Are Pay Per Click Sites Legitimate?

Pay per click sites are legitimate under WIPO’s Overview 3.0.

However, at least two ADR Forum decisions disagree and say that “Use of a domain name to redirect Internet users to a site featuring unrelated pay-per-click hyperlinks may not be considered a bona fide offering of goods or services or legitimate noncommercial or fair use.”

WIPO and ADR Forum are two among many UDRP dispute resolution providers who decide the outcome of UDRP complaints. The author is unaware as to whether any US Federal District Court has ruled on the issue of pay per click sites.

Pay per click “PPC” is a legitimate form of website advertising. Most popular websites exist solely with PPC advertising. From Facebook and Google to news magazine websites, Quora.com, and even Walmart.com all feature PPC ads. So Pay Per Click Sites are definitely legitimate.

There are several PPC publisher ad networks. Facebook and Google each run their own PPC ad networks.

Google’s whole business model relies on PPC advertising. PPC ads appear in Google searches and on web pages hosting using Google AdSense Code.

That said, pay per click sites subject to UDRP complaints typically look like they are multi-colored spam websites with Pay Per Click ads that don’t add any value to visitors. And so they were easy pickings for trademark lawyers to go after.

WIPO UDRP Overview 3.0

2.9 Do “parked” pages comprising pay-per-click links support respondent rights or legitimate interests?

Applying UDRP paragraph 4(c), panels have found that the use of a domain name to host a parked page comprising PPC links does not represent a bona fide offering where such links compete with or capitalize on the reputation and goodwill of the complainant’s mark or otherwise mislead Internet users.

Panels have additionally noted that respondent efforts to suppress PPC advertising related to the complainant’s trademark (e.g., through so-called “negative keywords”) can mitigate against an inference of targeting the complainant.

Panels have recognized that the use of a domain name to host a page comprising PPC links would be permissible – and therefore consistent with respondent rights or legitimate interests under the UDRP – where the domain name consists of an actual dictionary word(s) or phrase and is used to host PPC links genuinely related to the dictionary meaning of the word(s) or phrase comprising the domain name, and not to trade off the complainant’s (or its competitor’s) trademark.

In cases involving a website that is not predominantly a “typical” parked or PPC site (e.g., a blog, forum, or other informational page), where other clear, non-pretextual indicia of respondent rights or legitimate interests are present, some panels have been prepared to accept the incidental limited presence of PPC links as not inconsistent with respondent rights or legitimate interests.

3.5 Can third-party generated material “automatically” appearing on the website associated with a domain name form a basis for finding bad faith?

Particularly with respect to “automatically” generated pay-per-click links, panels have held that a respondent cannot disclaim responsibility for content appearing on the website associated with its domain name (nor would such links ipso facto vest the respondent with rights or legitimate interests).

Neither the fact that such links are generated by a third party such as a registrar or auction platform (or their affiliate), nor the fact that the respondent itself may not have directly profited, would by itself prevent a finding of bad faith.

While a respondent cannot disclaim responsibility for links appearing on the website associated with its domain name, panels have found positive efforts by the respondent to avoid links which target the complainant’s mark (e.g., through “negative keywords”) to be a mitigating factor in assessing bad faith.

Now, this statement in the ADR Forum decision completely contradicts the WIPO UDRP Overview 3.0. And ADR Forum’s Materia, Inc. v. Michele Dinoia decision is subject to a Federal District Court proceeding in Colorado, so it shouldn’t have been cited.

To add context to the quote, it is from the discussion on Rights or Legitimate Interests. Here is the context of the quote from the decision:

Rights or Legitimate Interests

….

Complainant also alleges Respondent lacks rights and legitimate interests in the domain name because Respondent publicly listed the domain name for sale. General attempts to sell a disputed domain name are evidence that a respondent lacks rights and legitimate interests in a domain name. See AOL Inc. v. YourJungle Privacy Protection Service aka Whois Agent, FA1312001533324 (Forum Jan. 17, 2014) (“Respondent has offered the <aoljobsweek.com> domain name for sale to the general public, which demonstrates that Respondent lacks rights or legitimate interests in the disputed domain name under Policy ¶ 4(a)(ii).”). Complainant evidences that the website resolving from the <coolfit.com> domain name features a message that reads, “Click here to buy CoolFit.com for your website name!” See Compl. Annex 2. Complainant contends Respondent’s inclusion of this message amounts to a use indicative of its lack of rights and legitimate interests in the domain name. The Panel agrees with this contention that Respondent lacks rights and legitimate interests in the domain name under Policy ¶4(a)(ii).

-9-

As Complainant has made its prima facie case that Respondent lacks rights and legitimate interests in the domain name per Policy ¶ 4(c)(ii), the burden is shifted to Respondent to prove that it does have rights and legitimate interests in the domain name.

Respondent contends that “cool” and “fit” are two generic terms which the Respondent and the public are free to use in their generic sense. However, this Panel finds that the terms “cool” “fit” when used together, or in succession, are not generic. This is also the basis of the registration granted to Complainant when issued its US trademark registration on the principal register. Rather, when “cool” and “fit” are used together, they form a “suggestive” term, connoting apparel that is stylish and fits, or that keeps the wearer cool while worn. Panel also does not agree with Respondent’s contention that “coolfit” connotes the same commercial impression as “cool fitness.”

Respondent alleges that it is using the <coolfit.com> domain name in connection with a bona fide offering of goods or services or legitimate noncommercial or fair use, namely to advertise subjects and topics related to exercise programs, diet, fitness machines and products, etc.

Respondent maintains that its monetization of the domain name by providing links to goods and services related to the terms in the domain name is a legitimate use.

-10-

Complainant argues that screenshots of the website resolving from the <coolfit.com> domain name indicate the site features hyperlinks for “Body Building,” “Exercise Machine,” and “Diet Fitness.” See Compl. Annex 4. However, Panel is persuaded by Complainant’s Annex 4, that Respondent uses the domain name to divert Internet users to a parked webpage that features pay-per-click hyperlinks.

Use of a domain name to redirect Internet users to a site featuring unrelated pay-per-click hyperlinks may not be considered a bona fide offering of goods or services or legitimate noncommercial or fair use. See Materia, Inc. v. Michele Dinoia, FA1507001627209 (Forum Aug. 20, 2015) (“The Panel finds that Respondent is using a confusingly similar domain name to redirect users to a webpage with unrelated hyperlinks, that Respondent has no other rights to the domain name, and finds that Respondent is not making a bona fide offering or a legitimate noncommercial or fair use.”).

The Panel concludes that Respondent failed to use the domain name in connection with any bona fide offering of goods or services or legitimate noncommercial or fair use per Policy ¶¶ 4(c)(i) or (iii).

The Panel’s decision was:

Having established all three elements required under the ICANN Policy, the Panel concludes that relief shall be GRANTED.

Accordingly, it is Ordered that the <coolfit.com> domain name be TRANSFERRED from Respondent to Complainant.

Honorable Nelson A. Diaz, Chair,
Carol Stoner, Esq, Dennis A. Foster, Esq. Panelists

Dated:  March 26, 2018

What makes this ADR Forum decision more shocking is that the complainant hasn’t used its mark in years and its mark is a stylized registration of the telescopic word COOLFIT, as opposed to a wordmark with a standard character claim.

USPTO REGISTRATION NUMBER: 3313021
REGISTRATION DATE: 10/16/2007

MARK: (Stylized and/or with Design, COOLFIT (see, mark))

The owner, SAMUEL J MCROBERTS, a citizen of United States, having an address of
504 OVERLOOK DRIVE
NORTH PALM BEACH, Florida 33408
United States
is filing a Combined Declaration of Use and/or Excusable Nonuse/Application for Renewal of Registration of a Mark under Sections 8 & 9.

For International Class 025, this filing does NOT cover the following goods or services for this specific class listed in the registration, and these goods or services are to be permanently deleted from the registration:  shorts, gym shorts, bermuda shorts, bathing suits, boxer shorts, underwear, shirts, sport shirts, jerseys, pants,

The mark is in use in commerce on or in connection with the following goods or services listed in the existing registration for this specific class; or, the owner is making the listed excusable nonuse claim: Clothing, namely, hats

As of the writing of this article, on April 29, 2018, the coolfit.com domain continues to forward to one of Uniregistry’s pay per click sites. I suspect that a proceeding may have been filed in a court to adjudicate the matter further.

The materia.com domain name owner filed a complaint in a federal district court and it seems to still be pending, showing only 1 docket entry, according to Lex Machina:

Docket Entry #1 2015-09-09 D.Colo. 1:15-cv-01958

Pleading Complaint

COMPLAINT against All Defendants (Filing fee $ 400, Receipt Number 1082-4592847)Attorney Michael P. Eddy added to party Michele Dinoia(pty:pla), filed by Michele Dinoia. (Attachments: # 1 Civil Cover Sheet, # 2 Summons, # 3 Exhibit, # 4 Exhibit, # 5 Exhibit, # 6 Exhibit, # 7 Exhibit, # 8 Exhibit, # 9 …

From document:

Action No. MICHELE DINOIA, an individual, Plaintiff, v. MATERIA, INC., a Delaware corporation, Defendant. COMPLAINT AND JURY DEMAND Plaintiff Michele Dinoa

Complaint against Defendant Materia, Inc., a Delaware Corporation (“Materia”) alleges as follows:

I. INTRODUCTION 1. Dinoia brings this action to stay the

transfer of the domain name to Defendant Materia, to recover damages against Materia for reverse domain name hijacking, and to obtain a declaration

It looks like Materia didn’t care to litigate the matter. It’s a mystery as to why Michele Dinoia hasn’t brought a motion for default judgment yet.