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Construing “Primarily for the Purpose” in Paragraph 4(b)(i) of the Policy

Yesterday’ Note on precedent in deciding UDRP cases touched on dictionary words and descriptive terms. Theories of bad faith under subdivisions of paragraph 4(b) of the Policy have similarly been construed. Thus, the respondent violates paragraph 4(b)(i) if it is found to have registered or acquired the domain name “primarily for the purpose” of holding it for ransom. The paragraph prohibits “selling, renting, or otherwise transferring the domain name registration to the Complainant who is the owner of the trademark or service mark or to a competitor of that Complainant, for valuable consideration in excess of your documented out-of-pocket costs directly related to the domain name.” Registration or acquisition of a domain name for some purpose other than selling, renting etc. may be actionable under a different theory, but commerce in domain names is not prohibited as a matter of law. “[I]f the drafters … had intended to broadly cover offers to any and all potential purchasers as evidence of bad faith, it would have been a simple matter to refer to all offers to sell the domain name, and not offers to specific parties or classes of parties,” Educational Testing Service v. TOEFL, D2000-0044 (WIPO March 16, 2000).

Offering to sell the domain name to “the owner of a trademark or service mark trademark or service mark or to a competitor of that Complainant” is not as limited as it may appear from the literal reading of the phrase. It includes “general offers to sell the domain name, even if no certain price is demanded,” Am. Anti-Vivisection Soc’y v. “Infa dot Net” Web Serv., FA 95685 (Nat. Arb. Forum November 6, 2000); offers to sell the domain name to the complainant’s licensee, Mattel, Inc. v. Unknown c/o Dora Marks, FA0506000490083 (Nat. Arb. Forum July 11, 2005) (Respondent alleged that it purchased the domain name as an “investment”); offers to sell to the general public, Systea GmbH v. Marketpoints.com New Media Branding Services/DNS Administrator, D2006-0324 (WIPO May 13, 2006) (Domain name “offered for sale on a publicly accessible website”); Parfums Christian Dior S.A. v. QTR Corp. D2000-0023 (WIPO March 9, 2000) (holding bad faith where WHOIS information included the phrase “this domain name is for sale”); offers to the “Internet universe,” Cargill, Incorporated v. RN WebReg c/o Rare Names, Inc., FA0904001260307 (Nat. Arb. Forum June 12, 2009), “which necessarily includes both Complainant and its competitors.” Demand for business concessions to relinquish the domain name also falls within the prohibition as do threats to sell to other trademark holders of the mark, Cello Holding, LLC v. Lawrence A. Storey, d.b.a. Lawrence – Dahl Co., AF-506 (eResolution December 21, 2000).

“Primarily for the purpose” also includes extortion for business concessions, Takaso Rubber Products Sdn Bhd v. Selim Tasci and Tasci Dis Tic. Ltd. STI, D2006-1263 (WIPO December 16, 2006). The demand by Respondent for such a business concession in exchange for transfer of the disputed domain name constitutes an offer to transfer the disputed domain name for valuable consideration in excess of its documented out-of-pocket costs directly related to the domain name. Moreover, the “consideration demanded in exchange for a domain name registration does not have to be monetary in nature to run afoul of UDRP paragraph 4(b)(i), but can be anything of value that exceeds the amount spent in registering and maintaining the domain name,” Gutterbolt, Inc. v. NYI Bldg. Prods. Inc., FA 96076 (Nat. Arb. Forum Dec. 29, 2000). Demands for concessions in pre-arbitration communications veiled as opportunities fall within the proscription. “[I]t is very often an opening gambit in an exercise of inducing the trademark owner to offer to buy the domain name without providing direct evidence to support a complaint under the Policy,” Google Inc. v. Jeltes Consulting/N. Tea Pty Ltd, D2008-0994 (WIPO August 20, 2008).

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