After Passing on $35k Offer, Panet.com is Lost in UDRP

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According to NameBio, Panet.com was acquired for $5,752 via auction at DropCatch.com in September of 2020. A company that operates on a Panet ccTLD filed a UDRP against the domain name at the World Intellectual Property Organization (WIPO) and the single member panel ruled in favor of the complainant. You should have a look at the published decision in its entirety to understand the facts of the case.

Notably, it appears the domain registrant could have sold the domain name to the complainant for $35,000. Here’s an excerpt about that from the decision:

“The Respondent has repeatedly offered to end the dispute for a fee of USD 110,000, which the Complainant has declined, offering USD 35,000 instead.”

If this offer was made, I think it shows that the complainant may not have felt its chances at prevailing in a UDRP were very good. If the domain registrant doesn’t file a lawsuit to retain the domain name, it will be a swing of more than $40,000 considering the cost of the domain name and the offer that was reportedly made.

The domain registrant, who was self-represented in this UDRP filing, argued that this is more of a business dispute than a legal dispute:

“The Complainant approached the previous owner over several years to buy the disputed domain name but its offers had been rejected. The Complainant also admits that it approached the Respondent to purchase the disputed domain name yet calls for the proposal it received to be considered an extortion attempt because it feels that the price was not appropriate. The dispute is a matter of business considerations and has no legal basis. It violates the principle of freedom of business competition and the unrestricted right to register domain names.”

My reading of the decision is that the panelist did not believe the domain registrant when he said he acquired the domain name “to build an international social networking website.” In fact, the panelist cited the domain registrant’s outbound email to the complainant shortly after buying the domain name:

“Accordingly, it may be seen that less than ten days after winning an auction for the disputed domain name, the Respondent approached the Complainant stating that the disputed domain name was for sale. This does not appear to be consistent with the behavior of a new registrant of a domain name with plans to develop it into its own commercial website, as the Respondent asserts. Based upon the Panel’s chronology, after the initial approach by the Respondent there followed an alleged auction for the disputed domain name, which was ultimately discontinued by the Respondent. Finally, on October 18, 2020, the chronology shows the Respondent stating that the auction is over and that it is processing a deal with the winner. No evidence of this deal has been produced. In any event, the disputed domain name did not change hands following this process.”

The Panel concludes from the circumstances on the record that the Respondent most probably did not acquire the disputed domain name for any purpose other than to sell it to the Complainant for an amount in excess of its out-of-pocket costs. The proximity between the Respondent’s acquisition date and the date of its first approach to the Complainant is significant. This suggests to the Panel in the absence of evidence to the contrary, that the intention to sell to the Complainant was the Respondent’s primary purpose and that the Respondent has effectively violated paragraph 4(b)(i) of the Policy.

In addition to this, the panelist called out the domain registrant for telling the complainant that it had received a much higher offer than the $35,000 offer that had been made:

“The Complainant offered USD 35,000 for the disputed domain name. The Respondent rejected such offer, stating that multiple sources offered to pay double, and requested that the Complainant pay an undefined minimum amount. The Complainant contacted the Respondent again on October 6, 2020 at which point the Respondent asserted that the latest bid for the disputed domain name was USD 259,500. This does not reflect the true offer received by the Respondent and is not close to a fair value of the disputed domain name. The Respondent provided no evidence supporting such offer other than a list of different names and prices allegedly offered.”

This dispute may not be fully resolved. The domain registrant and indicated that he may take this case to court:

“The Complainant must solve the problem at a business, rather than a legal level. It is a matter of price for the Complainant and not legal rights. If the dispute develops, the Respondent is ready to defend itself with United States counsel.”

One thing domain investors should note is that if they do outbound marketing on a domain name shortly after acquiring it, a UDRP panel might find it difficult to believe the domain name was acquired with development in mind rather than a quick flip. Another thing domain investors should know is that any communications with a prospective buyer will likely become public if a UDRP is filed. If any “salesmanship” was used to try and induce a better offer, that might end up backfiring in a dispute.

About The Author: Elliot Silver is an Internet entrepreneur and publisher of DomainInvesting.com. Elliot is also the founder and President of Top Notch Domains, LLC, a company that has sold seven figures worth of domain names in the last five years. Please read the DomainInvesting.com Terms of Use page for additional information about the publisher, website comment policy, disclosures, and conflicts of interest. Reach out to Elliot: Twitter | Facebook | LinkedIn | Email

7 COMMENTS

  1. I support domain name owners. However I understand the decision. I was upset at first like anyone would at the decision but after reading everything, I had a change of mind. For one I think we can register a domain name without intention to build a company. But in this case the registrant lied about original plans to build a global social platform, and immediately instead tried to sell the name. Not just sell it, but sell it to the company with that exact name. Which appears to be an intentional purchase to resell to that specific company. And then the owner rejected every offer and really tried to get a price based on the size of the company. None of that is wrong in general. But in this case the purchase was intentional and only to snatch a pre-existing companies name. I’ll be honest, I have had moments where I purchase a name just because I see a company built on a similar or lesser name and my only intention was to sell to them. But I have stopped that and just buy names based on my own creative mind and trends etc. I try to stay away form legal issues. And damn, if her $35,000 for a name you take it and run.

  2. Outbound solicitation to TM holder was the death knell, as it is in so many of these UDRP decisions.

    However, the Panelist stating that the 295K asking price is not close to a fair value of the disputed domain name is preposterous. .

    How are panelists able to continue making the ‘fair value’ claim at this late date; knowing the seller has the right to sell at any price? Why do panelists believe they can determine fair value of a URL, when URLs sell for millions everyday?

  3. Would you invest in an ACPA action in Arizona,

    if Ahmad Mahameed can’t afford the legal fees?

    Approximately 20,843 people bear this surname: Panet

    MOST PREVALENT IN: Puerto Rico

    • Would that include the downside risk of a $100k ACPA counterclaim? Although the complainant does not have a registered mark in the US, they have their app available in the US on both the Google and Apple platforms, and would plausibly be able to show common law rights in the US on the basis of US web traffic and app installations by US users. If the Google Play Store page is to be believed, the app has over 1M installs. Surely a portion of those are in the US.

      Do any of those 20k people so-named want to buy the domain name for what it would cost to litigate?

      Another outcome is that the complainant doesn’t show up, and/or essentially takes a position of “fine, keep the name” as in MailPlanet.com, Inc. v. Lo Monaco Hogar, S.L., 291 F. App’x 229 (11th Cir. 2008). What then?

      In view of the risk of a counterclaim, or the complainant simply not engaging or continuing to want the name (for more than $35,000), then what is the anticipated return on investment?

  4. ROI?

    Of course, it’s not worthwhile for a single investor to fund this case.

    But crowdfunding to litigate many ACPA cases with a strong likelihood of success would increase the value of most domain name portfolios.

    Establishing an ACPA litigation fund would serve as a deterrent against filing close UDRP complaints and ACPA cases and help ensure that the law remains favorable for domain owners in various jurisdictions. Most people who own domains with winnable ACPA claims are not wealthy enough to pay an attorney to litigate their claims. And pro se litigants typically mess up their cases and fail to win.

    An RDNH fund would make it viable for more plaintiffs’ attorneys to focus on this area of law to become more skilled at winning them.

    Picking cases with the likelihood of collecting attorneys fees would sustain the fund.

    And how many investors bid up this domain on Drop Catch? This UDRP complaint could have been filed against any of them.

    Counterclaim?

    I don’t see a viable counterclaim under the ACPA or US trademark law.

    The pending US trademark application is by someone in China who claims to have used PANET in commerce as of Dec. 23, 2020, for soap and cleaning products. The examiner rejected this application on the basis that it is merely a surname.

    How to collect?

    The Panet app on the Google Play store earns ad revenue from Google, so it’s easy to collect if there’s a default judgment. It focuses on the Israeli-Arab market and it has 1,000,000+ installs according to the Play store.

    • “I don’t see a viable counterclaim under the ACPA or US trademark law.”

      You spelled it out yourself:

      “The Panet app on the Google Play store…”

      …is downloadable in the US. Same on the Apple store – I just downloaded it to check. There is no question that the app is available to users in the US.

      “It focuses on the Israeli-Arab market…”

      Regardless of its target audience – many of whom are in the US – it is not subject to dispute that the app is available in the US. I’m curious why you do not believe the distribution of an app named “PANET” in the US, and for many years, is not a basis on which to claim common law rights in the US.

      One doesn’t need a registered mark to pursue an ACPA claim, and the fact that it is incidentally also surname does not prevent them from claiming common law rights in their longstanding use of “PANET”. The name is apparently derived from “Palestinian Arab Network”, which pertains to a community that is certainly not limited to one geographic area, and they’ve certainly been doing it for more than five years. I certainly met quite a few young Palestinian and Israeli Arab people when I was in grad school in Delaware.

      Their app is clearly available on US platforms with a US revenue stream. I would not bet any money on the proposition that their app is not downloaded or used by anyone in the US. It seems like you are saying both “They don’t do business in the US” and “They are available in the US and have a revenue stream in the US.”

      “It focuses on the Israeli-Arab market and it has 1,000,000+ installs according to the Play store.”

      There are only just under 1.9M Arabs IN Israel, David. Unless more than half of them have this app, where do you think those 1M+ installs are happening? If you include territories outside of internationally-recognized boundaries, then you get a higher figure, but still unlikely that 20% of all Arabs in the region have this app. Someone, somewhere else, is downloading this app. The localized Google and Apple English languages pages for the app provide a likely suggestion of where that might be.

      “Picking cases with the likelihood of collecting attorneys fees would sustain the fund.”

      Getting a judgment and collecting one are two different things. But most cases settle. What would you say if someone decided they didn’t want to be on the hook for potential damages, and reached agreement to dismiss the case in exchange for transferring the domain name. Or, would the domain registrant be liable to the fund for fees paid up to that point?

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