A recent UDRP decision concerning the domain name hyperscience.com underscores a practical but often overlooked boundary of the UDRP process: it is not designed to resolve business or contractual disputes, even where domain names are central to the disagreement. Instead, it targets a much narrower issue - cases of cybersquatting. Where the core issue in dispute is who, under a contract or corporate arrangement, ought to own or control a domain name, the dispute may be better suited to a forum which can deal with issues of contractual interpretation, aided by the tools of disclosure and witness evidence.
In the present case, the complainant, Hyper Labs, sought transfer of a domain registered and held by its former founder and president. The company relied heavily on a Founder’s Agreement to argue that the domain should have been held on its behalf and transferred upon request. The Panel declined to order a transfer, finding that while the complainant established trade mark rights and a lack of respondent’s legitimate interest, it failed to establish bad faith registration and use - the third, indispensable UDRP element. Crucially, the Panel viewed the dispute as entangled with questions of intent among the founders, the timing and purpose of the domain’s acquisition, and the scope of an IP assignment that did not expressly cover domain names. Those are matters of contractual construction that lie beyond the scope of the UDRP.
Bad faith must be proved
UDRP panels require evidence of bad faith both at registration and in use. Here, the domain appeared to have been acquired around the time the company was formed, before the complainant had established registered rights and amid uncertain evidence of common law rights. The Panel noted that absent clear proof that the respondent acted as agent for the company, or that he registered the domain to exploit the company’s mark, bad faith at the time of registration could not be established. The complainant’s argument that refusal to transfer now proves bad faith at the time of registration was rejected. A later dispute between the parties does not retroactively establish bad faith registration.
Contractual interpretation belongs in court, not in a UDRP complaint
The complainant sought to rely on the Founder’s Agreement asserting that the respondent was violating such agreement by retaining the disputed domain name. However, the Founder’s Agreement did not expressly mention domain names. While it contained reference to the ownership of IP, IP was not defined to include domain names and the Panel concluded that this omission should be construed against the complainant. Thereafter, any arguments on whether the parties intended domain names to be captured; whether the registrant acquired the name on personal account or as agent; and whether the agreement’s definitions could or should be read to include domain names were inherently contractual interpretation questions which “lie beyond the scope of the UDRP”.
Domain names are not automatically IP
The decision highlights a potential risk when contracting with founders, directors or employees regarding the ownership of IP. It is not uncommon for such agreements to focus on things like inventions, software, and copyrights but to omit express reference to domain names. Domain names are quasi‑property rights governed by registration contracts and therefore may not automatically be swept into an “intellectual property rights” definition. In particular, if an agreement does not unambiguously vest ownership of a domain name in the company, the business may later face a difficulty that the UDRP cannot not fix.
In summary, the hyperscience.com decision is a reminder that the UDRP is not a back‑door mechanism for resolving ownership questions arising from ambiguous or incomplete contracts. Companies should ensure that any agreements with founders, directors or employees are explicitly drafted to make clear that any such person registering a domain name is doing it as agent for the company and to include an express obligation to transfer any such domain name to the company (either immediately, on request or on cessation of any role with the company).
