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Offering to Sell a Domain Name Not Bad Faith Unless Registered with that Specific Intent

It is not selling domain names that is unlawful under the UDRP but registering them “primarily” with that purpose in mind to the trademark holder or competitor. The Complainant in X6D Limited v. Telepathy, Inc.,D2010-1519 (WIPO November 16, 2010) contends that the disputed domain name, <xpand.com> has been used in bad faith because the Respondent indicates on its website that it “is likely to ignore offers below USD 40,000 for a domain name.” The Complainant in Bible Study Fellowship v. BSF.ORG / Vertical Axis Inc., D2010-1338 (WIPO November 29, 2010) points out that Respondent is offering <bsf.org> for sale through the web site “www.domainbrokers.com” for the minimum price of USD 10,000 and contends that the amount requested by Respondent is in gross excess of Respondent’s direct out-of-pocket costs for the Domain Name, which of course it most likely is.

Complainants’ underlying assumption in these cases is that they have a superior right to the domain names because (arguably at least) they correspond with their trademarks regardless of when the respondents acquired the domain names or the circumstances of their acquisition. But, common words and phrases that holders have turned into trademarks are not by virtue of their registrations withdrawn as coin in the virtual marketplace. “Due to the commercial value of descriptive or generic domain names it has become a business model to register and sell such domain names to the highest potential bidder,” X6D. Domain names acquired without knowledge of another’s trademark rights or prior to any trademark rights coming into existence do not support an inference of bad faith. “Making an offer to sell a domain name at a market-valuation price, even if it could have been above the out-of-pocket costs directly related to the domain name, when solicited by Complainant ten years after the registration, is no evidence of knowledge of Complainant at the time of registration,” Bible Study Fellowship.

Earlier registered domain names regardless of their website content can never have been registered in bad faith, although they may have become infringing in use. The question in both X6D and Bible Study Fellowship is whether the Complainants abused the Policy by commencing the proceedings. In X6D, “the Complainant did not provide any explanation as to how the Respondent could possibly have been aware of the Complainant and the Complainant’s mark when registering the disputed domain name, which occurred more than three years before the Complainant started using its XpanD Mark. … The Complainant knew or should have known at the time it filed the Complaint that it could not prove that the domain name was registered in bad faith.”

Bible Study Fellowship got away with a rebuke but not reverse domain name hijacking because although the “Complainant’s allegations have not been substantiated by relevant evidence … the lack of explanation on the generation of the web page displaying Bible links is not suggestive of a good faith behavior of Respondent.” This emphasizes the evidentiary requirement for the respondent to prove bad faith on complainant’s and good faith on its part to be entitled to a RDNH finding.

Gerald M. Levine <researchtheworld.com>

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