Domain arbitrator lashes brand owner in cybersquatting row

In a ruling that could cause a “tectonic shift” in the way domain name arbitrators approach the laches legal doctrine, a panellist refused to transfer a website despite its copying a company’s trademark.

Laches can provide a defence when a brand owner has unreasonably delayed asserting its rights, and the defending party’s reliance on the delay causes it harm. This harm can result from its having built a legitimate business around the domain over time.

The panellist at the World Intellectual Property Organization (WIPO) was ruling in a dispute over victoriassecrets.com.au. The website wholly incorporated the trademark of Victoria’s Secret, a US lingerie retailer.

Although the site has a .au (Australian) registration, WIPO panellists can oversee disputes using the .au dispute policy. The policy is very similar to the UDRP, which is used to resolve most domain disputes.

The decision hinged on the seven-year delay between Victoria’s Secret’s demand that the website be removed and its filing a complaint with WIPO. When such a long delay occurs, panellists consider the laches defence, a legal doctrine that is not actually mentioned in the UDRP.

Panellists have usually asserted that laches doesn’t apply because the domain continues to inflict harm on the brand owner, despite the delay. But in Victoria’s Secret v Linda Cameron Pickard, Andrew Christie denied the complainant the site on July 3, 2012. He said the respondent was entitled to conclude that Victoria’s Secret had stopped pressing its allegations of infringement. From that time forward, he said, it became possible for the respondent to acquire a right or legitimate interest in the domain through subsequent its use of it, only if the subsequent use was bona fide.

He said the continued use of the domain became bona fide because the complainant no longer objected to the respondent’s behaviour. But he said the use could again become illegitimate if the respondent began selling products that competed with Victoria’s Secret’s.

Steve Levy, of domain name consultants Fairwinds, said this could be the first ruling of its kind and could cause a “tectonic” shift in the perspective on laches.

“While this seems to be a very rare exception to the view that laches doesn’t apply to domain disputes, it leaves the door open just a crack for future panellists to find other circumstances where a long delay might bar an otherwise good claim,” he said.

He said brand owners must be prepared for this and aggressively pursue claims against infringing domains or “risk being shut out of the dispute arena some years later”. “While this may not result in great harm to the brand in every case, it should be considered as part of a sound enforcement strategy.”

But Levy said he expects panellists to continue viewing laches as a defence that requires a very high bar, meaning it will be “successfully applied in only the rarest of cases”. “If anything, this decision could embolden a panellist to tip over into applying the defence where he or she may have been on the fence before.”