I read a disappointing UDRP decision this morning involving the 4 letter .com domain name, DWRS.com. The WIPO UDRP panelist, Warwick A. Rothnie, ruled in favor of the complainant, who had unsuccessfully tried to acquire the domain name via GoDaddy’s Domain Brokerage Service (DBS). The complainant is a shoe company founded in 2015 that uses DWRSLabel.com for its website.
I want to make it clear that I don’t lay the full blame on the panelist. The domain registrant did not file a response to the UDRP as the contact information on the Whois record was inaccurate. The panelist, in my view, made a good attempt at piecing the ownership and usage history of the domain name beyond what was presented by the complainant. Kudos to him for using the Wayback machine and Whois records to see how the domain name has been used over the prior few years. This made the registered and used aspect of the UDRP decision murky at best.
What bothered me most about the decision is the panelist’s reliance on the GoDaddy DBS broker’s suggestion about increasing the offer. Since the domain name does not appear to have been listed for sale on GoDaddy or Afternic, the DBS broker is working for the buyer. His job is to get a deal done at the best price for the buyer. Here’s an excerpt from the decision:
“Generally speaking, a finding that a domain name has been registered and is being used in bad faith requires an inference to be drawn that the respondent in question has registered and is using the disputed domain name to take unfair advantage of its significance as a trademark owned by (usually) the complainant.
In the present case, the Complainant plausibly argues that the Respondent became the registrant of the disputed domain name after the Complainant’s trademark had become well known.
The Respondent has not denied this. Nor has the Respondent denied knowledge of the Complainant and its trademarks. On the contrary, through the GoDaddy broker, it offered to transfer the disputed domain name
for the sum of USD 40,000. There is no evidence before the Panel which would suggest this amount reflects the intrinsic value of a domain name comprised of a four letter acronym rather than the Respondent’s
assessment of the value of the disputed domain name to the Complainant. On the contrary, the GoDaddy broker’s recommendation that the Complainant’s representative make an offer of USD 2,500 – 5,000, and subsequently USD 10,000, tends to suggest that USD 40,000 does not reflect the intrinsic value of the disputed domain name apart from its association with the Complainant’s trademarks.”
I don’t think the inference was correct. I do think the DBS broker was trying to get the best price for his client, the buyer. Sure, he could have suggested a higher number, but in a negotiation involving a dynamically valued asset like this type of domain name, brokers typically suggest incremental offer improvements to secure the best price for a client.
In my view, the majority of 4 letter .com domain names are investment grade domain names that can have many uses. In the case of DWRS.com, I see quite a few DWRS acronyms in addition to companies that are called DWRS. For example, DWRS stands for Drinking Water Reporting System and Disability Waiver Rate System. In addition, I see there is a construction related company in Switzerland called DWRS that uses DWRS.ch for its website. There are also more than 10 DWRS domain names registered including quite a few ccTLDs.
Putting this simply, I believe the domain registrant acquired DWRS.com as an investment because it could be of interest to a wide variety of organizations and businesses. I do not believe the registrant acquired this domain name because of the complainant.
The value of 4 letter .com domain names can vary greatly. Some sell for hundreds of dollars and others sell for millions. There are a whole lot of domain names in the 5-6 figure range, too. I don’t think $40,000 sounds too ridiculous for DWRS.com, and that was without a counter offer. Perhaps the seller wanted to land on $15,000 or $20,000 and asked $40,000 so they could get to that lower number. In a negotiation, everyone is trying to get the best deal done, and I don’t think the panelist should have used the buyer broker’s counter offer suggestion as a yardstick for the domain name’s valuation. I also think panelists should stop using an asking price as a measure of bad faith on dynamically valued assets like domain names.
Very good post Elliot.
#1) I NEVER knowingly use WHOIS Privacy
#2) Any serious domain investor always uses a 3 member panel.
#3) Unless I know I am on VERY FIRM legal ground – I NEVER respond to broker inquiries.
#4) That is why I DO NOT use WHOIS Privacy.
#5) Collectively the WHOIS Privacy coupled with some huge offer number (in the eyes of the panel) thru a broker was apparantly enough for the 1 member panel.
In the end the panel just shot a bullet between the eyes of Godaddy , Sedo and all the rest of third party brokers.
Bri
My AI domain appraisal bot at https://boredhumans.com/domain_appraisals.php values the domain at $34,384. Estibot shows $4800. So asking $40,000 in the hopes of getting a counter offer seems very realistic, even though it is probably not really worth $40,000.
interesting Eric – BoredHumans.com …. I just tried a few of mine like RaceResults.com and CapitolHill.com…
A bit a research on panelist Warwick A. Rothnie shows he is pretty grounded in his opinions.
He did not need to mention the $40K offer IMO as bad faith….dangerous teritory…..
BUT Elliot – anybody reading this post should be on HIGH ALERT before making an offer via a broker.
This is not just a chit-chat post
I would blame the panelist for this ridiculous judgement and file in court to defend . Dwrslabel.com is years after dwrs. Com was registered.
I would not be given any figure to any godaddy broker henceforth,they have to get a good figure before I respond to them next time .
Just ridiculous to read the judgment.
undaunt –
it takes about $200K in legal fees through all legal manuvers to defend.
Eeasier said that done sir.
The value of the domains depends on your perspective.
The panelist is totally unqualified to make an appraisal value judgement for any domain; and there is no reason it should matter in the case anyhow. UDRP is an absurd scam.
An LLLL.com? Is Warwick Rothnie a flat-earther? Can’t he Google ‘world population?’
The Policy is framed on the ACPA, and unpredictability like this negates the whole point. When will they purge Rothnie? Everyone is still laughing at his theft of PolkaDot.com, and now this.
Maybe Rothnie will finally get booted when 4.cn cleans the UDRP’s clock over PolkaDot.com, which was open howling theft. Hundreds of other registered TM users besides the crypto Complainant’s TM registration…in 2019 (!!!). ‘Polka dot’ is the polar opposite of ‘distinctive.’ But maybe 4.cn can’t sue…maybe they (correct pronoun, ‘Xi’) disappeared the 2017 registrant… (The law will not protect unclean hands, 中国共产党, wake up and smell the future, dumdum.)
ACPA: “if the mark is distinctive at the time of the registration of the domain name…”
15 USC 1052(f): “…prima facie…proof of substantially exclusive and continuous use thereof as a mark by the applicant in commerce for the five years before the date on which the claim of distinctiveness is made.”
“Distinctive” is a term of art in trademark law and is determined by analyzing several factors. Essentially, a mark is distinctive when the consumers have come to recognize it as the source or origin of certain goods or services. … In general, if a word has been in substantially exclusive and continuous use as a mark in commerce for five years, it will be deemed distinctive as to those goods/services 15 USC 1052(f).