Bought for $917,000 in 2019, Stars.com Saved in UDRP

0

When I saw a UDRP filing against Stars.com at the National Arbitration Forum, I did a double take. Stars.com is clearly a valuable domain name, and the generic nature of Stars.com should make it entirely defensible. Attorney Stevan Lieberman represented the registrant, Leo Radvinsky / Cybertania Inc., in this proceeding, and the three member panel ruled in favor of the registrant. The UDRP decision was posted to the NAF website this morning.

The UDRP was filed by a company called Al-Dabbagh Group Holding Company, and the allegation in the complaint shows why it filed this UDRP:

“Respondent has no rights or legitimate interests in the Domain Name. He is not commonly known by the Domain Name and is not licensed to use Complainant’s STARS FOUNDATION mark. Dabbagh Information Technology Group (DIT), which is an affiliated company, registered the Domain Name in 1998. While employed by DIT, Respondent, without Complainant’s authorization or approval, transferred the Domain Name to his personal account at the current registrar. Complainant also alleges that the Domain Name was wrongfully transferred in July 2018 by a former DIT employee named Khaled. (Complainant did not attempt to reconcile these two versions). In any event, the Domain Name was subsequently listed for resale on the web site for $3 million. Upon information and belief Complainant alleges that Khaled transferred the registration to Leo Radvinsky, the Respondent. Respondent has not used the Domain Name in connection with a bona fide offering of goods or services because the only use he has made of it is to offer it for sale.”

Historical Whois records at DomainTools from 2018 appear to confirm that the domain name had previously been registered to The Stars Foundation, and the admin organization was listed as Dabbagh Group.

In addition to making presenting arguments about the descriptive nature of the Stars.com domain name, the respondent argued that the complaint was outside of the scope of the UDRP policy, which is focused on cybersquatting claims rather than ownership disputes.

From my perspective, there are two highlights from this decision that are notable. The first aspect is the discussion about the legitimacy of the business of domain investing and domain name sales:

“Further, the holding and sale of generic domain names is considered a legitimate activity under Policy ¶ 4(a)(ii). Alphalogix Inc. v. DNS Servs., FA 491557 (FORUM July 26, 2005) (“Respondent is in the business of creating and supplying names for new entities, including acquiring expired domain names. This is a legitimate activity in which there are numerous suppliers in the United States.”), General Machine Products Company, Inc. v. Prime Domains (a/k/a Telepathy, Inc.) FA 92531 (FORUM) (“As Prime Domains has demonstrated, the term “craftwork” is in widespread use in a descriptive sense. The Panel finds therefore that Prime Domains has rebutted General Machines’ arguments and has proven that it is in the business of selling generic and descriptive domain names such as craftwork.com. As a result, Prime Domains does have a legitimate interest in the domain name. That Prime Domains has offered to sell this descriptive, non-source identifying domain name does not make its interest illegitimate.”), Landmark Group v. Digimedia.com, LP, FA 285459 (FORUM August 6, 2004) (“As long as the domain names have been registered because of their attraction as dictionary words, and not because of their value as trademarks, this is a business model that is permitted under the Policy”). In light of Respondent’s convincing assertion that prior to the commencement of this case he had no knowledge of Complainant or its rights in the STARS FOUNDATION mark, and in light of the generic nature of the Domain Name itself, it is clear that his acquisition of the Domain Name was not intended to target Complainant in any way.”

With this stated, the panel ruled that the respondent has rights or legitimate interests in the Stars.com domain name. Because the complainant did not prove all aspects of the UDRP, the respondent will retain the domain name.

The second notable aspect of the decision is the price the domain registrant reportedly paid to acquire the domain name. According to the decision, the domain registrant “paid in excess of $917,000.00 for the Domain Name at auction in 2019.” The auction venue was not mentioned in the decision, but I have an email into Stevan Lieberman to see if that can be disclosed. Assuming is an adequate public record of the domain name sale, it will make Stars.com the 8th largest publicly reported domain name sale of 2019, as recorded and archived by DNJournal.

Leave a Reply