In the recent decision of Sanosil AG v. Ammar Matouk, WIPO Case No. D2023-1174, the Panel rejected the concept of ‘retroactive bad faith registration’ in the context of domain name dispute proceedings under the UDRP.
The Complainant and Respondent entered into a joint venture agreement (‘JVA’), under which the company ‘SANOSIL MENA’ distributed SANOSIL-branded products in the Middle East. Two months prior, the domain <sanosil-mena.com> was registered by Ammar Matouk, who the Respondent claimed was acting as an agent on behalf of SANOSIL MENA at the time. The JVA was silent on the registration of domains. After ten years of business, the Complainant terminated the JVA by way of formal notice and ordered the Respondent to stop using the SANOSIL trade mark, including on the website to which the domain name resolved.
Subsequently, the Complainant initiated domain proceedings against the Respondent by filing a complaint with WIPO. In relation to the third element of the Uniform Domain-Name Dispute-Resolution Policy (‘UDRP’), the Complainant argued that the domain was registered in bad faith and, in any case, the third element of the UDRP was satisfied by the concept of ‘retroactive bad faith’.
‘Retroactive Bad Faith’
Retroactive bad faith was first conceptualised in Octogen Pharmacal Company, Inc. v. Domains By Proxy, Inc. / Rich Sanders and Octogen e-Solutions, WIPO Case No. D2009-0786 (the ‘Octogen case’). The concept encompasses circumstances in which a registration in good faith is reversed by future use of the domain name in bad faith, thereby rendering the registration in bad faith retrospectively. For example, renewing a domain despite no longer being affiliated with the trade mark owner (Rigol Technologies, Inc. v. John Bran, WIPO Case No. D2012-1947) and registering a domain to use it as leverage in commercial contract negotiations (Albino Vargas Ozuna v. Francisco Javier Gomez Vasquez, WIPO Case No. D2017-1328).
It was surprising to see the Complainant rely on this concept, as it had been largely rejected by WIPO Panels in recent decisions. For example, in Schoffstall Farm, LLC v. Privacy.co.com - 80580, Savvy Investments, LLC Privacy ID# 1048451 / Ashantiplc Limited, WIPO Case No. D2020-0591, the Panel stated that the line of decisions following the Octogen case had been discredited.
It appears that Complaints relying on retroactive bad faith will likely fail on the third element of the UDRP, save for exceptional cases with highly distinguishable facts. Therefore, Complainants should generally avoid submitting arguments of bad faith based on this concept.
Additionally, this case emphasises the importance of properly addressing domains when negotiating and drafting commercial contracts. Parties should include clear provisions in the Heads of Terms and the contractual agreement that expressly deal with domains, covering registrations, transfers and renewals. Typically the best option is to have the trade mark owner register the domain. Alternatively, the trade mark owner could grant permission to the other party to register the domain for a short-term period, after which the other party would need to either transfer the domain to the trade mark owner or obtain approval to renew the domain.