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The “Primary Purpose” Rule in Construing Offer to Sell Domain Name

Bad faith under paragraph 4(b)(i) of the Policy requires proof that the respondent’s registration of the disputed domain name was for the “primary purpose” of selling it to the complainant. By definition a trademark not in existence at the time of the registration or a trademark in existence but unknown to the respondent could not yield a conclusion of bad faith. A corollary would be a situation in which in response to a complainant’s request to purchase the domain name the respondent demands more than the complainant is willing to pay. At the request of the complainant a respondent who has a superior right to the domain name can sell or hold at its option. Willingness to discuss selling a disputed domain name that is an alienable asset is not an indicia of bad faith. Skyhook Wireless Inc. v. John L Productions, Johnny Williams, D2010-0359 (WIPO April 23, 2010). It is

undisputed that the parties have communicated about the Complainant’s proposed purchase of the disputed Domain Name on several occasions. One of the Complainant’s principals, identifying the Complainant as “a startup company called Skyhook Wireless”, first expressed interest in purchasing or leasing the disputed Domain Name in 2007. In a January 2010 email attached to the Complaint, the Respondent offered to sell the disputed Domain Name to the Complainant for USD $100,000. The communications in the record do not refer to trademark rights or the Policy until March 2010, shortly before the Complaint was filed.

A respondent cannot, of course, create a legitimate interest by merely registering a domain name or by estoppel. But, if it acquires a “right” in a domain name by being the first to register without knowledge of another’s trademark it has an alienable asset. In Skyhook Wireless “the Respondent did not approach the Complainant to sell the disputed Domain Name, and the fact that the Respondent later considered the Complainant’s request to purchase the disputed Domain Name does not establish that this was the Respondent’s motivation for acquiring the disputed Domain Name in 2006.”

Skyhook may have had a presence in the marketplace prior to 2006, but “[i]t is likely, as the Respondent asserts, that [it] did not reach the attention of the Respondent in Alabama, operating a business in the field of election campaign services.” Moreover, “these circumstances undercut the Complainant’s inference that the Respondent registered the disputed Domain Name primarily to sell it to the Complainant.” The Respondent acquired the domain name for a purpose having nothing to do with the Complainant.

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. (2015, 558 pages). Learn more about the book at Legal Corner Press. Available from Amazon and Barnes & Noble. Ongoing Supplement here.

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