Frank Schilling Loses UDRP

In one of the most ridiculous UDRP decisions that I have ever seen, Frank Schilling (owner of Name Administration) lost the domain ChilliBeans.com.

The case was brought by a company in Uruguay, which owns a trademark for “CHILLI BEANS” for eyewear and watches.

The panel found that the domain ChilliBeans.com was identical or confusingly similar to the trademark CHILLI BEANS and that the design elements of the trademark didn’t matter.  No big surprise here.

In the second stage of the UDRP analysis, the panel looks at the parties’ rights and legitimate interests in the domain.  The panel found that the Complainant had such rights and interests. Schilling argued that he was using the domain in a legitimate way – to display ads linking to goods and services relating to food and beverages, which is consistent with the meaning of “Chilli Beans.”  However, the panel found that there was no evidence that Schilling explored the possibility of third-party trademarks before registering the disputed domain name.  The panel further found that there was evidence of (a very small amount of) pay-per-click advertising links on the ChilliBeans.com, related to the trademark.

The Panel decided to make up its own law and stated:

Moreover, this Panel cannot ignore the implications of publicly available traffic rankings generated by Alexa – and unchallenged by the Respondent – reflecting that in August 2008 some seventy-five percent (75%) of the traffic to the Respondent’s website originated in Brazil. This is significant given that the CHILLI BEANS mark has been used in Brazil since as early as 2000 and is more widely known there than in other areas of the world. While the Panel has no effective means of discovering traffic data at earlier dates, this certainly cautions against the Panel blindly accepting the Respondent’s contention that the sheer numerical preponderance of links keyed to the generic or descriptive meaning of the domain name renders the presence of paid advertisements related to a trademark insignificant or inconsequential, at least insofar as it concerns the pay-per-click revenue generated as a result of these links.

What??  The panel is looking at Alexa data and domain owners are expected to do so too??  And Alexa can’t be easily gamed?

The ultimate issue in these sorts of cases is whether the domain owner registered the domain in bad faith.  Apparently, not knowing about a trademark, plus intending to use a domain only for its generic use, and targeting ads for the generic meaning are not sufficient.  The panel concludes that Schilling registered and used the domain in bad faith, as he failed to explore the possibility of third-party rights and his parking software was incapable of distinguishing between dictionary meaning and trademark meaning of a term.

The panel completely ignored the fact that Schilling went out of the way to target food products in his ads.

The panel ordered Schilling to transfer the domain.

My guess is that Frank will be taking this to court soon.  If something as generic as ChilliBeans.com is in danger of an UDRP loss, almost every domain is too.

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