Stark Reminders of the Very High Bar for a URS Dispute

As the Uniform Rapid Suspension System (URS) makes clear, this new domain name dispute policy "is not intended for use in any proceedings with open questions of fact, but only [for] clear cases of trademark abuse." Indeed, unlike the well-established Uniform Domain Name Dispute Resolution Policy (UDRP), which has a lower burden of proof, the URS explicitly sets a very high bar for a trademark owner: "clear and convincing evidence."

A pair of URS determinations involving a very well-known trademark makes clear just how high this bar really is -- and the decisions should serve as a warning to trademark owners that might want to reconsider whether (or, at least, when) the URS is an appropriate legal path to pursue.

Both of the decisions relate to the trademark NETFLIX, in two URS cases filed by Netflix, Inc., against separate domain name registrants. The NETFLIX trademark is quite popular for its association with video rental and video-on-demand services. Indeed, one tech site reported in a headline, "Netflix is now more popular than eating and sex."

Yet, in both URS cases -- involving <> and <> -- the trademark owner lost, allowing the registrants to keep their domain names.

For those unfamiliar with the domain name dispute system, the Netflix losses might seem stunning. And for those familiar only with the UDRP, the decisions against a well-known trademark owner might seem perplexing. But, a basic understanding of the URS and a simple reading of the determinations is enlightening.

To be clear, in both cases the examiner found that the disputed domain names were identical or confusingly similar to the NETFLIX trademark. But that conclusion addresses only one of the URS's three legal tests.

Passive Holding

In the <> case, Netflix admitted that the registrant was not using the domain name, and the registrant somewhat confusingly said that he was "not the registered owner" of the domain name (despite a verification from the registrar). While the UDRP contains a well-established doctrine of "passive holding" that nevertheless can give rise to bad faith even where a domain name is not being used (emanating from the oft-cited Telstra Corporation Limited v. Nuclear Marshmallows decision), the examiner in the <> case concluded: "I find that the evidence is not clear and convincing that the domain name is being used in bad faith." As a result, Netflix failed to prove all three elements of the URS and lost the case.

Fan Site

In the <> case, decided by the same examiner, the registrant insisted that he intended to create a fan site using the domain name, "with news and updates on the Complainant’s service." The URS examiner obviously had suspicions about the truth of this statement, noting that it was "self-serving" and that "Respondent has failed to put into the record any facts which support his claim." Despite this, however, the examiner observed that the URS requires an examiner to reject a complaint if "genuine issues of material fact remain in regards to any of the elements." As a result, the examiner concluded: "Because this record raises, but does not provide adequate information to conclude whether or not Respondent has a legitimate right or interest to the domain name, I must find for the Respondent on this element."

Lessons Learned

To be clear, both of the issues in the Netflix cases -- passive holding of a domain name and a declared interest in creating a fan site -- are commonly raised in UDRP cases but (unlike the outcomes here) frequently result in decisions for trademark owners.

And, the passive holding fact pattern has arisen in multiple URS cases with determinations that favor trademark owners. Indeed, in another URS case also involving the NETFLIX trademark (and the domain name <>), an earlier URS examiner issued a decision in favor of Netflix, writing: "Respondent’s current 'passive' use of the disputed domain name is another factor that supports a finding of the requisite bad faith."

So, how can the outcome in the <> and <> URS cases be justified? The answer lies in the "clear and convincing" burden of proof for URS proceedings as well as the significant limitations on trademark owners to argue their cases (including a minuscule 500-word limit).

As a result, the lesson is clear: Not all domain name disputes are appropriate for the URS, which creates a very high bar for trademark owners and important advantages for domain name registrants.