Domain names: the Milan Chamber of Arbitration rules on so-called “passive holding”

On 18 October 2017, the Milan Chamber of Arbitration decided on a domain names reassignment procedure concerning two ccTLD .it domains, based on the complaint filed by a Belgian company operating in the pharmaceutical e-commerce market. The respondent had registered the two domain names in 2000, but had never used them actively. The complainant, who owned two allegedly similar trademarks and had recently acquired a company whose name was identical to one of the two domain names, claimed that they had been registered in bad faith and should be assigned to the complainant itself.

The complainant’s bad faith case hinged on the concept of “passive holding”. In the complainant’s view, the fact that there was no apparent connection between the registrant’s activity and the concept that the two domain names evoked and the fact that they had never been actively used, proved that the respondent’s aim in registering them was to make them unavailable to legitimate players of the pharma sector, with a view to ultimately profit from their sale. The complainant also argued that the respondent’s renewal of the domain names registration, since it occurred after the former had expressed an interest in their purchase, was another indication of bad faith.

The respondent observed that both domain names had been registered well before the company bought by the complainant had been incorporated or the trademarks cited had been registered. He claimed he had no interest in the sale of domain names and had been approached by the complainant, not the other way around. He finally remarked that the renewal of the domain names was an automated procedure.

The Milan Chamber of Arbitration denied the complaint. Citing the Central Media WIPO’s decision, the panel noted that passive holding, while not as such preventing a finding of bad faith, is not in itself sufficient to establish it, and in the case at hand, the fact that the domain names’ registration pre-dated any proven use of the signs invoked by the complainant ruled out bad faith. The panel also remarked that the mere renewal of a domain name is not comparable to the registration and is, again, insufficient to support a finding of bad faith.