue, finding that the Respondent's registration, carried out without the Complainant's prior knowledge or explicit permission, did not inherently imply bad faith in the context of a distribution relationship.

The Complainant was Sanosil AG, a Swiss corporation established in 1982 and engaged in manufacturing and distributing disinfectants.  It held several registered stylised word trade marks for SANOSIL since at least 2004, both in Switzerland and in the United Arab Emirates.  It used its SANOSIL marks in connection with its business and had agreements with local distributors worldwide.  It also owned multiple SANOSIL-formative domain names.

The registrar-confirmed Respondent was Ammar Matouk, who previously worked for SANOSIL MENA Detergents & Disinfectants Manufacturing Co. LLC (SANOSIL MENA), a company established in 2015 as a result of a Joint Venture Shareholder's Agreement (JVS Agreement) between the Complainant and two individuals for the purposes of importing and marketing SANOSIL branded chemical products in the United Arab Emirates and in other countries in the Middle East and North Africa.  SANOSIL MENA submitted a detailed Response in which it argued that it was the beneficial holder of the Domain Name, and so the Panel considered it reasonable to decide that this company the Respondent in this case.  The JVS Agreement was purportedly terminated by the Complainant in 2022, whereby the Respondent was ordered to cease any use of the Complainant's SANOSIL trade marks, including on the website associated with the Domain Name.

The Domain Name sanosil-mena.com was registered on 23 December 2012, shortly before the JVS Agreement was entered into on 11 February 2013.  It pointed to a website promoting the Complainant's disinfectants and other products branded under its SANOSIL mark. 

To be successful in a complaint under the UDRP, a complainant must satisfy the following three requirements:

(a)        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

(b)        The respondent has no rights or legitimate interests in respect of the domain name; and

(c)        The domain name has been registered and is being used in bad faith.

With respect to the first limb, the Complainant contended that the Domain Name incorporated its SANOSIL mark in its entirety and the verbal element "mena", which stood for "Middle East and North Africa", could only increase the risk of confusion as it implied that the website associated with the Domain Name was the Complainant's official site for this region. 

The Panel confirmed the Complainant's stylised trade mark rights for SANOSIL. It held that the textual component "sanosil" was recognisable in the Domain Name and the addition of other elements (i.e., the term "mena" and a hyphen) would not prevent a finding of confusing similarity.  The first limb was therefore satisfied.

Regarding the second limb, the Complainant argued that the registrar-confirmed Respondent (i.e., Ammar Matouk) was never granted the right to use its SANOSIL trade mark, including in a domain name.  The Complainant also argued that the Respondent had no rights or legitimate interests in the Domain Name as from its receipt of the Complainant's termination notice in 2022.  Again, the Respondent relied on its bona fide use of the Domain Name for more than ten years under the JVS Agreement.

The Panel first noted that a respondent claiming rights or legitimate interests in a domain name based on a prior agreement or past good-faith use would not necessarily have the same rights or legitimate interests at the time of the Panel’s assessment as Panels tend to assess claimed respondent rights or legitimate interests in the present, i.e., with a view to the circumstances prevailing at the time of the filing of the complaint.  However, the Respondent argued that the JVS Agreement was not a "prior agreement" as it had not been validly terminated.  The Panel considered that it was not in a position to review the detailed provisions of the JVS Agreement or determine whether it was still in force or not.  However, given its findings under the third limb, the Panel held that it was not necessary to reach a firm conclusion under the second limb.

As far as the third limb was concerned, the Complainant underlined that the Domain Name was registered before the entry into force of the JVS Agreement, and thus before the Complainant consented to the Respondent’s use of its SANOSIL trade mark.  Therefore, when the Respondent registered the Domain Name, it was aware of the Complainant's prior trade mark rights, indicating bad faith under the UDRP.  The fact that the Respondent had continued to use the Domain Name after the JVS Agreement was terminated constituted use in bad faith.  In response to these assertions, the Respondent claimed that it registered the Domain Name in anticipation of the conclusion of its commercial agreement with the Complainant and had lawfully used this Domain Name to conduct its business with the Complainant's knowledge and approval since 2013.  As a result, neither its registration nor its use of the Domain Name was in bad faith.

Given the timing of the registration of the Domain Name shortly before the JVS Agreement became effective, the Panel assumed that the Respondent's intent at the time of registration was to secure the most suitable online identity for a distributor conducting business in the territories concerned, namely the Middle East and North Africa.  The question then arose as to whether the Complainant's lack of knowledge or permission when the Respondent registered the Domain Name would necessarily lead to the conclusion that this Domain Name was registered in bad faith under the UDRP.  To answer this question, the Panel noted that the JVS Agreement between the two parties did not expressly prohibit the registration of domain names incorporating the Complainant's trade marks.  In the absence of such prohibition, the Panel found that the registration of the Domain Name could only be in bad faith if the evidence showed that the Respondent had some form of abusive or malicious intent at time of registration, such as to divert business from the Complainant or to use this registration as leverage in the negotiations prior to the conclusion of the JVS Agreement.  On the balance of probabilities, the Panel found it more likely that the Respondent registered the Domain Name in the expectation of a commercial agreement being concluded with the Complainant (which was effectively in place less than two months later).  On this basis, the Panel found that the Complainant was unable to prove that the registration of the Domain Name was in bad faith and therefore the third limb was not satisfied.  The Complaint was therefore denied.

Comment 

This decision highlights once again the challenge faced by brand owners when trying to obtain control over domain names registered and used by their distributors after the end of the relationship, especially when any relevant agreements do not explicitly prohibit domain name registrations and there is no evidence of the distributor's abusive or malicious intent at the time of registration. Recognising the limitations of the UDRP in resolving disputes involving domain names in such situations, it is advisable for brand owners either to include appropriate provisions in their agreements to address the ownership of domain names after the end of their contractual relationship with distributors, or simply to obtain and retain control of the necessary domain names themselves and allow distributors to use them under the terms of their agreements.

The decision is available here.

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Personal names generally evidence respondents’ rights

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 UDRP Complaint for the disputed Domain Name gotohale.com.  The decision was on the basis that the Complainant had failed to show that the Respondent had no rights or legitimate interests in respect of the Domain Name as it included the Respondent’s personal name. 

The Complainant was Hale Law, located in Florida, United States of America.  The Complainant owned a trade mark registration for the term "GO TO HALE", registered in December 2021.

The Respondent was Roger Hale, an individual based in the United States of America.  He registered the disputed Domain Name in May 2000. 

To be successful in a complaint under the UDRP, a complainant must satisfy the following three requirements:

(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 domain name has been registered and is being used in bad faith.

As far as the first limb was concerned, the Panel was satisfied that the Complainant had rights in the trade mark GO TO HALE and that the Domain Name incorporated the Complainant’s trade mark in its entirety.  The majority of the Panel therefore found that the Domain Name was confusingly similar to the Complainant's trade mark.  Thus the Complainant satisfied the first limb of paragraph 4(a) of the UDRP.

Turning to the second limb and a respondent's rights or legitimate interests (or lack of them), according to section 2.1 of the WIPO Overview 3.0, a complainant must demonstrate that a respondent has no rights or legitimate interests in respect of the domain name in question.  In this regard, a complainant is normally required to make out a prima facie case, and it is then for the respondent to demonstrate otherwise.  If the respondent fails to do so, then the complainant is deemed to satisfy paragraph 4(a)(ii) of the UDRP.

In the present case, the Complainant claimed that the Respondent had not used the Domain Name for over two decades and that the Domain Name was resolving to a parking page with pay per click links at the time of filing.

The Respondent argued that he registered the Domain Name at least 20 years before the Complainant's registration of its GO TO HALE trade mark and that he had made legitimate use of the Domain Name for the past 23 years.  He also added that he had used the Domain Name for an IT consultancy business incorporating his surname, "Hale Solutions", since 2001, and evidenced that he had used the Domain Name for his email address to conduct his personal and professional business for more than 20 years before the Complainant had begun using “GO TO HALE” as a trade mark for legal services.

The Panel stated that the evidence showed that the Respondent was holding the legitimate right of priority as he had registered the Domain Name 20 years before the registration of the Complainant's trade mark.  It also found that the use of one's own surname in a domain name is generally sufficient evidence of a right or legitimate interest in a disputed domain name.  The Panel further underlined that typically the first person in time to register a domain name would normally be entitled to use the domain name for any legitimate purpose it wished.  The Panel thus concluded that the Respondent had rights and legitimate interests in respect of the Domain Name.

The Panel did not need to consider the issue of bad faith registration and use under the third limb in light of its analysis of the second limb. Nevertheless, the Panel noted that it was clear that since neither the trade mark nor the Complainant existed at the time when the Respondent acquired the Domain Name, it was not possible to find that the Domain Name had been registered in bad faith.

The Panel thus denied the Complaint and entered a finding that the Complainant had engaged in Reverse Domain Name Hijacking as the Complainant’s counsel must have known that without supporting evidence the Complaint was doomed to failure, at least from the time that it became aware of the Respondent’s personal name.

Comment

This decision highlights that trade mark owners should think very carefully about filing a UDRP complaint when the domain name at issue was registered before their trade mark registration.  The resolution of a disputed domain name to a parking page at the time of filing is not necessarily decisive when it comes to a respondent’s lack of rights or legitimate interests, especially when the domain name matches the respondent’s personal name.  It should also be noted that the fact that the registrant details are often hidden at the time of filing is frequently problematic, but complainants are given the opportunity to amend their complaints further to the registrar’s disclosure of the registrant details.  They should thus give careful consideration to the implications of the disclosure and whether it means that their complaint can no longer succeed and should therefore be withdrawn before it is officially served on the respondent.

The decision is available here.

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Authored by the Anchovy News team.

 

Anchovy News editorial team:

  • Laëtitia Arrault
  • Lanlan Bian
  • Gabrielle Creppy
  • Sean Kelly         
  • Hortense Le Dosseur
  • Ying Lou
  • Cindy Mikul
  • Eliza Parr
  • Thomas Raudkivi
  • Maria Rozylo
  • Jane Seager
  • Aissatou Sylla   
  • David Taylor
  • Tony Vitali

Anchovy® - Global Domain Name and Internet Governance

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We also specialise in all aspects of ICANN’s new generic Top Level Domain (gTLD) process and we are an agent for the Trademark Clearinghouse.  As the global Domain Name System undergoes an unprecedented expansion, brand owners must revise their online protection strategies and we are ideally placed to guide them.

We are also frequently brought in to advise on cybersecurity, data protection and on a whole range of technology-related issues.

For more information on our services, please contact David Taylor or Jane Seager.

 

 

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