Offer to Purchase vs. Counter Offer

It makes a difference which party initiates a negotiation to sell or purchase a disputed domain name. In SIX Group AG v. Xedoc Holding SA, D2012-1548 (WIPO October 11, 2012) the Complainant’s cause for complaint concerned Respondent’s redirected use of as a pornographic website . But, “six” is a weak mark: “there is extensive third party use of the term ‘six’, both as trade marks and as domain names, and that it cannot by any stretch of the imagination be considered famous or exclusively associated with the Complainant.” The question of “rights or legitimate interests” in a domain name identical or confusingly similar to a trademark (however weak it may be) depends on use only if there is evidence of targeting. Pornography is not a violation per se.

The likelihood that a respondent had the complainant’s trademark in the cross-hairs increases significantly as the trademark rises on the classification scale; and drops as it descends. For example, “Dior” (a famous mark) attracts attention; “Anna” by itself does not; but combining the two words into <annadior.com> increases the likelihood that respondent is using the famous mark as a magnet to attract Internet traffic. CHRISTIAN DIOR COUTURE v. Paul Farley, D2008-0008 (WIPO February 2, 2008) (the “anna” of “offers bondage, discipline and sado-masochism services … to customers in the San Francisco Bay and Washington D.C. areas of the United States.”). The intent to profit from (or be indifferent to) the reputation of the trademark is manifest in the respondent’s choice.

Intent to target is not manifest in SIX Group. Complainant’s lament that Respondent was offering to sell the domain name for “excessive value” has no meaning because valuation depends on each party’s circumstances. Respondent’s counter offer reflected the valuation of the domain name. It use of the domain name was not made (as the Complainant asserted) “primarily for the purpose of disrupting its business,” but for its economic yield. A website can be both “exploitative” and legitimate. Respondent explained that

its current use of the Disputed Domain Name in connection with adult content is legitimate. [It] provided evidence to show that “six” is a common search term for the word “sex” and that statistical results that it obtained prior to changing its website use to adult content, showed that traffic to the Disputed Domain Name has a significant portion of people searching for sex. The Respondent’s evidence shows that revenues prior to the change of use of the Disputed Domain Name were low and the bounce rate high. This led the Respondent to believe that it would receive increased traffic if the website was redirected to “www.sexvideos.com” and the statistics that the Respondent provided after the change shows that it was correct.

Moreover, after the change of use “[t]he traffic continued to grow and the bounce rate had fallen, meaning that users visiting the site are staying longer and viewing more content.” The question is whether directing Internet viewers to a pornographic website violates the Policy. Complainant argues that it does; Respondent, that it does not. The answer lies in Respondent’s motive for choosing the domain name. Respondent demanded $2 Million Dollars for the domain name and defended itself against a charge of bad faith under paragraph 4(b)(i) of the Policy by explaining that it was responding to Complainant “anonymous and unsolicited” offer to purchase the domain name. Further: “The Respondent advises that it did not know that the offer originated from the Complainant and that its counter offer of USD 2 million was consistent with third-party valuations of the Disputed Domain Name.” It “submitted evidence of a valuation of the Disputed Domain Name at USD 1.180 million.” It would appear that short dictionary words have value out of proportion to their size.

In the absence of evidence demonstrating respondent’s intent to take advantage of complainant’s trademark, domain name law supports a respondent’s legitimacy in using its property as it will. The 3-Member Panel held

In this UDRP proceeding, there is no evidence that the amount that the Respondent sought as a consequence of the offer made by the Complainant to purchase the Disputed Domain Name involved taking advantage of whatever goodwill attached to the Complainant’s mark. The Panel accepts that the Disputed Domain Name, which is a .com domain name and consists of a generic three-letter word, may hold considerable inherent value as, in fact, shown by the Respondent in a valuation that it had conducted.

Had Respondent contacted Complainant or had it redirected the website to pornography to induce Complainant to purchase the domain name (proof of extortion) there would have been bad faith use, although in the case of Six Group it would have fallen short of bad faith registration. In Six Group, however: “After all, the Complainant’s offer was unsolicited and anonymous and made no reference to any trade mark rights.”

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  1. Dallas - November 22, 2012

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