Everphone.com UDRP: Despite Front Running, Domain Registrant Prevails

7

Front running is the act of attempting to sell a domain name that is not owned by the person who is making the sale attempt. Unfortunately, front running has become more common, and I wrote about front running during NameJet auctions  a few years ago. There was an interesting UDRP decision that domain auction participants will want to note because front running almost cost the domain registrant a domain name.

A company called Everphone GmbH filed a UDRP to get the Everphone.com domain name. This domain name sold on NameJet for $842 in January of this year, according to NameBio. According to the complainant in this UDRP, it seems that two entities contacted the complainant either during or prior to the auction claiming to be willing to sell this domain name. Because the complainant had been dealing with entities that seem to have been front running this domain name, the auction winner and current registrant was not aware of these other emails when the complainant approached him about selling the domain name.

In the UDRP decision, the domain registrant’s attorney Jason Schaeffer (of ESQWire.com) did a good job explaining that the two prior contacts were made by front runners and not made by the domain registrant, who didn’t own the domain name at the time time. In the decision, the three member panel understands what happened and did not hold it against the domain registrant:

“Accordingly, the Panel accepts the Respondent’s assertion that both Chapdomains and Regystro were engaged in “front running”, i.e. that they had become aware of the auction and were speculating with a view to acquiring and quickly selling on the disputed domain name if they managed to do a deal with the Complainant.   It follows that whatever action they took cannot be ascribed to the Respondent.”

There have been a number of times I have been contacted by someone after an auction who believes I offered a domain name for sale to them. They don’t often understand that it was someone who was frontrunning the domain name, and this can be confusing. I am glad the panel was able to make the distinction between front runners and the domain registrant.

Another aspect of the decision is good for domain registrants who may have lost a UDRP before:

” In the context of a large domain name portfolio and eight pro-Respondent UDRP decisions, the Panel does not consider that the one adverse UDRP decision should be treated as an indicator of bad faith in the different circumstances of this case.”

The panel found that the domain name wasn’t bought in bad faith, so the domain registrant won this UDRP decision. This is a decision domain owners who regularly participate in auctions will want to keep in mind. It is also a decision domain owners may wish to think about when deciding whether or not to hire a UDRP attorney for the defense.

7 COMMENTS

  1. LOL

    Okay, so check this out. I wasn’t going to comment here, until I followed the link to the 2012 front running thread…https://www.domaininvesting.com/namejet-frontrunning-email/

    So then I checked out the reader comments there, and lo and behold there is this one which nobody even addressed…https://www.domaininvesting.com/namejet-frontrunning-email/?replytocom=70844

    So there you have this video in which none other the Marc Ostrofsky himself is advocating what amounts to “front running” on the Internet…https://youtu.be/gW5UZZHkZHA (scroll to 1:47)

    And not a single person in the blog thread said a word about it. Not a peep, zero, zilch, nada.

    So these 5 years later I will then: wow, shocking. Who knew? LOL

    • The difference is that Marc isn’t advocating the sale of one of a kind items owned by someone else.

      If you need a new garage door and motor, you place your order with the garage door installer and give them a deposit. They will then order the garage door and motor from a supplier or two and install it in your home. Similarly, if you are selling various products on your website that you can order from a supplier after an order is placed on your website, it’s all good if you can fulfill the order. This happens all the time in virtually every store and many websites.

      A person who is front running a domain name doesn’t own it and will not be able to fulfill the order if someone else wins the auction for it. They are attempting to sell something where there is a great likelihood they will not be able to fulfill the deal because the domain name is one of a kind and there is no exclusive access to it.

    • Okay Elliot, that’ll work. It seems the problem is simply that his way of articulating the matter in the video there is so awkward and ambiguous that it smells like shady front running vs. just normal and legitimate commercial practice.

  2. I caught a very well known broker doing essentially the same thing. Asked him to get a price from the Registry for a domain name and he offered it to me for 25K only to find out later that the price from the registry was actually 5K. Glad I passed at 25k and I will never do business with them again.

  3. offering something you dont happen to own presently is a well known activity on wall street; called selling a ‘naked option’ wihthout owning the underlying stock at the time….just sayin

Leave a Reply