Misrepresentation in UDRP Proceeding Violates ACPA

Uniform Domain-Name Dispute-Resolution Policy (UDRP) proceedings are easy to bring, and, some say, easy to abuse.  One recent case, if the plaintiff's allegations are true, illustrates the latter point.  Misrepresenting, in a UDRP proceeding, the nature of a web site allegedly using an infringing domain name gave rise to a civil action under the Anticybersquatting Consumer Protection Act for injunctive relief and damages.  ISystems v. Spark Networks, No. 10-10905, (5th Cir. March 21, 2012).

Isystems owned the "jdate.net" domain name, which it used to market Julian date computation software.  Isystems also allowed a non-profit Jewish dating organization to use a subdomain of jdate.net.  Spark Networks owned both the "JDate" mark "for facilitating the introduction of individuals," as well as the domain name "jdate.com."  After allegedly misrepresenting that jdate.net was a commercial, rather than a non-profit, dating site, Spark Networks prevailed in a UDRP proceeding for transfer of the jdate.net domain name.

Isystems then brought a civil action alleging, among other claims, that Spark Networks' misrepresentations in obtaining the domain name transfer warranted both damages and a re-transfer of the domain name under 15 U.S.C. § 1114(2)(D)(iv).  Isystems also sought a finding  "that the registration or use of the domain name" was "not unlawful" as set forth in 15 U.S.C. § 1114(2)(D)(v).  The district court dismissed Isystems' claims, including the foregoing claims under the ACPA.  The Fifth Circuit reversed the dismissal of Isystems' ACPA claims.

15 U.S.C. § 1114(2)(D)(iv) provides that if a registry transferred a domain name "based on a knowing and material misrepresentation by any other person that a domain name is identical to, confusingly similar to, or dilutive of a mark, the person making the knowing and material misrepresentation shall be liable for any damages, including costs and attorney’s fees, incurred by the domain name registrant as a result of such action," and that injunctive relief was available "to the domain name registrant, including the reactivation of the domain name or the transfer of the domain name to the domain name registrant."  Not only had Spark Networks allegedly misrepresented the nature of the jdate.net site, but the UDRP arbitrator had specifically relied on a finding that the site was commercial.  Therefore, Isystems had pled sufficient facts to proceed on a claim under 15 U.S.C. § 1114(2)(D)(iv).

15 U.S.C. § 1114(2)(D)(v) allows a "domain name registrant whose domain name has been suspended, disabled, or transferred" to "file a civil action to establish that the registration or use of the domain name by such registrant is not unlawful under" the Lanham Act, and further to obtain injunctive relief including retransfer of the domain name.  The test for "unlawful" use of the domain name was whether that use was in bad faith.  Here, Isystems alleged that it registered jdate.net solely to market its JDATE software.  The "Jewish Dating Network Charity" used the www.jdate.net subdomain without paying any compensation, was strictly not-for-profit, and the subdomain was not used by Isystems to market its software in any way.  Thus, Isystems' allegations, taken as true, were sufficient to establish a lack of bad faith.