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Essay on Laches Defense by The Hon Neil Brown QC

This essay was supplied to me by the author, and is published by his permission.

The Hon Neil Brown QC argues that it is time to examine allowing a laches defence, among others, in the UDRP to make sure the result is always just.

It is frequently said that laches is not a defence to complaints brought under the Uniform Domain-Name Dispute Resolution Policy (UDRP). Accordingly, a trade mark owner, seeking to wrest the ownership of a domain name from a party who has registered it, will not lose the case simply because it delayed bringing the claim, even for a long period of time.

Indeed, even those who seek to mount part of their defence against the trade mark owner’s case on the ground that the delay has caused them prejudice, will usually concede that laches itself is not a defence.

The preponderance of opinion in the text books and in decided cases has also been that laches is not a defence; just as other equitable defences like forfeiture, waiver or unjust enrichment are not defences.

Indeed, this point of view has been expressed regularly since the inception of the UDRP, in cases like Edmunds.com, Inc v. Ult Search Inc, (“...there is no room for general equitable doctrines under the Policy ...”) and has generally been followed through by panellists, as in Avaya Inc v Holdcom, that “[c]ontinuous use adverse to the interest of Complainant is not a basis from which Respondent can acquire rights in the domain name”, “unless it can bring itself within ¶4(c)(i) of the Policy...” (also read this ). These views have come to be the prevailing view of UDRP panellists, even going to the extent, it is said, that as there are no precedents in support of laches as a defence, it is not a defence: Tom Cruise v. Network Operations Center.

As a panellist, I have expressed similar views. But I must confess that it has been with some – and increasing – hesitation that I have done so. Recently, it has seemed to me, without pre-judging anything, that delays of up to 14 years between the registration of the domain name and the time when the trade mark owner makes its claim, call for some sort of explanation.

That has led me to the view that all associated with the domain name system should pay more regard to delays that have occurred in instituting proceedings and take them into account in making their decisions.

I thought, therefore, that it would be useful to look at the reasons that have been used for rejecting laches or delay and see if they stand up to examination.

The first reason, as expressed in cases like Tropicana Products, Inc v Dunne, is that

"[e]quitable defenses such as laches or limitations do not feature in the Policy", the argument being that if a defence does not “feature” in the Policy, it is not available. The same argument was used in The Hebrew University of Jerusalem v. Alberta Hot Rods ; Ashley Judd v. Alberta Hot Rods, Jeff Burger ; Deutsche Telekom AG v. Oded Zucker and many other cases.

However, Rule 15(a) of the UDRP Rules provides that, “a panel shall decide a complaint on the basis of the statements and documents submitted and in accordance with the Policy, these Rules and any rules and principles of law that it deems applicable ” (emphasis added).

This means that a panel may decide for itself what principles are applicable and what are not, provided that its decision is made reasonably and on relevant criteria.

Accordingly, there is a respectable argument under the plain meaning of the Rules for taking into account laches or any other principle of law if, on the facts of the case, it is applicable.

It will be said in reply to this argument that laches is not a “principle of law”, but a principle of equity and that laches is therefore not allowed under the rules. But that cannot be.

Law and equity have been amalgamated for many years – in England since 1875, the United States since 1937 and in other common law countries. To all intents and purposes, they are one and the same – and they should be, unless we want to live in the past.

It is therefore completely unreal to think that, when those who drafted the UDRP Rules said that a panel should consider “ principles of law that it deems applicable”, they really meant “principles of law but not of equity”.

It is true that the argument is still put, particularly in cases in the United States, that laches and other equitable defences are not part of the applicable law when an injunction is being sought in trade mark cases and that these cases are akin to domain name cases: Jay Leno v Guadalupe Zambrano.

However, the US commentator David Johnson, has written in reply that this view is “... simply wrong on U.S. trademark law...(and that there are)... dozens of cases in which injunctions were denied based on the laches defense...” Recent US cases seem to support Johnson’s view: Ormsby v Barrett , 2008 U.S. Dist. LEXIS 20 , which “teaches that a failure to assert trademark infringement claims in the face of know(n) trademark infringement can result in a loss of trademark rights under the doctrine of laches” and Southern Grouts & Mortars, Inc. v 3M Company .

Finally, there is the argument in Tropicana Products, Inc v Chris Dunne and E W Scripps Company v. Sinologic Industries, ( supra) that, as it was put in the latter case, “If a Respondent considers that the bringing of the complaint was inequitable because of delay, it can submit the matter to a court of competent jurisdiction”. But this seems an unnecessary and expensive burden to put on parties, to require them to go to a court, when the UDRP was designed to avoid that complexity.

There are, however, welcome signs that UDRP panellists are starting to take delay into account. Although panellists have generally not yet been willing to adopt laches as a defence by name, they do consider if delay by the trade mark owner has enabled the registrant of the domain name to establish a right or legitimate interest in the domain name. Inaction has also been used as a basis for finding that the registrant has not acted in bad faith in the way it has used the domain name.

Thus, in Anna Nicole Smith v DNS Research, it was held that the registrant of a domain name had acquired a right or legitimate interest in the domain name as it had been used for a fan site without objection from the trade mark owner for two years.

In Square Peg Interactive Inc v Naim Interactive Inc the panel held that delay was very relevant, for during the time delay, the respondent had built up a business using the disputed domain name. Again in Mattel, Inc v Easttwind Groups, Ltd the lapsed time was taken into account, requiring the panel “to consider very carefully whether Complainant has discharged its burden of proving” that the Respondent had acted in bad faith.

Delay has also been acknowledged as evidence showing that the complainant did not believe the domain name had been registered and used in bad faith and thus assisting the panel to reach that conclusion. Delay was used to that effect in Shoe Land Group LLC v Development, Services c/o Telepathy, Inc and Everglades Direct, Inc. v. HR Direct LLC and as evidence that the complainant did not truly believe that the domain name was registered in bad faith. Such a use of delay has been described by one commentator as being “in effect” the recognition of laches in UDRP proceedings. National Football League v Bachand, even came close to recognising laches as a defence: “...the doctrine of laches may be recognized in proceedings under the Policy in appropriate limited circumstances.”

Then Board of Trustees of the University of Arkansas v FanMail.com, LLC, the subject of at least one commentary enabled two panellists (one of them was the present writer) to look again at the embargo on the use of laches and at how far and in what form delay may be taken into account. A majority of the Panel was prepared to acknowledge the applicability of laches in appropriate and limited circumstances. The writer also had the opportunity to develop these thoughts further in Charter Communications, Inc v CK Ventures Inc/ Charterbusiness.com .

It is therefore submitted that panels should at least take delay into account and reserve discretion to reject a claim in appropriate cases where there has been inordinate delay, especially delay that has not been adequately explained by the complainant.

The UDRP is under pressure. But it is a good system and should be preserved. The best way we can do that is to ensure that all available principles – including laches – are applied in cases to bring about a just result.

The Hon Neil Brown QC is an Australian arbitrator and mediator and member of domain name arbitration panels at WIPO and in Europe, the USA, Asia, Australia and Canada.

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