By Steve Levy
Does bad faith under the UDRP requires a Respondent to specifically target the Complainant’s trademark, or can a more generalized targeting of multiple companies using the same mark suffice to prove bad faith? This issue has long been debated. A recent decision involving the domain name temco.com provides a useful example of how the specific facts of a given case can sway a panel to one side or the other of this issue.
The UDRP provides examples of bad faith registration and use of a domain name in paragraph 4(b) one of which is where a domain name is registered primarily for the purpose of selling it to the trademark owner or one of its competitors. If a registrant acquires a domain name simply because it is a common term or acronym, or it’s a “brandable” word without focusing on any particular trademark holder, the case for bad faith becomes less clear.
In the Temco case, the Respondent purchased the domain name temco.com at auction and parked it at a site which offered it for sale to the general public. The Complainant claimed bad faith cybersquatting that targets it company brand but the Respondent argued that “Temco” is a widely used term, pointing to numerous other trademark registrations and businesses worldwide that share the name. It claimed that it was not specifically targeting the Complainant and that the acquisition was part of its overall strategy of investing in generic or brandable domain names rather than an attempt to exploit a single trademark owner.
However, the Complainant presented evidence that shifted the analysis. Communications from the Respondent’s broker revealed that the domain was actively marketed to the Comlainant, Temco Industrial, and other companies that use the Temco name, with asking prices reaching as high as $150,000. More importantly, when the Respondent’s broker approached the Complainant, part of its sales pitch was to convey that the seller [Respondent] said they are willing to wait for the right end user to purchase this name with a stronger offer and it provided a list of three Temco-named companies, including the Complainant. The panel found that, while the Respondent is entitled to invest in generic domain names and even in brandable names that are not directed at any existing companies, the fact that the broker mentioned the Complainant in its sales pitch demonstrated that the Respondent’s primary intent was to sell the domain to specific trademark owners, including the Complainant. The panel concluded that this conduct satisfied the bad-faith criteria under paragraph 4(b)(i) of the UDRP.
The decision underscores an important principle: generalized targeting alone—such as acquiring a domain name because it is a common term—does not automatically amount to bad faith. What matters is whether a Respondent’s actions show a deliberate effort to profit from a particular trademark owner or its competitors. In the Temco case, the evidence of targeted marketing tipped the scales in favor of ordering the domain name to be transferred.
For domain investors, the case serves as a cautionary tale. While investing in common terms is permissible, actively soliciting sales to trademark owners can, in some circumstances, transform a neutral investment into a bad-faith registration. Panels will look beyond the generic nature of a term and focus on the Registrant’s intent and conduct. Ultimately, the Temco decision reaffirms that bad faith under the UDRP is not always about the word itself, but is often about the purpose behind the seller’s acquisition and use of the domain name.