IP Cases & Articles

FloJo - bad faith under WIPO dispute resolution policy

This decision reminds us of the stringent 'double test' applied when assessing whether a domain name satisfies the requirements for bad faith.

Background to flowjochina.com dispute

FlowJo, the complainant to this dispute, owns the registration for the word trade mark 'FLOWJO' at the US Patent and Trademark Office in relation to computer software products and operates a commercial website at flowjo.com where it promotes various software products under its trade mark.

FloJo had entered into an independent contractor agreement (ICA) with the respondent, appointing them to market, support and encourage sales activity within China and the surrounding territories in exchange for commission. To perform these duties, the respondent registered and operated a website from the domain name flowjochina.com which formed the subject of the dispute. The complainant was aware of the respondent's registration and the associated website and made no objection prior to the termination of the ICA.

After the complainant terminated the ICA the respondent took down the website but refused to transfer the disputed domain name to the complainant. Under the registration agreement the respondent was required to submit to a mandatory dispute resolution proceeding regarding allegations of abusive domain name registration and use.

Decision of the WIPO arbitration and mediation center

The complainant's objection was that the domain name registered to the respondent was identical or at least confusingly similar to its FLOWJO trade mark and that they lacked rights or legitimate interests in it. It further alleged that the registrant had acted in bad faith in refusing to transfer the domain name and was attempting to capitalize on the complainant's goodwill within the Chinese market.

The respondent argued that they are the owner of the domain name and have undertaken no actions in bad faith, as the complainant was fully aware of their registration of the disputed domain name and gave its consent.

The administrative panel considered the three essential elements under the WIPO Dispute Resolution Policy that must be established by a complainant:

  1. The disputed domain name is identical or confusingly similar to a trade mark in which the complainant has rights.
  2. The respondent has no rights or legitimate interests in respect of the disputed domain name.
  3. The disputed domain name has been registered and is being used in bad faith.

The double test applied

The third requirement proved the determining factor in this decision. The wording makes it clear that: "a prerequisite for an adverse finding is that the domain name has been registered in bad faith, in addition to being used in bad faith."

Both of these elements must be satisfied (the double test). Since the disputed domain name was registered by the respondent further to entry into a contractual arrangement under the ICA, and the complainant was both aware of and consented to the registration, the complainant was unable to demonstrate that the domain name had been registered in bad faith. Thus, the double test could not be satisfied even if subsequently the registration was being used in bad faith. As a result, the complaint was denied.

A different approach

This approach can be contrasted with that under the Dispute Resolution Service Policy provided by Nominet, which is applicable to .uk domain names. Under this policy a domain name meets the definition of 'abusive registration' if it was either registered/acquired in a manner which took unfair advantage or was unfairly detrimental to the Claimant's rights, or is being used in such a manner. This either/or test is much easier to satisfy than the double test at WIPO.

In short

This case serves as a reminder of the difficulty claimants face in demonstrating bad faith under the WIPO policy and the rigidity of the double test that is applied. It also illustrates the difficulty that can arise when applying the policy in real-life situations where parties, who may at one time have had a cordial relationship, have subsequently fallen out.

Case details at a glance

Jurisdiction: Wordwide
Decision level: WIPO arbitration and mediation center administrative panel
Parties: FloJo LLC and PRIVATE REGISTRANT, A HAPPY DREAMHOST CUSTOMER of Brea, California, US / Qianjun Zhang of Elk Grove, California
Date: 08 November 2016
Citation: D2016-1896
Full decision: http://dycip.com/wipoflojo

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