How UDRP Panels and Federal Courts Decide Bad Faith Registration and Use

By Hank FasthoffJuly 4, 2026

Bad faith is the element that determines most domain name disputes. Confusing similarity between the domain name and the trademark is usually easy to establish. Rights or legitimate interests can often be addressed through burden-shifting. But bad faith requires proof of the registrant's state of mind, intent, and conduct, and it is where complainants with strong marks lose cases they expected to win and where respondents with weak positions prevail because the complainant's evidence fell short.

Under both the UDRP and the ACPA, bad faith is assessed through multi-factor tests that give panels and courts substantial discretion. Understanding what those factors are, how they interact, and how panels and courts have applied them across thousands of cases is essential to building a complaint that succeeds or a defense that holds.

The UDRP Requires Both Bad Faith Registration and Bad Faith Use

Under UDRP paragraph 4(a)(iii), the complainant must prove that the domain name "has been registered and is being used in bad faith." Registration in bad faith and use in bad faith are separate requirements, and both must be satisfied. A domain name registered in good faith that is later used in bad faith may not support a finding under the UDRP, because the registration itself was not made with bad faith intent. Similarly, a domain name registered in bad faith but never used leaves the complainant with a problem, because the policy as written requires bad faith "use," not merely bad faith registration.

ICANN's drafting history confirms this interpretation. In World Wrestling Federation Entertainment, Inc. v. Michael Bosman (WIPO Case No. D99-0001), one of the earliest UDRP decisions, the panel noted that the policy's legislative history indicates that ICANN intended the complainant to establish both bad faith registration and bad faith use.

Under the ACPA, the formulation differs. Under 15 U.S.C. § 1125(d)(1)(A), the defendant must have a "bad faith intent to profit" from the mark and must "register, traffic in, or use" the domain name. Registration, trafficking, and use are alternatives, not cumulative requirements. A registrant who registers a domain name with bad faith intent to profit can be liable under the ACPA without ever using it.

This structural difference means that some cases that fail under the UDRP may succeed under the ACPA, particularly when the registrant acquired the domain name in bad faith but has not put it to active use and the circumstances do not support the passive holding doctrine.

The UDRP's Non-Exclusive Bad Faith Factors

UDRP paragraph 4(b) identifies four circumstances that, if found by the panel, constitute evidence of both registration and use in bad faith. These are illustrative, not exhaustive. Panels may find bad faith based on other circumstances not listed in paragraph 4(b).

Paragraph 4(b)(i) covers registration primarily for the purpose of selling, renting, or otherwise transferring the domain name to the trademark owner or a competitor for valuable consideration in excess of documented out-of-pocket costs directly related to the domain name. An offer to sell the domain name to the trademark owner at a price exceeding registration costs is the most common and most direct indicator of bad faith. But the absence of a sale offer does not preclude a finding of bad faith under other factors.

Paragraph 4(b)(ii) covers registration for the purpose of preventing the trademark owner from reflecting its mark in a corresponding domain name, provided the registrant has engaged in a pattern of such conduct. Pattern is a required element under this factor. A single registration, standing alone, does not satisfy paragraph 4(b)(ii) unless the complainant can show that the registrant has registered other domain names that incorporate the marks of other trademark owners.

Paragraph 4(b)(iii) covers registration primarily for the purpose of disrupting the business of a competitor. This factor requires a competitive relationship between the complainant and respondent, though panels have interpreted "competitor" broadly to include anyone who competes for Internet traffic or commercial attention in the same space.

Paragraph 4(b)(iv) covers using the domain name to intentionally attract Internet users for commercial gain by creating a likelihood of confusion with the complainant's mark as to the source, sponsorship, affiliation, or endorsement of the respondent's website or of a product or service on the website. Pay-per-click advertising on a parked page featuring links related to the complainant's trademark is the most common application of this factor.

The Passive Holding Doctrine

When a respondent registers a domain name and does nothing with it, no website, no email, no advertising, the complainant faces a problem in the UDRP's language. Paragraph 4(a)(iii) requires bad faith "use," and non-use is not, on its face, use.

In Telstra Corporation Limited v. Nuclear Marshmallows (WIPO Case No. D2000-0003), decided in February 2000, the panel addressed this problem directly. Telstra, Australia's largest telecommunications provider, challenged the registration of telstra.org. The respondent built no website, sent no email from the domain, and took no active steps with it. The panel held that the concept of bad faith use under the UDRP is not limited to positive action, and that passive holding can amount to bad faith use when the circumstances, taken together, support that conclusion.

In reaching its conclusion, the panel identified several factors relevant to the passive holding analysis. The complainant's mark was widely known. Its opponent provided no evidence of any actual or contemplated good faith use, and took active steps to conceal its identity. And it was not possible to conceive of any plausible actual or contemplated active use of the domain name by the respondent that would not be illegitimate, such as by being a passing off, an infringement of consumer protection legislation, or a form of unfair competition.

Panels have applied the passive holding doctrine in thousands of cases since Telstra, and the WIPO Overview of WIPO Panel Views on Selected UDRP Questions, Third Edition (WIPO Overview 3.0), Section 3.3, recognizes it as established UDRP jurisprudence. Panels typically consider the degree of distinctiveness or reputation of the complainant's mark, the failure of the respondent to submit a response or provide evidence of good faith use, whether the respondent has concealed its identity or provided false registration data, and the implausibility of any good faith use of the domain name.

Knowledge of the Complainant's Mark

Bad faith registration under the UDRP requires that the respondent knew of the complainant's mark at the time of registration. Panels have consistently held that constructive knowledge, the legal fiction that a party is deemed to know of a trademark because it is registered in a trademark office, is not sufficient under the UDRP. In The Way International Inc. v. Diamond Peters (WIPO Case No. D2003-0264), the panel stated that there is no place for constructive knowledge under the Policy, and that bad faith requires actual knowledge of the complainant and its trademark.

Actual knowledge can be inferred from circumstantial evidence. If the complainant's mark is famous or widely known in the respondent's geographic area or industry, panels are more likely to infer that the respondent was aware of it. If the respondent registered a domain name that incorporates a coined or fanciful trademark with no dictionary meaning, the inference of knowledge is strong, because there is no reason to select that term unless the registrant knew of the mark. If the respondent operates in the same industry as the complainant or has prior dealings with the complainant, knowledge can be established through those connections.

Under the ACPA, federal courts are not limited to actual knowledge. Because U.S. trademark law provides constructive notice through federal registration, 15 U.S.C. § 1072, a federally registered trademark is entitled to a presumption of nationwide notice, and a cybersquatter cannot claim ignorance of a registered mark. This is one of the significant procedural advantages of bringing an ACPA action in federal court rather than filing a UDRP complaint.

Pay-Per-Click Advertising and Domain Monetization

Registering a domain name that incorporates another party's trademark and monetizing it through pay-per-click advertising is the single most common bad faith scenario in UDRP proceedings. When a user types the domain name into a browser and reaches a parked page displaying sponsored links related to the complainant's products or services, the registrant earns click-through revenue generated by the confusion between the domain name and the complainant's mark. This conduct falls squarely within paragraph 4(b)(iv) of the UDRP.

Panels have held that a respondent is responsible for the content of pay-per-click pages even when the links are generated automatically by a parking service rather than selected by the respondent. Registering a trademark-incorporating domain name and directing it to a pay-per-click service demonstrates knowledge of the mark's commercial value and an intent to profit from the resulting confusion.

Pattern of Registration

Evidence that a respondent has registered multiple domain names incorporating the trademarks of different companies supports bad faith under both the UDRP (paragraph 4(b)(ii)) and the ACPA (15 U.S.C. § 1125(d)(1)(B)(i)(VIII)). A registrant who holds 50 domain names that correspond to 50 different trademarks, none of which the registrant has rights in, is engaged in a pattern of cybersquatting that strongly supports bad faith intent.

Complainants should investigate the respondent's domain portfolio before filing. WHOIS and reverse WHOIS searches can identify other domain names registered to the same person or entity. If those domain names incorporate the trademarks of other companies, that evidence of pattern strengthens the bad faith case for every domain name in the portfolio.

Common Indicators of Bad Faith

Beyond the statutory and policy factors, panels and courts have identified a set of recurring circumstances that support bad faith findings.

False or incomplete WHOIS data. A registrant who provides a false name, address, or email to the registrar is concealing its identity, and panels consistently treat concealment as supporting bad faith.

Failure to respond. While failure to respond to a UDRP complaint does not by itself prove bad faith, panels are permitted to draw reasonable inferences from the respondent's failure to present evidence of good faith registration or use.

Offers to sell. An unsolicited offer to sell the domain name to the trademark owner, particularly at a price far exceeding registration costs, is among the strongest evidence of bad faith.

Redirection to a competitor's site. Directing a domain name to a competitor of the trademark owner, or to a site offering competing products, supports an inference that the registrant intended to disrupt the trademark owner's business.

Registration shortly after trademark issuance or product launch. A domain name registered within days of a new product announcement or trademark filing supports an inference that the registrant monitored the trademark owner's activity for the purpose of cybersquatting.

Practical Guidance

For complainants, the strength of the bad faith case depends on the quality and specificity of the evidence. Attach screenshots of the respondent's website (including pay-per-click advertising), copies of correspondence in which the respondent offered to sell the domain, WHOIS records showing false contact information, evidence of the respondent's other domain name registrations incorporating third-party trademarks, and evidence of the mark's fame and recognition. A complaint that alleges bad faith in conclusory terms without supporting evidence will not persuade a panel.

For respondents, the defense centers on demonstrating a legitimate reason for the registration that is independent of the complainant's mark. Evidence of bona fide use or demonstrable preparations to use the domain name in connection with goods or services before any notice of the dispute, evidence that the respondent is commonly known by the domain name, and evidence of noncommercial fair use all weigh against bad faith. A respondent who can show that the domain name consists of a generic or descriptive term and that the respondent selected it for its dictionary meaning, rather than to target the complainant's mark, may overcome even a strong complainant's case.