A Case Study Showing How Conducting and Keeping Good Records of Due Diligence May Save Your Domain Name One Day
In 2019 alone, there were 15.2 million trademark filings worldwide, and by the end of 2019, there were over 58 million active trademark registrations around the world1. It is therefore not uncommon these days that businesses may coincidentally come up with and wish to use brand names (as well as the corresponding domain names) that are identical or similar to a certain trademark registered in another country, especially when most businesses nowadays wish to use simple and direct brand names for branding reasons.
In most cases, businesses look to roll out brands on a very tight timeline (or have already rolled out the brands) and may simply wish to register any domain name with the new brand name therein as long as it is available, without conducting any due diligence because it is “too late” to change the brand name and they have already balanced the commercial risk of doing so.
While it is well understood that “time is money” in the online commercial world and businesses simply wish to register a domain name and launch their new brand as soon as possible, they are nevertheless advised to spare a quick while to conduct due diligence against the relevant brand and domain name and keep good record of the exercise and analysis because those can be vital evidence in the future which wins them dispute domain name cases and saves the domain name from being transferred to a third party trademark owner from another jurisdiction.
In the recent WIPO UDRP domain name decision of Clever Cloud SAS v. Dr.-Ing. Benjamin Poppinga (Case No. D2020-2813) issued on 21 December 2020, the domain name registrant (i.e. the “Respondent”) had produced, among other evidence, clear records of business plans, due diligence and detailed analysis of potential confusion against the complainant’s (“Complainant”) registered trademarks, and was ultimately found to have successfully rebutted the claims that it (i) has no rights or legitimate interests over the subject domain name <clever.cloud> (“Subject Domain Name”), and (ii) registered or used the Subject Domain Name in bad faith, and the subject complaint was thereby denied.
The background and findings of the case are summarized as below:
The Complainant is a company named “Clever Cloud” which was incorporated in France on 2 August 2010. The Complainant offers commercial IT solutions as business and operates the website <www.clever-cloud.com>. The Complainant also registered in France the trademark “CLEVER CLOUD” on 2 August 2010 in Classes 9, 38, 39 and 42 (Reg. No. 103757946) (“Complainant’s Trademark”) and has continually used this trademark since 2010.
On the other hand, the Respondent is a German individual who alleged to have started the “Clever Cloud-Project” in 2015 to produce and distribute colouring books. The Respondent has registered for the Subject Domain Name on 16 February 2016 and at the time when the complaint was filed (i.e. 26 October 2020), the domain name resolved to a blank page.
(3) Summary of the Findings
To succeed, the Complainant must establish the following three grounds with cogent evidence, namely:
- The Subject Domain Name is identical or confusingly similar to the Complainant’s Trademark;
- The Respondent has no rights or legitimate interests in respect of the Subject Domain Name; and
- The Subject Domain Name has been registered and is being used in bad faith.
- i) Identical or Confusingly Similar to the Complainant’s Trademark
This was rather straight-forward, and the panel had no difficulty in deciding that the Subject Domain Name (i.e. <clever.cloud>) is identical to the Complainant’s Trademark (i.e. “Clever Cloud”).
- ii) The Respondent Has No Rights or Legitimate Interests over the Subject Domain Name
The Complainant contended that: (a) the Respondent never acquired any trademark rights in relation to the Subject Domain Name, and (b) the parties’ written communication (as produced by the Complainant) shows that the Respondent’s only interest in the Subject Domain Name was to sell it at the highest possible price.
Firstly, the Respondent alleged that he had already been using the Subject Domain Name (together with an associated email address), and planned to launch the colouring book project in 2021. As evidence, the Respondent produced:
- records of a detailed concept and business plan for the colouring book project;
- records of research on trademark protection and potential competitors conducted in 2015 showing the Respondent was made aware of the Complainant’s Trademark;
- records of the Respondent’s detailed analysis of the Complainant’s Trademark and business concluding that the operation of the colouring book project has no conflict with the rights subsisting in the Complainant’s Trademark because:
- the parties’ goods, services and businesses are different, and
- the parties’ designated markets (German speaking markets vs French market) are also different;
- pictures of the colouring books (showing prints of <[email protected]>, an associated email address in various parts of the books); and
- records of offering of supporting material for the colouring book project (e.g. merchandise articles).
As foregoing, the Panel is satisfied by the above evidence that the Respondent “had made demonstrable preparations to use the domain name in connection with a bona fide offering of goods or services”.
Secondly, the Panel also found the communications the Complainant provided as evidence of the Respondent’s intention to only sell the Subject Domain name at the highest possible price unconvincing as (a) the Respondent never actively approached the Complainant, (b) the Respondent rarely responded to the Complainant’s attempts to buy the Subject Domain Name, and (c) there is no concrete indication that the Respondent actually tried to sell the Subject Domain Name to the Complainant.
On balance, the Panel therefore found that the Respondent has successfully rebutted the Complainant’s contention that the Respondent has no rights or legitimate interests over the Subject Domain Name.
iii) The Subject Domain Name Has Been Registered and Is Being Used in Bad Faith
Based on the Respondent’s evidence as set out under sub-section (ii) above, especially the Respondent’s record of due diligence and infringement analysis conducted before the registration of the Subject Domain Name, the Panel also found that the Respondent had registered and been using the Subject Domain Name in good faith.
In light of the above, the Panel has dismissed the complaint as the Complainant failed to establish all three required grounds for a domain name complaint.
As demonstrated in the above case study, a thorough and properly documented due diligence is highly recommended before registering a domain name. Where identical or similar trademarks are identified, legal opinion from lawyers or professionals should be obtained as it may be hugely helpful in defending against any wilful or bad faith infringement claim. Businesses should also keep good records of such research and analysis at all times as claims and complaints may be filed years after the registration of the domain name, e.g. the above domain name complaint was filed more than 4.5 years after the registration of the Subject Domain Name.