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?

Domain/IP Lawyer Launches Website on TrademarkAttorneys.com

Elliot Silver
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6

New York City-based intellectual property lawyer Brett Lewis (better known by many as a domain lawyer), from the law firm of Lewis & Hand, has launched a new website on the generic domain name TrademarkAttorneys.com.

The website has started out as a blog, and it will eventually grow into a full-fledged trademark law website. The recently launched website is currently ranked No.2 on Bing and Yahoo, and it is on the second page of Google for the competitive keywords. It’s an advantage of owning a keyword domain name that would have been much more difficult had Lewis tried to rank highly using his law firm’s corporate domain name.

The domain name was purchased for an undisclosed sum a few months ago from well-known domain investor, Rob Grant. This was a name that had been previously up for auction, and I thought it would be a great buy for someone in that field.

When asked about his motivations for building the site, Lewis replied, “we’re excited to own the name and to be developing a blog.   The TrademarkAttorneys.com blog will have a heavy focus on domains, and hopefully can be a resource for the domaining community.”

Once Lewis’ site ranks in the top of Google for his key terms, he will save significant money on pay per click advertising. As with any domain investment, it’s a significant short term expense, but will certainly pay off over time.

Due Diligence Before Buying a Domain Name

Elliot Silver
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11

If you’re a domain investor, it’s likely that you’ve either been offered a stolen domain name or seen one advertised for sale, whether you knew it was stolen or not. Buying a stolen domain name can cost the buyer quite a bit of money (once the name is recovered) and it could hurt his reputation if he sells it.

In my opinion, it’s the buyer’s responsibility if he buys a stolen domain name, and all buyers should perform due diligence on a domain name before making the acquisition or risk losing his investment and domain name. Just like with physical property, if a purchase is found to be stolen, the person in possession of it will probably lose it and will likely not see his funds returned (I am sure there are cases where this isn’t true – especially when something is bought in good faith, but it’s an assumption).

There are a lot of seemingly obvious clues that can be seen when a stolen domain name is offered, including ridiculously low price, top domain name offered by a new member of a forum without any previous feedback, or someone emailing you in private with a too good to be true offer. While not all of these necessarily mean a domain name is stolen, they are clues that a buyer should note and should set off red flags.

A buyer should use the Whois History tool offered by DomainTools to see if there are any suspicious changes in the Whois data. For example, if a Whois record seems to remain the same for 10 years and the most recent change notes a simple email address update while the rest of the record is the same, that is a big red flag.

A couple of years ago, I was emailed by someone offering a pretty good domain name at a great price that looked to be owned by a lady in New York, although the contact email had recently changed. I was able to get in touch with the lady shortly after domain investor Richard Lau had already done the same, and she was able to recover her domain name by contacting the registrar. Had I not done due diligence, I could have bought this name, which surely would have been taken from my account and given back to the rightful owner once they determined that it had been pilfered from her account.

Due diligence is especially critical when you are purchasing intangible property like domain names.

Wooot.com: UDRP Canceled Domain Now For Sale on NameJet

Elliot Silver
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1

Wooot.comIn April, I wrote an article about the Wooot.com UDRP that was filed by the company behind the popular Woot.com website. Surprisingly to me, the UDRP panelist ruled in favor of the complainant, but instead of giving the domain name to Woot, it was canceled. By canceling the domain name, it would go through the expiration process and then become available for re-registration.

I just received my daily email from NameJet announcing the day’s 50 Most Active Pending Delete Backorders. On today’s list, I noticed Wooot.com listed. The domain name currently has 6 bids with a price of $69. Potential bidders must place their back orders for this domain name by July 1 in order to participate in the domain auction.

Of course any buyer should be aware of the previous UDRP filing and ruling. Woot doesn’t want someone else to own it, and they may take legal action in order to get it.

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