When a UDRP Complaint Is Denied
You may believe you have the most straightforward UDRP complaint but you always have to remember the three golden rules. In this proceeding, reported by the World Intellectual Property Organization (WIPO), all of the data seemed to favor the crypto exchange giant Binance, but they still lost the case. Continue reading to find out where Binance went wrong.
The Complainant, Binance Holdings Limited, submitted a complaint to WIPO Arbitration and Mediation Center that the disputed domain name binance.com.au be transferred to them. The domain name in question infringes on the crypto exchange giant’s Australian Registered Trade Mark No. 1970019, BINANCE, in respect of: computer software, business management, and financial services. This trade mark has been registered in Australia since November 21, 2018.
The Respondent registered binance.com.au on October 27, 2019. The Respondent also operates a digital marketing business from the website tellmedia.com.au. In addition, the Respondent’s director, Mr. Nawodycz, holds an appointment at an organisation called “World Bookings” as a blockchain exchange researcher/decentralized exchange researcher where he has been involved in creating projects in “the blockchain and crypto space”.
The Facts of the UDRP Case
- On February 10, 2020, a representative of the Complainant approached Mr. Nawodycz with an offer to buy the disputed domain name for USD 2,000.
- On March 9, 2020, the Complainant’s representative made a final offer of AUD 8,000 indicating this was its final offer before proceedings to recover the disputed domain name were commenced.
- Up to this point, the disputed domain name had resolved to a website which was simply a parking page provided by the Registrar.
- On March 12, 2020, the Respondent filed an application to register an Australian trade mark for the word “binance” in International Class 39 for “flower delivery”. This application is held jointly with World Bookings pte ltd Singapore. Mr. Nawodycz is listed as a director and the only shareholder of this company. The services World Bookings provides are management consultancy and investment holding.
- At some point between March 13 and March 17, 2020, the disputed domain name resolved to a webpage which featured an image of a flower and stated “Binance Flowers to Your Door. Under construction.” The website operates as a florist, offering flowers for sale and delivery.
- The representation of “Binancé” with the accented “é” was introduced only after April 21, 2020.
- On April 21, 2020, the Complainant commenced proceedings in the Australian Trade Mark Office seeking to have the Respondent’s accepted trade mark application cancelled on the grounds that it was filed without an intention in good faith to use it as a trade mark.
- On April 26, 2020, the Respondent registered the business name “binance flowers”.
For a successful UDRP proceeding, the Complainant has to prove three items:
Complainant must prove the domain name is identical or confusingly similar to a trademark or service mark in which the Complainant has rights.
The Complainant has proven that it owns the registered trade mark for BINANCE. The Panel finds that the disputed domain name, binance.com.au, is identical to the Complainant’s Trade Mark.
Complainant must prove the Respondent has no rights or legitimate interest in respect of the domain name.
Given the difference between the trademarks, a flower delivery service and the services provided by the Complainant, the Panel finds that the Complainant has not provided a convincing case of demonstrating the Respondent does not have rights or a legitimate interest in the disputed domain name.
Complainant must prove the domain name was registered and is being used in bad faith.
The Panel reached a conclusion that the Complainant did not satisfy the second element and therefore no good purpose would be served by addressing this third requirement at this stage.
Complainant VS. Panel
It seemed as though the crypto exchange giant, Binance, had everything they needed to win this case. When we closely examine the points in the case they reference it turns out they were not able to establish a strong enough case for the domain name being registered in bad faith. This is a critical reminder of how essential it is to work with an experienced team, well versed in domain dispute proceedings.
The Complainant points out the Respondent’s business found at tellmedia.com.au and the expertise of Mr. Nawodycz lie in the field of digital marketing, quite remote from the business of a florist.
In addition, the Respondent only filed its trade mark application and put up a web page for a florist business “under construction” more than four months after Mr. Nawodycz registered the disputed domain name and only after the Complainant threatened to bring proceedings to recover the disputed domain name.
The Complainant contends that the Respondent is not genuinely operating as a florist.
One might question why a digital marketing business might wish to diversify into a flower delivery business. The possibility cannot be simply dismissed. Moreover, the Respondent appears to be operating a business from the website to which the disputed domain name resolves. There is no evidence before the Panel that the Respondent’s website is not operational.
Mr. Nawodycz says he conducted a trade mark search which identified the Complainant’s Trade Mark before securing the disputed domain name, but the Respondent considered there was no overlap between flowers and the goods and services covered by the Complainant’s registered trade mark.
The Respondent has admitted knowledge of the Complainant’s Trade Mark as a result of trade mark searches Mr. Nawodycz undertook before registering the disputed domain name. His claim that he did not think the intended use for a flower delivery service would not overlap with the Complainant’s rights is not, on its face, implausible or untenable.
The Respondent, says he selected the disputed domain name because the word “binancé” in French means “balanced” and “binancé flowers” in French translates as “paired flowers”.
The Complainant refutes the significance or importance of the accented “é”. The Respondent’s trade mark application, nor its website represented “binance” in that way until the Complainant lodged its non-use application on April 21, 2020. It was only after that date that the Respondent’s website represented the term with the accented “é”.
The Panel notes that the expression “binancé flowers”, which the Respondent says translates into English as “paired flowers”, is not actually a French expression. Google Translate does, however, offer that translation as a translation from French to English.
In its Response, the Respondent claims it initiated a business plan “in mid-2019” for an online offering providing flower arrangements and delivery of flowers.
The Complainant challenges this explanation, pointing out that the business plan submitted by the Respondent and its list of expenditure incurred in relation to the website are both undated and could have been prepared at any time.
Mr. Nawodycz’s assertion that the business plan and “expenditures on average” documents submitted were dated in October 2019 is not necessarily conclusive. In this proceeding there is no cross-examination or discovery of the Complainant, so it must be given weight and cannot be simply dismissed.
The Respondent says he set up website hosting on January 3, 2020, but the website development did not commence until mid-March. They developed a mock up for the proposed website and some Facebook advertisements and created a Facebook Advertising account in February – March 2020, but did not start advertising because of low activity during the COVID-19 lockdown.
The Complainant points out that the pandemic was unknown and did not exist in Australia in October 2019.
Noting that there was no (known) pandemic in October 2019, the Panel does not consider that a period of some five to six months for a website for a new business to be up and running is unreasonable or indicative of lack of good faith in itself.
The Complainant points out that some of the images of products apparently offered for sale on the Respondent’s website appear to have been copied from unrelated websites. For example, the Respondent’s website offers the “Ostrich Feather Bouquet”, while the same product (using the same image) was offered for sale on eBay. Similarly, the “Pink Pampas” bouquet apparently offered for sale on the Respondent’s website is being advertised for sale on Etsy by “COCOMUMUflowers” using the same image.
The Complainant contends that the Respondent is not operating a genuine flower delivery business. Aside from copying images from other sites, the Complainant contends the Respondent appears to be offering products for sale at a price aimed to ensure it does not receive any genuine orders.
The panel finds that the Respondent’s website has not been shown to be a mere pretext or a sham or non-operational.
Although the Respondent is not necessarily consistent or convincing. Nonetheless, the Complainant must establish a case and evidence to prove that the Respondent is not offering goods or services in good faith.
The Finding: Complaint Denied
The panelists with considerable hesitation decided that the Complaint is denied. The Panel accepts that the matters raised by the Complainant at the least raise suspicions about the Respondent’s intentions.
In these circumstances, it would be best for the crypto exchange giant, Binance, to find resolution in court proceedings. The auDRP offers limited proceeding with no discovery nor cross-examination. Therefore, the panel could not form a conclusion about the Respondent’s real motives.
All three elements required under UDRP were not met. Because of this the Panel concluded that the domain name remains in control of the Respondent.