Policy, ¶4(a) provides that the respondent is “required to submit to a mandatory administrative proceeding in the event that a third party (a ‘complainant’) alleges” that its trademark is the target of an abusive registration. However, the term “mandatory” should not be understood as meaning that the registrant itself must participate in the proceeding – indeed respondents default approximately 85% of the time; although in a small percentage of instances they prevail because of deficiencies in the complainant’s submission. Rather “[y]ou are required to submit to a mandatory administrative proceeding.” The term refers to the respondent’s contractual “agreement” to submit the domain name to an impartial arbitrator to determine a complainant's claim of abusive registration. A typical statement that anchors the respondent to its obligation is the following in Affliction, Inc. v. Chinasupply c/o Tan Longli, FA0809001223521(Nat. Arb. Forum October 23, 2008):
On September 8, 2008, Enom, Inc. confirmed by e‑mail to the National Arbitration Forum that the <afffflictionshirt.com> domain name is registered with Enom, Inc. and that Respondent is the current registrant of the name. Enom, Inc. has verified that Respondent is bound by the Enom, Inc. registration agreement and has thereby agreed to resolve domain‑name disputes brought by third parties in accordance with ICANN's Uniform Domain Name Dispute Resolution Policy (the "Policy") (Emphasis added).
The procedure to which the registrant assents is mandatory in that it compels it – an unwilling even if absent participant – to be a respondent in a UDRP proceeding; or, at the registrant’s option to become a plaintiff in an action for declaratory judgment under the Anticybersquatting Consumer Protection Act. Abstention risks losing the domain name because failure to respond where an explanation is called for is an indication that there is no explanation to give. MC Enterprises v. Mark Segal (Namegiant.com), D2005-1270 (WIPO January 27, 2006):
Although a respondent is not obliged to participate in a domain name dispute, if it were to fail to do so, it would be vulnerable to the inferences that flow naturally from a complainant’s not unreasonable assertions of fact.
The prevailing view is that although non participation leaves the Respondent open to negative inferences, default is not an admission of abusive registration “unless clearly contradicted by the evidence,” Desotec N.V. v. Jacobi Carbons AB, D2000-1398 (WIPO December 21, 2000). The Panel’s duty is “not to assume Complainant’s factual allegations are true simply because there has been no response, but, as in any other case, to require the complainant to prove each of the required elements under the Policy with competent evidence,” TPI Holdings, Inc. v. LaPorte Holdings, D2006-0235 (WIPO April 7, 2006).
Set off against this standard, and inconsistent with it if not in application then in expression, are such cases as Talk City, Inc. v. Robertson, D2000-0009 (WIPO February 29, 2000) (“[i]n the absence of a response, it is appropriate to accept as true all allegations of the Complaint”; Bench ark Staffing, Inc. v. Parker, D2002-0226 (WIPO May 30, 2002) (“[Respondent’s default] entitles [it] to assume the truth of the allegation[s].” These views imply a civil pleading standard rather than the balancing of rights idealized in the WIPO First Report.
Panelists certainly agree that while respondent’s failure to respond is not necessarily fatal, it does give complainant an advantage if its allegations are plausible and supported by the record. Talk City and similar cases appear to stand on one end of the discourse. In Viacom International Inc. v. Ir Suryani, D2001-1443 (WIPO May 20, 2002), the Panel found that since
the Respondent has not submitted any evidence and has not contested the contentions made by the Complainant, this Panel is left to render its decision on the basis of the uncontroverted contentions made, and the evidence supplied, by the Complainant.
This suggests that “uncontroverted contentions” are sufficient in themselves, which is misleading. The Panel in TPI Holdings, Inc., supra., warns that “[s]tatements of counsel are not evidence, and in the Panel’s view the Policy requires evidence, not just factual allegations.”
A distinction should be drawn between “allegations of fact” and “allegations of inference.” An allegation of fact asserts the existence or non-existence of an act or a status, for example that the Complainant did not grant Respondent permission to register and use the disputed domain name. If a fact is not denied it is deemed admitted, absent evidence to the contrary. Thus, Solahart Industries Pty Ltd. v. Ciccarelli Luigi, D2006-0051 (WIPO April 16, 2006):
Complainant alleges that Respondent registered the Domain Name without Respondent’s permission. Respondent had an opportunity to contest that assertion of fact, but has chosen not to do so.
In contrast, an allegation of inference asserts as a fact an act of which the Complainant could have no knowledge, for example that the Respondent registered the domain name in bad faith. An allegation of inference is infirm because conclusory.
While failure to submit a response in combination with Complainant’s presentation of a prima facie case allows the Panel to draw adverse inferences of rights or legitimate interests, there must still be evidence of registration and use in bad faith. One line of cases emphasizes that default allows a panel to draw “reasonable” inferences in favor of a complainant, Wells Fargo & Co. v. Shing, FA 205699 (Nat. Arb. Forum December 8, 2003).
The Panel in Vanguard Group, Inc. v. Collazo, FA 349074 (Nat. Arb. Forum December 1, 2004) stated that it was entitled to accept all reasonable allegations and inferences set forth in the Complaint as true “unless the evidence is clearly contradictory”; similarly, Advanta Corp. v. ADVANTACARD INTL. INC., FA0601000625997 (Nat. Arb. Forum March 1, 2006). A different Panel in Honeywell Int’l Inc. v. Domain Deluxe, FA 269166 (Nat. Arb. Forum June 29, 2004) qualified the “reasonable” it would apply by stating the Respondent’s failure to respond to the complaint “functions both as an implicit admission that Respondent lacks rights to and legitimate interests in the domain names, as well as a presumption that Complainant’s reasonable allegations are true.”
However the consequence of default is expressed, a clear distinction should be drawn between the ¶4(a)(ii) and ¶4(a)(iii) requirements. While it is appropriate to regard as true unchallenged allegations that a Respondent has no right or legitimate interest in the domain name, it is inappropriate to conclude from mere default that Respondent registered and is using the domain name in bad faith. It can be said that while the ¶4(a)(ii) requirement is satisfied with a weak inference, ¶4(a)(iii) requires something more concrete to support conclusive inferences of bad faith. Thus, in Matthew Wright , Matt’s Script Archive, Inc. v. Klemen Stirn, D2005-0036 (WIPO March 15, 2005):
The Panel notes with approval the principle that a descriptive domain name, derived from the combination of two ordinary English words, will trigger a heavier burden of proof to establish bad faith, as compared to disputes where the mark in issue is a coined or fanciful term.