Tuesday, April 23, 2013

How to Waste Thousands on "Winning" a Domain Name Dispute

By Zak Muscovitch

It boggles the mind that a sophisticated brand owner, represented by sophisticated intellectual property counsel, would make a "rookie" mistake in a domain name dispute, but it happens with surprising regularity.

A trademark owner has two options in a domain name dispute; 

1) The trademark owner can ask the Panel to "transfer" the disputed domain name to the trademark owner; OR

2) The trademark owner can ask the Panel to "cancel" the disputed domain name.

Both options cost the same amount (usually US $1300-$1500) for a single-member UDRP Panel at NAF or WIPO, plus legal fees that usually range upwards of US $2,500 - $5,000. Accordingly, a trademark owner Complainant can incur costs of thousands of dollars in bringing a UDRP domain name dispute, and if fortunate, this will be money well spent, because the Panel will declare the Complainant the "winner".

But there are "winners", and then there are real winners. A complainant that requests the UDRP Panel to transfer a disputed domain name is the real winner, because the UDRP costs and fees will have resulted in the trademark owner becoming the owner and registrant of the domain name that was previously held by a cybersquatter. 

The other kind of "winner" however, is really a big loser. By asking the Panel to "cancel" a disputed domain name, you might as well flush your UDRP costs and fees down the toilet. The reason is that "cancellation" merely results in the disputed domain name being taken away from the cybersquatter, and promptly made available again, for anyone at all who would like to register it. In other words, it goes right back into general circulation! And who will register it this time around for 10 bucks? The same cybersquatter who just "lost" the UDRP proceeding? Or perhaps a new cybersquatter? 

So, why would any trademark owner and its domain name lawyer, ever choose to request a cancellation rather than a transfer? Who knows, but it happens. Look at the recent case of  Sanofi v. Domains By Proxy, LLC / domain admin (WIPO D2013-0368). The Complainant was Sanofi of Paris, France, represented by Selarl Marchais & AssociĆ©s, France. The Domain Name, SANIFI.COM consists of the SANOFI Mark with the letter “o” replaced by the letter “i”. But instead of requesting the transfer, the Complainant requested the cancellation of the domain name. After spending likely thousands of dollars on a domain name dispute, this Complainant may find out the hard way, that it made a mistake by not requesting the transfer, as this domain name will likely be picked up right away, this time by a different cybersquatter, or even the very same one, all for the mere cost of the registration fee of about $10. 


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