31 August 2005

Always consider the UDRP first

This is the second time today that I have written this post. The first version was deleted by the browser when I tried to run the spell check. I don't know why I bother with the spell check anyway because it tries to transform standard English into US dialect. You know the sort of thing, "center" for "centre" and "labor" for "labour".

I am prompted to write this post because my usual super-duper computer loaded with the very latest operating system and applications (including antivirus software updated as recently as 26 Aug 2005) has caught a bit of a bug. Hoping that this is the computer equivalent of a summer cold rather than avian flu, I have taken my ailing electronic pet back to the chap whose talented lads put together my impressive kit in the first place.

My supplier is now a mate but he first came to me as a client under the public access rules. I don't normally talk about my cases - partly because that sort of thing is restricted by the Code of Conduct but mainly because I find other lawyers' stories rather boring. However, I mention this one because it shows the savings of time and money that can be made with the UDRP and the panellist's decision extends the scope of the Policy in a way that may be useful in other cases. It also shows how well the public access rules can work.

My client ran a mail order computer business in the 1990s. He had won quite a few accolades for his products in the computer press. He had even supplied a PC to Buck House and I have visions of HM and HRH using it to download the racing pages from the internet. He started out as a sole trader and registered a trade mark in his own in class 9 for computers and computer systems and equipment. He was later joined by his brother and they set up a company. The company registered a generic top level domain name in the name of the trade mark with my client's permission. The business ran into cash flow difficulties as a result of the computer buying public's disilluionment with IT following the Y2K non-event and the .com bust. The company had to be wound up and a liquidator was appointed.

The liquidator appointed a firm of estate agents to realize the company's assets. One of those assets was the domain name which the estate agents sold to one of my client's main local competitors. The competitor registered the domain name not in his own name but that of the dissolved company.

My client, who still had his registered trade mark, reverted to trading under his old name as a sole trader. The competitor used the domain name to promote his company's business. On the home page he stated that my client's business was in association with his. My client visited the respondent, showed him his certificate of registration and offered to buy back the domain name. The respondent was not prepared to sell it, at least not for a price that my client was willing to pay.

My client consulted one of the best law firms in Leeds who wrote what we call a "letter of claim" and Americans a "cease and desist letter". The other side went to a slightly smaller but still posh firm who wrote what we call a "letter of response". Although couched in very polite language, it amounted to a request to get lost. The argument was that the domain name had been bought in good faith for valuable consideration and that my client was now passing his business off as that of the respondent.

My client was advised to sue but the cost of proceedings even in the Leeds District Registry would have been substantial. The claim would have taken weeks to come on for trial. There was no guarantee that my client would win. If he failed, he would risk paying the other side's costs as well as his own.

I understand that it was about that time that my client's 18 year old son (who was then doing his "A" levels - that is to say, that he was the equivalent of a high school senior in the USA) noticed my materials on domain names on our old chambers website. He told his father about me and my client made an appointment to see me under the public access rules.

At the conference I asked my client why his top drawer solicitors had not made an application under the UDRP and was amazed to be told that they had never discussed it with him. After thinking about it more, I surmised that the top draw law firm might have decided that administrative proceedings would not work because of fears that they might not clear the hurdles set by para 4 (a) (ii) and (iii) of the Policy. I took the view, however, that it was still worth a go because UDRP applications do not cost very much and there is no risk of an adverse costs order.

Because barristers still can't conduct litigation under the public access rules, I introduced my client to Janet Bray, an excellent local patent agent to do the filing. I settled the complaint. I had no trouble with para 4 (a) (i) because my client had a registered trade mark. That also helped me clear the second hurdle of para 4 (a) (ii). I was also helped by the fact that the respondent had registered the domain name not in his own company's name but in that of the dissolved company. The notice on the home page that my client's business was in association with the respondent's satisfied the 4th probandum.

The problem was para 4 (a) (iii) because the domain name had been registered originally by my client. I submitted that "registration" applies to a subsequent transfer as well as an original registration citing authority that the top drawer law firm really should have known. I argued that registration in the name of a dissolved company in disregard of a registered trade mark for the purpose of diverting my client's traffic to the competing site had to be bad faith. Fortunately, the panellist, Ian Blackshaw, agreed with me.

Had my client chosen to sue he would probably still be at the disclosure ("discovery" across the Atlantic) stage. The cost of issuing a claim form would not have been far short of the WIPO Arbitration and Mediation Centre's filing fee. The cost of settling particulars of claim would not have been less than that of settling the complaint. Counsel or a solicitor advocate would also have had to settle or review witness statements, draft skeleton arguments and appear on a case management conference and trial. There might also have been an inquiry as to damages which would have been almost as expensive as a trial. There would also have been the cost of serving the claim form and all sorts of interim applications. There would certainly have been an assessment of costs. Even though court lists are shortening my guess is that my client would have been lucky to come of to trial in less than a year. An inquiry would have taken another year. Costs assessments would have taken even longer.

Contrast that with what actually happened. Settling the complaint took somewhat over an hour for which I charged £350 + VAT. There would have been the filing fee of US$1,500. There was quite a lot of photocopying which my client took to Staples. And Janet would have charged something for filing. Even if my client had won, been awarded costs on the standard basis and actually recovered them, the likelihood is that he would still have been a great deal more out of pocket. The application was launched in April and Mr Blackshaw's award was published on 11 July. As the Americans would say in the language that my spell check understands, the choice between litigation and the UDRP is a "no brainer."

Relevant Post: "Hallelujah! More Entertainment from across the Atlantic"

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