Trademark Registration Insufficient to Overcome Good Faith and Limited Geographic Use in UDRP Action

A recent UDRP decision demonstrates that a variety of factors can make success uncertain where a brand owner’s asserted mark has arguably descriptive or generic meanings, where the junior user showed a good faith basis for use of the mark, and where the brand owner’s services are geographically limited.

Complainant Yonder, Inc. (“Yonder NC”) provides vacation home rental services in two areas of North Carolina under the registered mark YONDER. It conducted its business through the <yondernc.com> website. Respondent Yonder Global, Inc. (“Yonder Global”) provides online bookings for temporary lodgings and agricultural tourism. Yonder Global acquired the <yonder.com> domain name on April 16, 2019, from which date it had continuously advertised its services. Yonder NC filed a UDRP complaint, alleging Yonder Global’s bad faith was shown by the fact it used the domain for services that directly competed with Yonder NC’s.

To prevail in a UDRP proceeding, a complainant must establish the following three elements: (1) the disputed domain is identical or confusingly similar to the complainant’s trademark or service mark; (2) the domain name registrant has no rights or legitimate interests in the domain; and (3) the domain was registered and is being used in bad faith.

Here, the UDRP panel had no difficulty finding Yonder Global’s domain name was identical to Yonder NC’s registered YONDER mark.  Nonetheless, the panel identified several bases for Yonder Global’s argument that it had a legitimate interest in the domain name. Specifically, Yonder Global established that before it had any notice of the domain dispute, it had made demonstrable preparations to use the domain name in connection with a bona fide offering of goods or services. The panel emphasized that any respondent seeking to avail itself of this defense must provide evidence supporting that assertion. Here, Yonder Global was notified of the dispute on November 25, 2019, and established:

1. It filed three trademark applications with the USPTO for the YONDER mark on October 11, 2018, covering activities such as a website for “eco-lodging”;
   
   
2. It was incorporated on September 21, 2018 and changed its name to Yonder Global, Inc. on April 3, 2019;
   
   
3. It had operated its website since at least July 9, 2019. Respondent’s assertion was supported by a historical screenshot from the Internet Archive, dated October 25, 2019, that showed a webpage substantially the same as Respondent’s current website;
   
   
4. It paid $253,000.00 for the domain name. According to the panel, this high price, combined with the fact that Complainant’s business was small, made it reasonable to assume Respondent registered the domain not to target Complainant, but as part of a genuine plan to start an online booking service.

The panel further found Yonder Global had a legitimate interest in the domain name because “yonder” is a common dictionary word, highly suggestive of the services Yonder Global provided. Based on the foregoing evidence, the panel concluded: “Respondent adopted the word ‘yonder’ for its domain name as the word evoked the notion of travel from one place to another, the same notion the Respondent associated with its business.”

The evidence also supported the panel’s conclusion that the domain had not been registered or used in bad faith. Additionally, according to the panel, the parties’ respective business models were different enough to make confusion unlikely. Notably, the panel observed: “[B]y including the letters ‘nc’ in the domain name and by continuing to use that domain to run its business, Yonder NC virtually asserted that the business was limited to being a North Carolina business.” Further, Yonder NC’s website made specific reference to the fact that it was a North Carolina business and, in response to the UDRP complaint, Yonder Global agreed not to do business in that state.

While the respondent prevailed in this case due to its extensive evidence, the panel could have decided the other way. Many UDRP decisions hold that using another’s trademark for a competing business cannot be a legitimate interest. And, although the panel emphasized Yonder NC’s ’s geographically limited services, a registered trademark is statutorily entitled to a legal presumption of nationwide protection. Here, however, the panel implicitly found Young NC’s mark to be commercially weak and therefore not entitled to the robust protection a more distinctive and famous mark might receive. Similarly, the panel’s conclusion that the parties’ business models were different was also likely connected to the narrowly prescribed rights the panel felt Young NC could assert.

The case is Yonder Inc. v. Yonder Global, Inc. / Freyr Thor, Case No. FA1911001871167 NAF (Jan. 9, 2020).