Third Circuit Rules Domain Re-Registration Activates Cybersquatting Law

[lawpal]

In Schmidheiny v. Weber, the 3rd U.S. Circuit Court of Appeals revived a billionaire's lawsuit against an alleged cybersquatter who offered to sell him the Internet domain with the billionaire's last name followed by dot-com.

A lower court dismissed Stephan Schmidheiny's suit after finding that Steven Weber had originally registered schmidheiny.com more than nine months before the law took effect in November 1999.

Now the 3rd Circuit has ruled that the re-registration of the domain name in June 2000 "is an action within the purview of the Anti-Cybersquatting Act."

Law.com Full Article Here

[Drewbert]

Watch for a big increase in 10 year domain registrations, to the delight of the registrars & registries.

[YOYOYO]

HA HA HA..........

The 3rd Circuit will find every and any reason in the world to take a domain away from somebody.

So that in effect that nullifies the fact that the "goofy anti-cybersquatting act is not to be applied retroactively."

All someone has to do is just wait out the initial registration and they will get the domain.

Obviously not what the act was intended to do.

Hey, the fact that the plaintiff was a billionaire didn't hurt.

Of course I'm not sayin that any envelopes were passed around, but we can't have these rich people being put in these type of positions.

[Ari Goldberger]

I just read the case. The good news is that the court considered this was a re-registration only because the original registrant, Steven Weber, re-registered under a new company name, Famology, Inc. with a new registrar. In other words, it is not clear that the court would simply have ruled against Weber if he merely "renewed" the domain under his own name.

I note that Network Solutions uses the term "renewal" and "re-registration" interchangeably in its registration agreement. So, all things considered equal, I'd rather be with a registrar that doesn't say I "re-register" my domain name every time I renew it.
For example, say you register Schmuzooly.com because it's a neat word, but you never make trademark use of it. A couple years later, a company comes along and registers a trademark for Schmuzooly. You then offer to sell it to them after you renew the domain. A strict interpretation of Schmidheiny could mean that this is bad faith re-registration - if renewal is deemed to be re-registration. However, it is my opinion that the Schmidheiny court did not go that far -- even if it ultimately had that effect since Steven Weber was, in effect, Famology, Inc.

Anyway... one lesson to be learned is that you always take a risk when you offer to sell a domain name. Check the dictionary first, or do a Google search, and make sure it's a word or a descriptive term....Don't offer to sell it if it's unique -- like Schmidheiny.

Finally, this is not just a 3rd Circuit view. I know of another case in a different circuit that was settled because the District Judge was going to rule the same way in a domain/trademark case.[U]

[fizz]

Interesting topic - thanks for your insights Ari. In light of this case one or two registrars might take a closer look at the wording of their agreement in respect of the terms "renewal" and "re-registration".

I guess if you own a unique name the thing to do is to use it in some sensible way on the net and wait for someone to approach you with an initial offer to purchase.

Naturally the response needs careful thought, especially if the prospective buyer has squillions of bucks to put into a legal battle. And never underestimate just how much a person is prepared to spend when it involves their name, and in some cases, ego.

[DNS Kidd]

Over the past few weeks, I have concluded that:

Every C&D is a possible offer to sell, someone is interested...

Every offer to buy is a possible C&D, someone is interested....

[Ari Goldberger]

Originally posted by fizz


I guess if you own a unique name the thing to do is to use it in some sensible way on the net and wait for someone to approach you with an initial offer to purchase.

Naturally the response needs careful thought, especially if the prospective buyer has squillions of bucks to put into a legal battle. And never underestimate just how much a person is prepared to spend when it involves their name, and in some cases, ego.

-------------------------
You should always have a plan for your domain name in order to satisfy your legitimate interest. A plan is helpful, a branded web page is better, without an all out site the best. Many decisions hold that a legitimate interest is ipso facto created by registration since no other party can claim exclusive rights to it -- provided you don't use it in a competing way (e.g. use apple.com to sell Dell computers).

Never offer your name for sale. This is good advice from a legal and business perspective -- unless there is benefit in doing an auction (to create a bidding war) and only do this after legal consultation. No one should ever have a UDRP action brought against them where an offer to sell is alleged as bad faith. (However, I should note that I have prevailed in several UDRP actions where it did NOT constitute bad faith to offer a name for sale or, more often, to responde to an inquiry). But you don't want to have to make that defense in my opinion.

If someone wants your name bad enough they'll contact you, and you'll always do better as an unmotivated seller. From a negotiating point of view (and for legal protection) it is always better to use a third party to negotiate. A third party can't commit you to anything, won't show your cards, and creates a protective barrier between you and the seller that has numerous advantages. Plus, you can benefit from an experienced seller.

A bit of self promotion. While I would recommend you use almost anyone to negotiate on your behalf because it's never good for you to deal directly with the other side, I recommend using a lawyer because you get the added benefit of legal advice as part of the deal. I offer standard contingency rates for negotiating disputed and non-disputed domains. I charge an initial flat fee for responding to a C&D's.

I'm sure other attorneys will offer similar deals.

I have negotiated disputed domains as high as $500,000 as recently as late last year, and a $1 million dollar negotiation (+ % of company) in the past three years.

[fizz]

Many thanks for your wise suggestions Ari. They are appreciated.