201806.25

The Financial Evaluation of a Domain Name in a UDRP Proceeding

A Taiwanese company registered the disputed domain name senec.com in 2002. A German company, the owner of European trademarks “SENEC”, initiated a UDRP procedure. On the day of receipt of the UDRP complaint by the Arbitration and Mediation Center of the World Intellectual Property Organization (AMC-WIPO), the domain name gave access to a parking page including commercial links.
Before the complaint was filed, an attempted settlement failed. The German company had proposed to the Taiwanese company to buy the domain name for 1000 Euros. The offer was rejected, as the holder of the domain name considered the amount insufficient. Moreover, during the proceedings, the defendant did not make known his position.
Given the circumstances, many panelists would have had no scruple in ordering the transfer of the domain name. And such a decision would have found strong justifications in the WIPO case law(“WIPO Jurisprudential Overview 3.0”, points 3.1.1. “domain name registered or acquired primarily to sell the domain name to the complainant”, 3.3 “passive holding”, 3.5 “third-party generated material “automatically” appearing on the website”, and 4.3 “respondent’s default, where a good faith defense is not apparent”).
Yet the transfer request was rejected (WIPO, D2018-0839, Deutsche Energieversorgung GmbH v. MustNeed.com, June 4, 2018, Complaint denied). The plaintiff has not demonstrated the bad faith of the defendant for several reasons.
First, the domain name was registered in 2002, well before the trademarks (in 2017). Obviously, the holder of the domain name could not have knowledge of these trademarks. In those circumstances, it was impossible to conclude that the defendant was in bad faith. This argument alone suffices, in the vast majority of cases, to defeat the transfer request.
Second, in addition to the attempted settlement correspondence, the plaintiff produced a document determining that the domain name was worth 10 Euros. Since the 1,000 Euros buy-back offer was rejected, that encouraged the plaintiff to find the defendant to be in bad faith. The panel did not retain the argument. The panel considered, in the absence of further evidence, that the facts thus reported did not establish that the domain name had been acquired mainly for the purpose of selling it. Moreover, the issue of the admissibility of such documents must be raised: those emanating from an accountant should be more easily admissible than those generated by algorithms with opaque parameters.
Third, the commercial links generated by the parking page were unrelated to the goods and services for which the trademarks are registered.
Finally, the panel added that there was nothing in the UDRP complaint to suggest that the defendant knew the plaintiff’s reputation or even its existence.
In the end, the panel rejected the transfer request. By the mere fact of this decision, the position of the Taiwanese company is strengthened, which necessarily plays a role in the financial value of the domain name in the eyes of the parties.
In conclusion, it is sometimes better to take the time to imagine less procedural ways. At IP Twins, we strive to achieve effective solutions.