"This is the first I have heard about this 3 year test. Is there much substance to it?"
No. There is no "three year test". In fact, there are few "yes" or "no" questions. While it may drive people up the wall that lawyers answer every question with "it depends", there is a lot that comes after those two words.
The way these things develop is a little different from case law where there is an appellate system to resolve differences among individual panelists and how they approach UDRP cases. For example, in case A, the panelist said there was no legitimate interest because the domain name was not being used. Then, in case B, a panelist distinguished case A because the domain name had only been registered a couple of weeks before the dispute, saying, "In case A, the domain had been unused for X years".
Given the distinction that was made between case A and case B, there are panelists who have a predilection for trying to develop black & white rules, and who have referred back to that distinction. There are other panelists who don't even bother to look at how long the domain name was registered.
The main thing is that there are a LOT of default decisions where the panelist feels compelled to transfer the name, but also feels compelled to put forth some reasons for transferring the reasons. Some of this reasoning in default cases gets recycled, and some panelists simply cut & paste from previous defaults, giving the impression that some important "rule" has been developed.
Then, along comes a case like milesandmore.com, where the domain name was not used since registration back in 1995 or 6. But the Respondent bothered to answer the complaint and explain that the same reason why he registered the name - out of an interest in hiking and outdoor activities - was the very same reason why he had contracted Lyme disease and hadn't done much of anything, much less develop a website, for quite some time.
But trying to boil down all of the potential relevant facts and circumstances as to why a domain name may or may not be used, and come up with a "3 year rule" is a pointless exercise.
And, please, if I do not respond to something in this forum, do not take it as agreement or disagreement with any particular proposition. There are only so many hours in a day, and most of the answers are not as simple as some of the questions.
While it's on my screen, let's take up that "someone" who should have sued NAF for making supplemental rules which go beyond the UDRP rules. I completely agree that the NAF should not have the ability to effectively derail the intended rules which were for a complaint and a response. But I have yet to meet these mythical folks who want to put food on my table while I spend months pursuing a lawsuit in which the only relief sought is equitable, rather than monetary. There are also some significant hurdles that "someone" would have to overcome, such as the indemnification and "hold harmless" clause in the domain name registration contract.
Then again, when the ICANN UDRP Review Task Force published a questionnaire seeking input on areas for reforming the UDRP and the UDRP rules, and when I looked at the survey responses, I had to scratch my head and wonder where all of those "someone"s manage to run off and hide when presented with a free opportunity to provide some input.
Try this exercise. Go the WIPO or NAF site and take a range of UDRP cases. From that sample, pick out the "dictionary word" cases. Of the "dictionary word" cases, pick out the ones where the Respondent bothered to file a response (and if you pick tonsil.com, throw that one out, because that respondent might have been better off not responding, than by acting like a weirdo). Also, throw out the ones which has false contact data. Let me know what kind of win rate you find at the end of this exercise.
Heck, even among ALL disputes, where the respondent bothers to file a response, and where they elect a three member panel, domain name registrants win the MAJORITY of UDRP cases (see Mueller, _Rough Justice_). The .biz STOP cases have been a hands-down rout for Respondents (more at WIPO than at NAF, though), especially in the "dictionary word" cases.
But, do I have any sympathy for people who register typo's of "yahoo.com" and then go crying about how the system is unfair. No. It is people like that which make it hard for honest folks.