Aku.com Domain Dispute: Shoe Retailer Wins, but Was Justice Served?

How famous does a three-letter trademark need to be to warrant the transfer of a valuable .com domain? A recent decision suggests the bar might be lower than you think.

In a ruling that raises serious questions, a panelist at the World Intellectual Property Organization (WIPO) has ordered the transfer of the domain name aku.com to Aku Italia S.R.L., a company specializing in hiking and outdoor sporting footwear. While Aku Italia may be a reputable brand in its niche, the decision to award them the generic, highly valuable aku.com domain is debatable.

The dispute was filed against an individual in China. Critically, the domain owner did not respond to the complaint, a significant factor working against them. It is possible language barriers contributed to the lack of response. However, the panelist had a duty to consider all facts objectively, regardless of the respondent’s silence.

To succeed in a UDRP (Uniform Domain Name Dispute Resolution Policy) case for a valuable three-letter .com domain, the complainant typically needs to demonstrate either widespread fame of the associated initialism (think IBM, CNN) or clear evidence that the domain was registered with the specific intent to target the trademark holder, often through a parked page displaying ads related to the complainant’s business.

In the aku.com case, neither of these conditions appear to be convincingly met.

Aku Italia is not a household name. While they may have a loyal following among outdoor enthusiasts, they are not a global giant in the shoe industry. Reports indicate that Aku produced approximately 280,000 pairs of shoes in 2021, generating a revenue of €23 million. This is a respectable figure, but it hardly qualifies them as a universally recognized brand.

Furthermore, the company’s presence in China, where the domain owner resides, appears limited. Evidence presented regarding their sales in China was notably dated, showing a turnover of €330,000 in 2015 and €134,000 in 2016. This significant decline raises questions about their current market penetration in China.

The WIPO panelist, Nick Gardner, considered the fame of the AKU trademark and, in the absence of a response from the domain owner, seemingly gave the benefit of the doubt to Aku Italia. However, a closer examination of the panelist’s reasoning reveals potential weaknesses.

The panelist stated: “In the present case, the Panel considers that the Complainant has established it has a significant reputation in the AKU trademark in relation to outdoor footwear and that reputation subsists internationally…”

While AKU may indeed possess a reputation within the specific context of outdoor footwear, this is a limited and specialized market. This localized recognition doesn’t necessarily translate to the widespread fame required to justify the transfer of a generic three-letter domain.

The panelist further argued: “…It has also filed evidence which establishes that it had a significant reputation in China prior to the date the Disputed Domain Name was acquired by the Respondent. In those circumstances the Panel considers that an inference can be drawn that the Respondent’s registration of the Disputed Domain Name was made with knowledge of the Complainant’s reputation and with intent to take advantage of that reputation….”

The assertion that six-figure sales figures in China constitute a “significant reputation” is questionable. A substantial reputation implies broader brand awareness and market dominance, which seems unlikely based on the provided data. It’s important to remember the context of China’s vast market size; these sales figures may represent a relatively small market share.

The panelist also suggested: “…The Panel thinks it likely, as the Complainant says, that had the Respondent carried out a simple Google search when it acquired the Disputed Domain Name it would have identified the Complainant and its AKU trademark….”

This reasoning is problematic. While a Google search might reveal Aku Italia, it’s crucial to consider the respondent’s location. A search engine more popular in China, such as Baidu, might yield different results. Furthermore, assuming a domain investor in China would primarily use Google is a significant assumption.

A simple Google search for “AKU” in the US reveals a diverse range of results. The first result is for the Samurai Jack Wiki, followed by Aku Italia. However, subsequent results include Aga Khan University, a Wikipedia page for a type of tuna (also called Aku), a fictional character named Aku, and other potential uses for the acronym. The shoe company is not the dominant result, highlighting the ambiguity of the term.

The panelist acknowledged this ambiguity, stating: “…It might also however conceivably have identified that there were other organizations which used the acronym “aku” . There is however no evidence to suggest that any other such organization had any reputation in China, unlike the Complainant….”

However, the issue extends beyond organizations using the acronym. “Aku” is a word with various meanings, including the Hawaiian name for tuna and the name of a fictional character. Again, the claim that the shoe company has a strong, recognizable “reputation” in China is dubious, especially when considering the other meanings and uses of the term “aku.”

The panelist correctly pointed out: “…Conceivably this inference could, with appropriate evidence, be rebutted – but as WIPO Overview 3.0 notes at 2.10.2: “For a respondent to have rights or legitimate interests in a domain name comprising an acronym, the respondent’s evidence supporting its explanation for its registration (and any use) of the domain name should indicate a credible and legitimate intent which does not capitalize on the reputation and goodwill inherent in the complainant’s mark”. In the present case, given the lack of any Response or any communication at all from the Respondent the inference has not been rebutted…”

The domain owner’s failure to respond undoubtedly weakened their position. However, with a trademark that isn’t universally famous and questionable evidence of a strong reputation in China, a more compelling case for targeting would be expected. For instance, the presence of a parked page displaying advertisements related to shoes or outdoor gear would have significantly strengthened the argument for bad faith.

Currently, the domain aku.com points to GoDaddy’s DomainControl nameservers and does not resolve to a website. This lack of active use further diminishes the likelihood of targeted cybersquatting.

The most plausible explanation for the domain registrant’s acquisition of aku.com is its brevity. Three-letter domains are highly sought after by domain investors, particularly in China, due to their scarcity and potential value.

In conclusion, this decision sets a potentially concerning precedent. Transferring a valuable, generic three-letter domain based on a niche brand’s somewhat limited international recognition, especially in the absence of compelling evidence of targeted cybersquatting, raises serious questions about the threshold for UDRP success. This case highlights the importance of robustly defending domain names, even seemingly weak cases, and the potential for subjectivity in UDRP panel decisions. For domain investors, this outcome serves as a cautionary tale about the inherent risks associated with holding generic domain names, even those seemingly unrelated to established trademarks.