Against cases initiated under the Uniform Domain Name Resolution Policy the consensus is that laches is not a defense to a claim of violation. Paradoxically, however, lapse of time may be fatal. In contrast, laches can be a viable defense to a claim for trademark infringement under the Lanham Act if “during the plaintiff’s delay in bringing suit, the infringer developed an identity as a business based on the mark,” Internet Specialties West, Inc. v. Milon-Digiorgio Enterprises, Inc., 2009 U.S. App. Lexis 5454, 15 (9th Cir. 2009). Offsetting this principle is another that holds that mere delay cannot be said to be prejudicial – even, as in Internet Specialties West, when the plaintiff takes no action for six years – if the defendant developed its business based on strategies other than the mark. Prejudice requires proof that the defendant “has continued to build a valuable business around its trademark during the time that the plaintiff delayed the exercise of its legal rights,” citing Grupo Gigante S.A. de C.V. v. Dallo & Co., 391 F.3d 1088, 1102-03 (9th Cir. 2004)(Court’s emphasis) . The emphasis on “around its trademark” and “based on the mark” rests on
a simple premise that MDE cannot create ‘public assocation’ between ISPWest and the company if it does not even use the ISPWest mark in its most prevalent form of advertising. Id., Lexis 5454 at 14.
Although Internet Specialties West arose out of the defendant’s use of a domain name confusingly similar to the plaintiff’s trademark, the battle was fought under Section 43(a) of the Lanham Act without reference to the Anticybersquatting Consumer Protection Act (“ACPA”). The Plaintiff sought a permanent injunction against use of the domain name rather than a declaration of its right to the domain name. Interestingly, the principle stated in Grupo Gigante and approved in Internet Specialties West finds its counterpart in ¶4(c)(i) of the Policy. Lapse of time rather than the formal defense of laches can be fatal to the complainant’s attempt to capture the disputed domain name. Paragraph 4(c)(i) states that if prior to the respondent receiving notice of the dispute it is using or has made “demonstrable preparations to use a domain name identical or confusingly similar to a trademark in connection with a bona fide offering of goods or services” it has a right or legitimate interest in it and the domain name cannot be forfeited to the trademark owner.
The WIPO Final Report does not contain the word “equity,” although it does state in a number of sections that the proceeding has to be “consistent with fundamental concerns of fairness” (¶143). Fairness involves a balancing of interests and this justifies creating an equity like defense by which the respondent can establish a right or legitimate interest in the disputed domain name. In a number of recent UDRP cases complainants appear to have come out of hibernation to challenge respondents’ rights to disputed domain names. Arizona Board of Regents on behalf of the University of Arizona v. DNS, Admin, Nevis Domains / Gee Whiz Domains Privacy Service, D2008‑1543 (WIPO December 9, 2008) is illustrative. The domain name <arizonawildcats.com> was registered in 1999 and the proceeding was commenced in October 2008. The Panel noted that at “all relevant times, the domain name has led to a site displaying advertising from which web‑users may “click through” to various sites, including, for example, NFL and NBA sports sites.” The Respondent defaulted in appearance and lost.
Assuming, however, that the Respondent had appeared and said, “Hey, wait a moment, the Arizona Board of Regents slept on its rights. I’m entitled to keep the domain name.” Like federal law, mere passage of time does not give the respondent rights or legitimate interests it would not otherwise have. It has to earn its right to the domain name by using it legitimately. Panelists early reached consensus that “there is no room for general equitable doctrines under the Policy such as would be possessed by Courts in common law jurisdictions,” Edmunds.com, Inc. v. Ult. Search Inc., D2001‑1319 (WIPO February 1, 2002); Hebrew University v. Alberta Hot Rods, D2002‑0616 (WIPO October 7, 2002). Thus, by itself “[c]ontinuous use adverse to the interest of Complainant is not a basis from which Respondent can acquire rights in the domain name” unless it can bring itself within ¶4(c)(i) of the Policy, Avaya Inc. v. Holdcom, FA0806001210545 (Nat. Arb. Forum August 9, 2008).
However, there has to be more than slumbering on a right to deny a complainant its remedy. This does not mean to say that lapse of time is not a serious barrier to complainant’s success in claiming the disputed domain name. The complainant still has to prove respondent’s bad faith in registering and using the domain name but the difficulty increases if in the interim the respondent has brought itself within ¶4(c)(i) of the Policy. A representative example of the complainant’s difficulty is Educational Testing Service (ETS) v. Morrison Media LLC, D2006‑1010 (WIPO December 5, 2006) (“The Panel finds that Respondent has been conducting, since well before he received notice of this dispute, a legitimate business selling test preparation materials.”)
Particularly in those cases in which respondents choose to appear, explain and offer proof, lapse of time is a significant factor in determining whether it has acted in good or bad faith. The problem has engaged panelists from the earliest cases. In Square Peg Interactive Inc. v. Naim Interactive Inc., FA 209572 (Nat. Arb. Forum Dec. 29, 2003) (<gototrafficschool.com>), the Panel noted that although laches by itself is not a defense, “Complainant's delay in seeking relief is relevant to a determination of whether Respondent has been able to build up legitimate rights in the Domain Name in the interim, and whether it is using the Domain name in bad faith.” The Panel concluded that if
a trademark owner accuses another party of infringement but then fails to pursue the matter diligently, it may in some cases be concluded that the trademark owner has abandoned its claim and the accused infringer may be able to build up trademark rights.
Lapse of time works particularly against the Complainant whose trademark is composed of generic terms, common words or descriptive phrases. It does not work against well known or famous trademarks or even lesser known trademarks where there is evidence that the respondent registered and is using the domain name for its associative value with the complainant or its mark; has in fact targeted the complainant for the value of its trademark.