WIPO Takes Away a Geo Domain; Hayward.com Putting It On Our Worst of 2010 List
Talk about a scary decision.
A domainer just lost a domain he paid $20,000 to acquire and recently valued it at $100K.
A three member WIPO panel took away, what most of us would regard to be a Geo domain, Hayward.com and wwwhayward.com and awarded it to the trademark holder Hayward Industries.
Hayward is a city in California with a population of 150,000 people.
Here are the facts as laid out by the panel:
“”The Whois records show that the domain name <hayward.com> was created on July 26, 1995, and the domain name <wwwhayward.com> was created on August 14, 2004. The Respondent acquired the rights to the domain name on or about July 31, 2006.”
Respondent states that “Respondent, Chad Wright, aka WebQuest.com, Inc. is in the business of providing pay-per-click search engines offered through his geographical domain names” and that “Respondent also owns generic domain names…” Respondent paid over $20,000 for the domain name <hayward.com>.
“”Complainant states that it sent a demand letter to Respondent regarding the disputed domain name <hayward.com> on August 1, 2006, a copy of which Complainant provided as an annex to the Complaint. In a response, also included as an annex to the Complaint, Respondent’s counsel wrote in a letter dated August 4, 2006, that Respondent “is the registrant of geographically designated domain names” and that Respondent would “prevail in any legal dispute over the geographical name <Hayward.com>…”
“”Complainant states that Respondent offered the domain name <hayward.com> for sale via an online auction, ending November 4, 2009, with an “opening minimum bid” of $100,000.00, as shown in an e-mail from SnapNames dated October 29, 2009.”"
“”"Complainant states that “[t]he main page of the “www.hayward.com” web site is a typical minimalist site set up by cybersquatters for the sole purpose of generating click-through revenue. Most notably, upon entering ‘hayward’ in the provided search bar, the user is inundated with sponsored links to web sites that provide access to the products of [Complainant’s] direct competitors.” Complainant further states that although the domain name <wwwhayward.com> “no longer resolves to an active page,” a previous website associated with that domain name, included as an annex to the Complaint, included links to Complainant’s competitors”"”.
“”"Respondent is correct in its observations that the word “Hayward” is the name of a city in California (and also has other definitions) and that pay-per-click (“PPC”) websites do not necessarily indicate that a Respondent lacks rights or legitimate interests.”
“”"However… the websites associated with the disputed domain names in this case contain (or contained) pages with links offering or leading to pages with links offering goods or services that are competitive with the goods and services offered by Complainant under its HAYWARD Trademark.”
“Clearly, the disputed domain names are therefore not being used solely in connection with their geographic meaning. ”
The panel found that:
“It is by now well established that PPC parking pages built around a trademark (as contrasted with PPC pages built around a dictionary word and used only in connection with the generic or merely descriptive meaning of the word) do not constitute a bona fide offering of goods or services pursuant to paragraph 4(c)(i) of the Policy, nor do they constitute a legitimate non-commercial or fair use pursuant to paragraph 4(c)(iii).”
“”Respondent has not shown that it has used, or made demonstrable preparations to use, either of the disputed domain names in connection with websites about the city of Hayward, despite a statement from Respondent’s counsel more than three years ago indicating that <hayward.com> was a part of Respondent’s portfolio of domain names that correspond to geographical names in the same region of California.”
“While Respondent was not obligated to immediately use either of the disputed domain names in connection with geographic-specific websites, Respondent should not have parked the domain name in the interim with a page that improperly profited off of the value of Complainant’s trademark with PPC revenue.”"
“”Finally, the Panel finds it informative – though not decisive – that, according to documents in the record, Respondent purchased the domain name <hayward.com> for USD$20,000 and was attempting to sell it for at least USD$100,000. “”
“”These figures would seem to indicate that Respondent saw some value in this domain name for reasons other than its existence as the name of the city of Hayward, California – with a population of only about 150,000 people and for purposes other than as a PPC parking page (which, in the normal course, would not be expected to earn a return to justify such a rich investment).”"
I’m not sure I have ever read a WIPO decision where the panel looked at the purchase price and then determined the motivation for the purchase based on the price.
They are basically saying that $20K for Hayward.com, a city of just 150,000 people, is way too much and the value of the trademark therefore must have been considered by the domain holder in paying that much for the domain.
If the domainer only paid $5K for the domain would have the panel then found the domain owner could have indeed bought it just for the value as a city?
If not then why would a WIPO panel even go down this line of reasoning and discuss the purchase price?
If the domain owner put up the domain with a reserve of just what he paid for the domain, $20,000 instead of $100,000 would the panel decision have changed?
If not then why bring this issue up?
This is another example of how domainers are sitting ducks with PPC pages, as almost every word, 2 and 3 letter combination and every saying and/or phrase is trademarked somewhere in the world and this system is build around taking away your property if you offer to sell it.
Image a law that allowed your house or car to be taken away if you just put an ad in the newspaper to sell it?
We hope that Chad appeals this ruling into Federal Court not just for his sake but for the interest of the entire industry
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“What this man tried to do was extremely unethical”-end
Again I ask. How?
“What this man did” was put it on a completely generic unoptimized lander that neither showed links to anything “pool” related nor “city” related. Completely generic without any auto optimization at all.
What Hayward Industries did was to use the search box and enter in “Hayward Pool Equipment” or something similar and print out those results pages and submitted them to WIPO as “evidence”, never revealing that they themselves completely manipulated the search results they took screen shots of.
The registrant had nothing whatsoever on the landing page relating to Hayward Industries or even generic pool supplies at all, so all this talk about how “he deserved it”, “unethical”, and the like is completely opposite of reality.
MHB,
The Panel clearly states that the purchase price is “informative – though not decisive.” It references the purchase price because, in the Panel’s opinion, the purchase price of 20k far exceeded typically expected returns, even with a PPC program. The main issue was the fact that the domainer was profiting from the Hayward trademark by utilizing PPC advertising that linked to competitor’s products. How is that “fair use?” Even if the domain was purchased for 1k, same result. In my opinion, unlikely there will be a new “how much did I pay for that domain name” test that’s determinative in future decisions.
Thanks for the post. -Roger
“Informative – though not decisive” implies that it was part of the evidence that the panel “weighed”. Standing by itself, it was not enough, but when added to other “evidence” it apparently tipped the scale.
However, it was obviously *not* “information”, but instead “disinformation”. We’ll see how it goes in the courts. I think the pool company will lose, when all facts are considered. At best, they might get minor money damages, but that in no way implies they are entitled to the domain name itself.
Roger
“informative – though not decisive.”
Means to me that it was taken into account as a factor, one important enough to mention in detail although not dispositive.
“”in the Panel’s opinion, the purchase price of 20k far exceeded typically expected returns, even with a PPC program”"
What does the panel base this on?
Does the panel have any expertise on what domain typically sell for or what a “typically expected return”?
From their discussion I would say the answer is clearly no.
Therefore since they don’t know a thing about domain valuation or what a “typically expected return” is, how can they offer any opinion on this in a formal legal proceeding.
MHB -
Very good points.
It’s clear to most of us that the pool company found a way to exploit his parked page search to make it appear that he was infringing on them. The reality is is that Hayward Industries deceit worked on the WIPO panel. A good lawyer will probably get this decision tossed and all legal costs placed squarely back on the pool company.
Just another frivolous case that will help to clog the legal system further, and only caused frustration, simply to end where it began.
Totally nuts! Big business again trying to destroy the little man. Corporate giants are here to stay and continue to bully us into submission. People won’t put up with this for too much longer.
Media monopolies, like Florida Times Union, have the resources to build out sites like Jacksonville.com – so where the Panel in Hayward.com thinks they are doing the right thing in killing us – what they are really doing is killing small business and perpetuating big business – i.e. WalMart eminent domain using 3rd party results via Google, Bing, Ask as the justification.
Furthermore, ICANN thru its Gestapo agents, like WIPO, is simply a “non-profit” club redefining itself (for-profit) every opinion.
Finally when you are $20K into it plus another $7K in legal/UDRP – and the complainant knows they have an uphill battle – it is probably worth finding at least another $20K to challenge it in Federal Court. Certainly the city of Hayward, itself, might be willing to muddy the waters as well.
Brian
We shouldn’t confuse the situation here. Hayward Industries doesn’t apear to be a very large corporation. It seems to be a smallish company who have decided to exploit a hole in the decision making process. How much would you like to wager that the owner of the company was informed of a similar result while swinging a golf club and pounding a bear with a buddy who knew someone that did the same thing.
Things like this tend to make their way through the elitists grapevine very fast. This case will become the norm rather than the exception if it’s left standing.
UPDATE
The domain owner filed a federal case on this domain to stop the turn over
http://www.elliotsblog.com/webquest-files-lawsuit-over-hayward-com-1087