Imagine that you’re one of the top-selling producers of snack cakes under a very famous 90-year-old brand. Next, imagine that someone has registered a domain that is identical to your brand and that this someone happens to be a domain investor who owns thousands of names and has been on the losing end of two prior UDRP decisions. Finally, add to the mix the fact that this someone demanded tens of thousands of dollars to obtain the domain. Sounds like the set up for a pretty simple UDRP win, doesn’t it? That may be what Hostess Brands, Inc. thought. Unfortunately, a WIPO Panelist disagreed and recently denied a UDRP complaint against the <hostess.com> domain. Hostess Brands, Inc. f/k/a Interstate Bakeries Corporation v. Domain Capital, WIPO Case No. D2009-1357.

This decision is a study in the limits of enforcement against a generic term and how important the surrounding facts can be in such disputes.

Having found that the domain is identical to the famous HOSTESS trademark under section 4(a)(i) of the UDRP and that Respondent had no right or legitimate interest in the name under section 4(a)(ii), the Panel’s inquiry turned on the question of the Respondent’s bad faith under section 4(a)(iii).

The Complainant claimed that the Respondent had set up a placeholder Web site under the domain but pulled it down soon after receiving an adverse UDRP decision in another dispute. Unfortunately, the Complainant had apparently not put proof of this placeholder site into evidence and the Panel found that “there is no allegation that Respondent has ever used the Domain Name in connection with the goods and services covered by Complainant’s trademarks.”

Further, the Complainant asserted that, in response to its offer of $5,000 to buy the domain name, the Respondent sought payment of $20,000. However, Respondent denied, in a sworn statement, that any such offer and counteroffer were ever made. Recognizing that there is no discovery permitted under the UDRP and that a different result might be obtained in a court, the Panel accepted Respondent’s statement but tacitly warned that “if Respondent, in the future, would attempt to extract a significant sum from Complainant for purchase of this Domain Name identical to Complainant’s HOSTESS trademark, these circumstances may provide support for application of the Policy’s paragraph 4(b), indicating bad faith”.

Also working against the Complainant was the fact that the domain was solely composed of the common word “hostess,” which is subject to substantial third-party use, both generically and as a trademark. A Google search yielded many millions of results apart from those referring to Complainant. Further, the Respondent cited at least 22 third-party registered U.S. trademarks that incorporate the word “hostess,” including 7 for that word standing alone.

In the end, the Panel declined to find that Respondent acted in bad faith saying that “[a]lthough the Domain Name is identical to Complainant’s well-known trademark, Respondent is correct when it emphasizes that ‘hostess’ is also a common word subject to substantial third-party use. Without any further evidence of specifically targeting Complainant and its trademarks, or use of the Domain Name in a manner that supports a finding of seeking to profit from Complainant’s mark, this Panel cannot, on the balance of the probabilities, adopt the inferences which Complainant urges.”

The main lessons of this decision are two-fold. First, when faced with a possibly generic or descriptive word carefully examine and consider all of the surrounding circumstances – especially any use, or lack thereof, by the domain owner that refers to the brand owner. Second, be very careful to capture evidence while it is still available – especially changeable Web sites – and document all evidence in your case, by declaration if necessary.

This July, the World Intellectual Property Association (WIPO) proposed a series of amendments to ICANN’s Uniform Domain-Name Dispute-Resolution Policy (UDRP) to make the UDRP process paperless.  In its proposal, WIPO mentioned that it had received over one million pages from UDRP filings in 2008 alone, and approximately ten million pages since the establishment of the UDRP.  The new process, dubbed eUDRP, will not require any hard copy submissions, but rather will be done completely electronically.  WIPO believes that these amendments will make the process more effective, saving both time and money; more forward-looking, because most participants already file electronically; more effective, because it is generally easier to reach other parties through email; more modern; more expedited; and obviously, greener.

I think it’s great that WIPO has taken the initiative to streamline the UDRP process in this way, since a paperless procedure can be much more practical and much more efficient. For one, the changes will eliminate the costs associated with printing and shipping hard copies of documents. They will also allow complainants to contact respondents via email, which has proven to be effective—according to WIPO, email notification is successful in 96% of cases.  

For some, however, this is a point of contention; among the comments submitted to ICANN regarding this matter, the main criticism has been that email is not as reliable as a hard copy letter or a fax, and as such, could put Respondents at a disadvantage, or otherwise lead to default decisions based on non-response.  However, WIPO has proposed that Complainants still be required to provide a written notice to inform the Respondent of the complaint, along with detailed contact information, in order to give the Respondent adequate opportunity to participate in the proceedings.
 
WIPO’s proposed amendments take advantage of technology’s ability to expedite procedures, reflect current attitudes toward environmental conservation and will ultimately make the whole UDRP process much more efficient and easier for all parties.