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Legitimately Offering a Domain Name for Sale by a Transferee from a Related Transferor

A respondent is ordinarily responsible for its behavior immediately upon registration and chargeable for its use of the domain name thereafter. I previously noted October 25 that transferee respondents from related parties are treated differently from respondents acquiring their domain names upon non-renewal from prior holders. La Société des Bains de Mer et du Cercle des Etrangers à Monaco v. Easthaven Ltd., D2010-1167 (WIPO October 22, 2010) is an example of the former class; A. D. Banker & Company v. Domain Invest, D2010-1044 (WIPO September 30, 2010) of the latter.

The Respondent in La Société first alleged that it “registered the disputed domain name … more than 12 years ago to potentially use an additional site for its online gaming business at “www.casinoland.com” [but that i]n 2000, [it] was forced to close “www.casinoland.com” as a result of computer software difficulties. [As a result t]he Respondent never utilized the disputed domain name as a website and has not used it for any other purpose to date.” The Respondent later supplemented its submission by admitting that the domain name was originally registered by “a related entity to the Respondent … [who] transferred [the domain name] to the Respondent in January 2010.” It argued that since both entities were beneficially controlled by the same people it was entitled to the benefit of its transferor’s good faith registration, a view that the Panel majority rejected.

The record appears to include evidence that the Respondent “clearly offered” the domain name for sale “for a price of EUR 1 million, which is far in excess of any out-of-pocket expenses that may have been directly related to the disputed domain name.” This should by itself be conclusive of abusive registration unless the domain name was truly an asset that could legitimately be sold on the open market including the Complainant. The dissent focused on a different aspect of the evidence, that it was proper to look into the motivation of the related party, and in doing so he found that the domain name was plausibly registered in good faith. How a domain name comes into a respondent’s possession is a key fact. The dissent notes about the majority that it

maintains … that the intention of Atlantis Gaming Inc. must be disregarded because a transfer of registration is to be regarded as a new registration and that it is the legitimate interest of the current domain name owner that must be looked at, rather than that of a prior owner.

His response points out the differences in treatment between the two kinds of respondents. It would (he states) “probably be so [that is, the transfer of registration is to be regarded as a new registration] if the transfer is a sale to an unrelated party, as it would seem strange that a registrant could avoid liability for a plainly illegitimate acquisition by relying on the legitimate registration of an entirely unrelated registrant in entirely different circumstances and possible many years before.” The “more difficult question,” however, “is whether such a rule should apply when the two parties are in common ownership.”

Transferees are not protected from their transferors’ bad faith and it is proper to examine their motivations in registering the domain names. If that were the sole issue, the dissent would be correct, that the record supports the Respondent in La Société both as to registration and use. But, the record contains evidence that having acquired the domain name from its related transferor the Respondent then offered the domain name for sale to the Complainant, which under ordinary circumstances would contravene paragraph 4(b)(i) of the Policy. However, if the transferor’s acquisition of the domain name was in good faith (as it appears) the domain name would then have been a legitimate asset for it as well as its related transferee. The dissent is correct about the 12 year wait because it allows an inference that the Complainant never believed the domain name infringed its trademark and pounced only when it learned that the domain name had been transferred.

Mr. Levine is the author of a treatise on trademarks, domain names, and cybersquatting, Domain Name Arbitration, A Practical Guide to Asserting and Defending Claims of Cybersquatting under the Uniform Domain Name Dispute Resolution Policy. (Legal Corner Press, 2015). Learn more about the book at Legal Corner Press. Available from Amazon and Barnes & Noble. Supplement and Update through August 2016 published January 2017. A Second Edition of the treatise is scheduled for publication August/September 2018. If you purchased the First Edition, you can buy the Second Edition 50% off list price by contacting inquiries@legalcornerpress.com or gmlevine@researchtheworld.com.

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