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Why I Am Not Worried About Domain Name Seizures

Elliot Silver
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25

There have been a surprising number of mainstream articles regarding the United States’ Immigration and Customs Enforcement (ICE), a division of the Department of Homeland Security. Apparently, ICE seized the domain names of alleged file sharing websites without any type of notice to them. In fact, I can’t remember the last time I received so many “did you see this” emails/phone calls from friends who aren’t in the business.

I will preface this by saying that I don’t like the idea of the government acting as judge and juror, while not seeming to give the website and/or domain name owners the opportunity to defend their actions. It’s scary that the government can simply take over some websites at it’s whim without the owner’s chance to defend his or her actions..

However, if the companies that own the websites are or were doing something illegal while violating the rights of people in the US (whom ICE is responsible to protect), this seizure is not such a huge deal as some might make it out to be. I think John Berryhill’s comment on Mike Berkens’ blog sums it up pretty well, comparing the seizure to that of a drug smuggler whose boat was used to smuggle drugs illegally.

Eventually, these website operates should have their day in court, but taking away their platform is a way to temporarily stop them from doing what the government believes is an illegal act (although it seems pretty simple to move to another domain name).  I don’t know where to draw the line when it comes to seizures such as this, but if a company happens to be brazenly  flouting  the law, I am not opposed to government intervention. If these website operators are in the right, then they will certainly have their day in court.

Some people seem to be making a big leap by fearing their domain names could potentially be put at risk. Sure, if you are doing something the US government finds  blatantly  illegal, then perhaps yours could be at risk. If someone is arrested for smoking weed in a public park, or firing a gun in the air in that park, it doesn’t mean you are being put at risk of arrest if you go for a jog in the park. If people were being rounded up for having a picnic in the park, that would be a different story.

Domain Name Implications as Company Fights Over New Hampshire Geographical Trademark: Mount Washington

Elliot Silver
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3

Mount Washington in New Hampshire

I grew up in southern New Hampshire and I skied in NH’s White Mountains many times, so this story was interesting for business and personal reasons. It’s also something that Dark Blue Sea should note because of a domain name in its portfolio.

According to ABC television affiliate WMUR, it looks like the owner of the Mt. Washington Hotel (a landmark hotel in the region) is fighting to prevent other lodging businesses from using the term, “Mount Washington.” The interesting aspect of this is that there is a mountain called Mount Washington where the hotels are located, hence the geographical descriptor.

If you live on the East Coast, you’ve probably seen the bumper stickers that say, “This car has climbed Mt. Washington,” and that’s the term that is being battled for right now (specifically related to lodging according to the article).

One reason this is interesting from a domain standpoint is that the company could come after seemingly generic domain names like MountWashingtonHotels.com, which happens to be owned by DBS subsidiary Protopixel.

Although Mt. Washington isn’t that big, imagine if a hotel/resort named the  the Las Vegas Resort or the Europe Spa tried to trademark those regional terms with regards to lodging. High value domain names like LasVegasHotels.com or EuropeVacations.com could conceivably come under pressure from the trademark owner if they were permitted to do so.

This may be a big leap, but if a precedent is set legally, I am sure others will attempt to follow suit. It’s just some food for thought.

Photo: Flickr

Guest Post: Court Denies Motion Against WebQuest in Hayward.com Case

Elliot Silver
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10

This is a guest post written by Brett Lewis of the Lewis & Hand law firm in Brooklyn, New York regarding a ruling from the Hayward.com lawsuit filed by WebQuest.com, Inc.  Brett’s firm is currently representing WebQuest. You can read some background on the bad  Hayward.com UDRP decision on Mike’s Blog. It looks like the litigation is off to a good start for WebQuest, and I wish them all the best in its legal battle for this valuable geodomain name.

In the case of WebQuest.com, Inc. v. Hayward Industries, Inc., 1:10 cv00306-OWW-JLT, the Court denied Hayward Industries’ motion for judgment on the pleadings, granting an early victory in the case to WebQuest.

Hayward Industries, which manufactures pool lights, pumps, and filters, had argued that even accepting all of the facts pleaded by WebQuest in its complaint as true, there was no question that WebQuest had acted in bad faith in registering the <Hayward.com> domain name.    The Court also granted WebQuest’s motion to strike Hayward Industries’ exhibits as “unnecessary evidentiary materials.”

Hayward Industries had tried to use those exhibits to support its claim for judgment on the pleadings, a claim which the Court said “bordered on the frivolous.”  The Court denied WebQuest’s motion for sanctions, however, finding that the motion, “was not so devoid of merit that it violates Rule 11.”

The case arose after WebQuest lost a UDRP decision over the <Hayward.com> and <wwwHayward.com> domain names and filed an action in Court to stop the WIPO-ordered transfer.    Although the decision comes at an early stage in the case, the Court’s ruling may signal that Hayward Industries will face a difficult task at establishing bad faith.

The Court stated that: “Defendant cites no authority for the proposition that bad faith may be found despite an entity’s lack of knowledge of a trademark holder’s existence.”  Given WebQuest’s claim that it registered the domain names for their value as geographic identifiers for the Bay Area city of Hayward, California, the Court found that, “Plaintiff’s activity does not as a matter of law establish the quintessential case of bad faith intent to profit contemplated by section 1125.”

Name Administration Successfully Settles ChilliBeans.com Dispute After Legal Battle

Elliot Silver
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20

Frank Schilling

It’s very frustrating to see a generic / descriptive domain name taken away from a registrant via UDRP.  Not only is it unfair, but it also adds to the cost of doing business, as a UDRP defense has become a risk that needs to be factored into any domain investor’s business model.

Back in late 2008, Balglow  Finance, a Brazilian company operating a sunglasses business known as “Chilli Beans,”  filed a UDRP for the descriptive domain name, ChilliBeans.com. The domain name  was/is owned by Frank Schilling’s company,  Name Administration, Inc. When the three person NAF panel ruled against Name Administration in November of 2008, the company filed a lawsuit in its Grand Cayman jurisdiction in order to keep the domain name.

I was just informed that Name Administration has prevailed in its nearly two year legal effort to keep this domain name. According to a release I received this afternoon, the companies agreed that  “NAI’s use of the generic Chillibeans.com domain name violated no enforceable rights of Balglow Finance.”

Name Administration has agreed to transfer the domain name to Balglow for an undisclosed settlement. According to Schilling,  “while it’s unfortunate that this dispute necessitated a trip to the Cayman Court, we are most pleased to have resolved the matter in such a mutually beneficial way.”

As a result of owning such a stellar domain portfolio of generic/descriptive domain names, Name Administration has been a frequent target of UDRP filings. Some companies wrongly believe they have more rights to domain names than his company, although they are most often proven wrong by UDRP panels. When I spoke with Frank, he discussed his company’s history with UDRP filings.

“We’re never looking to pick fights over IP rights and have really tried hard to do the right things in the domain name business, for a very very long time, but we’ve won 17 UDRPs.   That should say a lot.  Large companies often want what you have and don’t want to pay for it.   They try to vilify you for making money with generic domain names, and the UDRP has created an unholy intimation that holding a generic name for profit is somehow bad.   Well it isn’t!   Everybody owns something –  and when people challenge our generic IP rights we will spend whatever it takes to make our point that anyone is free to register a generic name on a first-come first served basis.”

It’s good to see Name Administration prevail in this dispute. I hope other companies realize that filing a UDRP for a descriptive domain name may seem like a cost effective option at first blush, but it can lead to a costly and drawn out legal battle if they mess with the wrong company.

What Kind of Business Entity Do You Operate?

Elliot Silver
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10

I read Sully’s Blog’s interview of Deborah Sweeney of MyCorporation Business Services, and it made me wonder what percentage of people in the domain industry have incorporated their domain business, be it LLC, S Corp, Inc…etc.

For tax and liability purposes, I operate two different LLCs for my businesses. Each business is its completely separate entity, and I don’t intermingle finances, expenses, or domain names. I maintain  separate  sets of books and bank accounts for each business. I also keep all personal expenses separate from my businesses for obvious reasons.

I am wondering whether domain investors who read my blog have taken steps to legally separate their personal and business accounts/finances. Please use the poll below to answer, and feel free to let others know what type of entity you operate.


Is This Reverse Hijacking, or Can Reader Win a UDRP For a 3 Letter .Com Domain Name?

Elliot Silver
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35

I received a comment in yesterday’s post that isn’t really related to the article. I also thought it was deserving of its own post, since there will probably be no shortage of opinions about the topic. Reader LindaM submitted the following question:

“One of my more successful websites, what I would call a ‘real world’ website (ie it sells actual stuff that is posted to customers and is an outgrowth of a long established bricks n mortar) is currently growing nicely. Lets call it “ThreeLetterAbbreviation.com” .

Now then, this website is making some waves in its field and Im currently working to develop it further, it now has an employee and an investor. I was wondering – can I make a move on the 3letter, lets call it “TLA.com” ? Obviously the asking price will be unaffordable but since my company has been trading under the name for years could I fairly win a UDRP? Currently the name resolves to a search portal and ads (not ours), its whois returns a web media firm in USA that own other plum domains, some parked and some developed. Im sure they would fight tooth and claw to retain the “TLA.com” domain name.

Getting the name would give us a shot at world domination, losing a lawsuit could kill us dead.”

In my opinion, even without knowing the domain names in question, this would appear to be a clear cut case of reverse domain hijacking. Just because there’s a better domain name out there that isn’t being used to it’s fullest extent (which of course is subject to one’s opinion), it doesn’t mean that another company has the right to get it via UDRP. In fact, I think that would be a misuse of the UDRP process.

The UDRP was established primarily to protect companies when their brands and/or marks were being used by others who did not have the right to use them. Based on what LindaM wrote, this does not appear to be the case. It’s an attempt to get a domain name at a lower expense than buying it, which I believe is reverse domain name hijacking.

If a company is poised for “a shot at world domination” with this 3 letter com domain name, LindaM should pay whatever it would take to get it, since that cost would almost certainly be lower than the profits that come with world domination.

What do you think?

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