Vanity.com Lost In A UDRP Despite Pending Federal Court Case: Asking $1M For A Domain Is Bad Faith

In a case that should be VERY troubling for all domain holders the a one member UDRP panel just awarded the domain name Vanity.com to a Vanity Shop of Grand Forks, Inc, a trademark holder, despite the fact that the domain holder already filed a case in Federal Court asking for a declaratory judgement that is was not infringing on the complainant’s trademark.

So lets be clear here.

The UDRP panel could have, and in our opinion should have, not even ruled in this UDRP since the domain holder ALREADY  filed a case in federal court. but decided to make a ruling anyway and decided to take the domain away.

Having read the decision the decisive factor seems to be the domain holder offered to sell the domain for $1,000,000.

Also note that the complainant wasn’t the world famous Vanity Magazine, but a small clothing store out of North Dakota which grew into a 200 store chain.

Here are the relevant facts and finding by the one member panel:

“Complainant owns numerous federal trademark registrations for the VANITY mark, issued by the United States Patent and Trademark Office (“USPTO”)

“Complainant and Respondent’s marks are virtually identical; Respondent has not been commonly known by the disputed domain name; Respondent is not making a bona fide offering of goods or services or a legitimate noncommercial or fair use of the disputed domain name; Respondent is using the disputed domain name to direct consumers to its own website offering information, blogs, chat groups, and social media links on beauty, fashion, health, and self topics”

“Respondent is targeting the same consumer group as Complainant with its website”

“It is inconceivable that Respondent was not aware of Complainant when it acquired the disputed domain name; Respondent’s disputed domain name is causing confusion among consumers as to whether or not Respondent’s site is affiliated with Complainant;

Respondent offered to sell the disputed domain name to Complainant for $1,000,000 after Complainant offered to purchase the domain name from Respondent”

“Respondent has attempted to attract Internet users to Respondent’s commercial website by creating a likelihood of confusion with Complainant’s marks.”

“Respondent recently filed a civil action against Complainant in the United States District Court, Northern District of California for a declaratory judgment of non-infringement with respect to Respondent’s registration and use of the Vanity.com domain name; Respondent’s filing of a civil complaint in District Court takes precedent over this proceeding; Respondent registered the disputed domain name in 1995, over seventeen years ago”

“Respondent owns active and valid federal trademark registrations issued by the USPTO for the VANITY.COM mark (e.g., Reg. No. 3,720,766 registered December 8, 2009

“Respondent’s Vanity.com domain name is composed of a common English word, such that bad faith could not possibly have persisted; Respondent requests the Panel dismiss the Complaint without prejudice.”

“In situations where concurrent court proceedings are pending, as is the situation with respect to the instant Complaint, some panels have chosen to proceed with the arbitration filing.  ”

This administrative proceeding under the Policy concerns only control of the Domain Name, not any of the other remedies at issue in the federal litigation.  It is not binding on the court, and it does not preclude the prosecution of any claims, defenses, or counterclaims in the federal litigation”

“The Panel chooses to proceed to a decision.”

“Complainant asserts that it registered the VANITY mark with the USPTO (e.g., Reg. No. 1,780,669 registered July 6, 1993).  Complainant submits a printout from the USPTO website , which indicates that the mark is registered and that Complainant is the owner of the registration.”

“Complainant also asserts that its VANITY mark is virtually identical to Respondent’s  mark. ”

“Complainant argues that Respondent has never been commonly known by the disputed domain name.  ”

“The Panel notes that the WHOIS information identifies the registrant of the vanity.com domain name as “Vanity.com, Inc.”

” The Panel also notes that there is no other evidence on record addressing this issue.  Therefore, even though the Panel finds that the WHOIS information appears to indicate that Respondent is commonly known by the disputed domain name, the Panel concludes that Respondent is not commonly known by the <vanity.com> domain name under Policy ¶ 4(c)(ii). 

“Complainant also argues that Respondent is not making a bona fide offering of goods or services or a legitimate noncommercial or fair use of the <vanity.com> domain name.  ”

“Complainant states that Respondent resolves the <vanity.com> domain name to a commercial website offering information, blogs, chat groups, and social media links on beauty, fashion, health, and self topics.  Nonetheless, the Panel finds that Respondent is not engaging in a bona fide offering of goods or services under Policy ¶ 4(c)(i) or a legitimate noncommercial or fair use of the <vanity.com> domain name under Policy ¶ 4(c)(iii).”


“Complainant alleges that Respondent offered to sell the <vanity.com> domain name to Complainant for $1,000,000.  ”

“Complainant states that it initially offered to purchase the <vanity.com> domain name for $4,500-$10,000 dollars, based upon an appraisal of the domain name’s worth provided by GoDaddy.  ”

“Based upon the offer made by Respondent, the Panel finds that Respondent registered and uses the disputed domain name in bad faith pursuant to Policy ¶ 4(b)(i). 

“Complainant also alleges that Respondent’s disputed domain name is causing confusion among consumers as to whether or not Respondent’s site is affiliated with Complainant.”

“Complainant states that Respondent has attempted to attract Internet users to Respondent’s commercial website by creating a likelihood of confusion with Complainant’s marks. ”

“The Panel agrees with Complainant’s allegations and statements, the Panel finds that Respondent registered and uses the disputed domain name in bad faith according to Policy ¶ 4(b)(iv).”

“Complainant position is  that it is inconceivable that Respondent was not aware of Complainant when it acquired the disputed domain name.”

” The Panel finds that Respondent had actual knowledge of Complainant’s rights in the VANITY mark when it registered the disputed domain name, the Panel concludes that Respondent registered the disputed domain name in bad faith under Policy ¶ 4(a)(iii).”

Having established all three elements required under the ICANN Policy, the Panel concludes that relief shall be GRANTED.
Accordingly, it is Ordered that the Vanity.com domain name be TRANSFERRED from Respondent to Complainant.”

Comments

  1. says

    Here we go again! (1) How can we (domainers) insist on a ‘jury’ for our cases? Why? He who pays the piper calls the tune, so a one-man panel might just be ‘tempted’ by the devil. Bribery & corruption are still alive and well, thank you! (2) All in all, there’s no cause for alarm. This strange ‘judgement’ will definitely be set aside in the court of law, soon, very soon. UDRP my foot!

  2. Nat Cohen says

    This is by far the worst UDRP decision I’ve seen.

    The decision is so thoroughly flawed that it is hard to point out any one flaw, since every aspect of it is flawed.

    Reading the decisions feel like stepping into an alternate universe where everything has an opposite meaning.

    The respondent has a trademark with a date of first use going back 13 years, therefore he has no rights in the domain.

    The respondent has a website “offering information, blogs, chat groups, and social media links on beauty, fashion, health, and self topics. ” therefore the respondent is not making a legitimate use of the domain.

    The respondent responded to an offer to purchase the domain therefore the domain was registered 17 years earlier in a bad faith attempt to target the company that made the purchase offer.

    To those, like Neil, who say that the UDRP process needs to be reformed and that we need to act as a group to put pressure on ICANN, such a group already exists. It is the Internet Commerce Association (http://www.InternetCommerce.org).

    Mike Berkens is a member, as demonstrated by the blue Silver Member badge at the bottom of this blog. I am a member. Many other domain owners are members or supporters, including Frank Schilling, Kevin Ham, as well as many domain owners with much smaller portfolios who care about protecting our industry.

    We are a small group, with limited resources, which we combine to pay for an experienced lobbyist, Phil Corwin, to keep an eye on ICANN, engage in the policy making process, and put pressure on them when needed to protect against bad policies.

    The ICA has kept our membership to a small core of committed members to keep down on overhead since we don’t have an executive director. But we are reaching out now to greatly expand our membership.

    The issues facing our industry can’t be addressed with a small group, we all need to collectively work together to fight for the future of our industry and our livelihoods. We are so small we don’t have anyone to do member outreach or fundraising. All our resources go into working to protect domain owners rights through ICANN, Capital Hill and the courts.

    So if you care about these issues, I hope that you will learn more about the ICA, reach out to us, visit the internetcommerce.org website and join the ICA so that we can all work together to protect our investments in domains.

    We need to grow, and we need you to join, so that we have the resources to do more to protect our rights.

    Every domain we own comes with a UDRP or similar provision built into the registration agreement that says that our assets can be taken from us just as Vanity.com was taken.

    UDRP reform is one of the ICA’s top priorities.

    Our goals include:

    1. Ending Forum Shopping. Since the Complainant picks the forum, the forums compete with each other to be as pro-Complainant as possible. It is one reason why panels are stacked with active pro-trademark attorneys, but not a single domainer attorney is accredited.

    2. Ending the use of active trademark attorneys as panelists. It is impossible to maintain the appearance of an unbiased forum when attorneys are arguing cases one day on behalf of trademark owners that domains should be taken away from the current domain owners, and then appearing as panelists on very similar cases deciding whether the trademark owner or the current domain owner gets to keep the domain.

    3. Putting real teeth into a finding of Reverse Domain Name Hijacking so that a substantial penalty is involved and requiring panelists to make an RDNH finding when certain conditions are met, to cut down on the number of abusive complaints.

    There is a long list of other reforms that are needed, but the above 3 would be a great start.

    This is already a long post, but if you want to read more I’ve blogged about many of these issues.

    Why UDRP reform is needed:

    http://directnavigation.com/2010/01/udrp-a-guest-post-every-domainer-must-read/

    The problem of active TM lawyers appearing as panelists:

    http://www.domainarts.com/2011/10/21/my-personal-trainer-registers-sofitdc-com-receives-cd-from-sofitel-sent-by-a-wipo-panelist/

    Why RDNH needs to be a real penalty:

    http://www.domainarts.com/2012/06/18/why-reverse-domain-name-hijacking-needs-to-be-a-real-penalty-and-the-most-comprehensive-list-of-rdnh-cases/

    I hope you don’t mind the shameless plug, but it is for a good cause. There is a real need for collective action to protect our industry, the ICA is a group that is doing just that, and we need to publicize that fact more and we need more of you to join.

  3. Required says

    @Brad
    The price of one Van Gogh influences the next, but domain seller can ignore similar sales safe in the knowledge that dada or dede is of little use to the business that has already called itself dudu.

    Given their exceptionally strong hand, domain sellers cannot be relied upon to set appropriate prices. Better to rely on an auction, or require seller to accept an offer that would allow domain to be comfortably replaced with one of similar quality.

  4. says

    Hello Michael, and guest commentators!

    First off just let me say, Belly up to the bar boys have another ! As the foundation of our industry is being burned to the F…ing ground !

    We all need to be aware that money velocity drives Markets. Our Market is no different !!

    Great timing on an issue which needs front and center attention !

    With all due respect:

    All of this will mean nothing , if UDRPs and the uncertainty and ease with which Felons can try to steal Virtual Business Fondations from their rightful owners is not Checked.

    Everything we speak of is tied to the secondary markets Valuations , the cash cow engines that supply the catalyst for our Industry.

    The cuurent situation of uncertainty severely impacts and suppresses Secondary Market Valuations!

    Uncertainty in Stock Markets cause Bear Narkets. I think you know the far reaching implications here.

    Time for our Industry leaders to stop being complacent on this issue, don’t you all think?

    How many times does the canary need to show up D.O.A ? Your assets depend on this.

    Gratefully, Jeff Schneider (Contact Group) (Metal Tiger

  5. Lance says

    Very disheartening to know that a generic domain one word domain registered in late 90′s, which undoubtedly has been turned down for many offers probably 6 figures, could be LITERALLY stolen by a company that TM about eight years after. I’m sure other Vanity companies are kicking themselves for not trying this and beyond it I am certain that many now will. The one panel didnt seem to be impartial and didn’t base on facts that were any sense to law.

    “UDRP IT!” Better buy that name its available- the term that will be common as “GOOGLE IT”. Wouldnt mind seeing UDRPIT.com served with a udrp. Fact is anyone can take a roll of the dice but we should, like any other place, write in and show your disbelief and distrust in the system that is current. Send the message to them. BS. If you want to roll the dice, go to Vegas not UDRP!

    Yes this should be appealed. I cant even believe that there was ruling when a court case ruling hasnt come out. Whats worse is this can be used for future case history.

    So if you are wanting to stand together DO SO, dont suggest it, DO IT, and send in your displeasing comments directly or organize to do so. If you let it slip by one can think it can be continued and that no one is watching.

    Price being bad faith on a generic name bad faith. I cant even imagine any points on how they got this ruling. A man landing blow after blow in the ring vs. someone who lands one or two loses to a three person panel of judges still can be an huge upset but one person in a large corporate case is shady at best.

  6. says

    There is something fundamentally wrong with the UDRP process the way it is now.

    Even when the respondent (usually the domainer) is clearly at fault and has infringed on a trademark, the domain is given to one entity who has brought the complaint regardless of how many other people might have trademarks for the same keyword or phrase.

    They should put the domain on auction and notify everyone that has an interest in it, this way people won’t be able to abuse the UDRP process for hijacking domains, because there is no guaranty that it will go to them even if the respondent is at fault.

    Also it is still not clear after all this UDRP cases that we have seen in the past whether domainers have the right to monetize their domains (through parking or other means) or put it for sale, or just keep it unused as an investment as long as they are not directly or intentionally infringing on anyone’s trademark.

    -

  7. says

    Prior to this past week when they made the offer on my Vanity.net domain I had never heard of them.

    I did do a little research on them this week and it looks like they go by eVanity.com for their online sales and their not small accordisayings report saying their yearly revenue is over $100 million per year (which is a little difficult for me to believe) have over 1000 employees and are opening brick n morter stores in malls and might have partnered with cotton inc.

    Rick Weinstein and COO Scott Roller may be the head honchos with Rick being the CEO.

    The Godaddy evaluation for vanity is definitely BS.

  8. Grim says

    Required wrote:

    “The price of one Van Gogh influences the next”
    ====

    So, if the average sale price of a Van Gogh is $40 million, does that mean I can’t price mine at $20 billion? I sure can. And I can price my $800,000 house at $2 million if I want to, as well. (Zillow.com has high “Make Me Move” prices that do just this.)

    No one has the right to say what something is worth, (or simply TAKE it), if the seller doesn’t want to sell it at their price.

  9. I'm blind says

    Can someone please show me the disticntion between the vanity dot com case and this one:

    NAF: Claim Number: FA0503000433802

    The case in which Rick and Howard UNSUCCESSFULLY tried to REVERSE DOMAIN NAME HIJACK the domain name

    VOYUER.COM

    “The Panel is most disturbed by Complainant’s additional submission. The Schwartz declaration is unsupported by any evidence. The Schwartz Declaration contradicts the very trademark application on which Complainant basis its request for relief. And most importantly, Complainant’s analysis of the various domain name decisions contained in its supplemental pleading is, as Respondent points out, confusingly similar. For example, Complainant states that Evans and Southerland v. Real Image, FA 96112 (Nat. Arb. Forum Dec. 18, 2001) was not a case in which the supplemental registration was sufficient. In fact, the panel in Evans & Sutherland found that the evidence demonstrated common law rights in the mark. Common law rights can only arise when a secondary meaning has attached. Complainant mischaracterizes the decision in The Cold War Museum v. Nicolas Jampol, FA96594 (Nat. Arb. Forum Feb. 8, 2001). There, strong evidence had been presented of the acquisition of a secondary meaning by a mark that might otherwise be characterized as merely a generic “name.”

    I hope that when Rick POSTERIZES these guys that he leaves room on the wall for a giant sized self portrait because when the shoe fits…

    Once again Rick shows his true colors with words and actions that are inconsistance with one another

    SHAME SHAME

  10. Required says

    You can price your $800k house at $2m but it will rarely sell, and nor does it matter because whoever might have bought it at $800k will probably find an alternative that meets their needs just as well.

    But an $800 domain can easily sell for $2k or even $20k if the buyer eg. already has a business that exactly matches the .com.

    Owner of a .com domain holds a pretty good monopoly, for now at least. A business can get the .net, add a hyphen or whatever, but may feel it reflects poorly on their credibility if the exact match .com resolves to a parking page. When there are monopolies, market intervention becomes more justified.

  11. Grim says

    Required, if they think adding a hyphen or getting the .net (or whatever) extension of a name reflects poorly on their credibility, that’s too bad, for them. Maybe they should look for another name.

    “Market intervention” in this case isn’t justified, just because life doesn’t seem fair, at times.

  12. BrianWick says

    Brad Mugford –
    “shaming people involved in trying to steal legitimate assets might be far more of a deterrent”

    Maybe it is finally the time to update my 10+ year old antiquated rhetoric on AntiAmericans.com and UglyAmericans.com :)

  13. says

    @ Neil Armstrong

    Do you possibly think that Google.com thinks????? they have De-facto property rughts? This needs to be clarified by ICANN and not just for Domainers but all “Virtual Business Foundation Owners !

    Michael please weigh in on this, I am not a Lawyer.

  14. Limp Wick says

    “Maybe it is finally the time to update my 10+ year old antiquated rhetoric on AntiAmericans.com and UglyAmericans.com ”

    maybe its finally time you adjusted your domain name registration patterns. I mean after losing 12 domain names by way of the udrp, losing court cases and spending 100s of thousands in legal fees (for yourself and others ) and having to pay damages subject to the ACCPA which as I am sure you can recall are set at 100K per incident (you wrote some checks no?) one would think you might have seen the error in your ways. But, change comes slowly I guess, if at all. As you may know insanity is doing the same thing over and over again expecting a different outcome.

    I suppose your intimate knowledge and experience in this area make you somewhat of an expert however the example you’ve set is probably best used as one NOT to follow as opposed to emulating.

    Your history unfortunately makes you part of the problem and the stuff that tm holders are trying now arose partly in response to the bullshit shannanigans of morons like you. Whatever you have to say in response to this is meaningless unfortunately.

    Oh sure, I saw your woe is me gripe site and read your sory tale of how the good ole boys gamed you. LOL. Rick may follow your lead and put up a site like the one you lament on but that site wont change history either and anyone interested in finding the truth will have no problem finding it. Unfortunately the truth is you are a SERIAL CYBERSQUATTER BRIAN WICK

  15. says

    Every UDRP case is different, even if it appears to be similar, e.g. Vanity & SaveMe. I believe I provided enough information back when Mike first posted about the Vanity case, why this web site is not truly developed. Offering it to the tm holders for a million was the cherry on the pie. There are ways to achieve a sale and there are ways to blow it up. The UDRP panels often provide a subjective skew of the law, that cannot predict the outcome based on prior cases. It all comes down to how good your lawyer is. Statistically speaking, a 3-member panel more often decides for the Respondent than the Complainant in non-typosquatting cases.

  16. Anon says

    “Where do I puke, this lone member is on WATCH, time to SEND THE DIRTY ARMY after him… UDRP panel man you are on notice.”

    Real name no good for this one?

    What you said there is exactly the kind of garbage that makes domainers look like a group of mouth breathing idiots. This industry has always had a reputation problem, but 90% of it is well earned by the actions of it’s ‘more visible representatives’. When outsiders look in on blogs like this, they read these kinds of comments, they see people like you confirming the stereotype, it harms everyone.

    This is why domaining always has a problem and always will.
    Because it attracts the lowest caliber people for one reason, right next to higher caliber people for entirely different reasons. Sadly, any entity- be it a person, an individual business or even an entire industry- will always be defined by its lowest point.

    In domaining, our lowest point is below the slime in a butchers dumpster.

  17. Sid says

    domainworth.com, which is MUCH more accurate that estibot, values vanity.com at a range between $1.1 million to $11.7 million. Talk about grand theft.

  18. BrianWick says

    @Limp Wick
    So you agree with the opinion to transfer Vanity.com ? – clearly I would keep your name “Limp Wick” hidden unlike myself who has nothing to hide – took my 6-year old 15 minutes to dig up all that “research” you uncovered that no one ever has seen loser.

    FYI – http://www.ConstitutionalLawyer.com – as antiquated as it is as well – might offer a bit more reasoning as to why the Complainant went after the .COM rather than simply reserving a one of countless NON.COMs.

  19. Overpriced says

    The funniest part of the ruling is the new owner used a GoDaddy appraisal to make a previous offer at $6-10K. LOL. Wow! If GoDaddy appraised the domain right (6-figures), the clothing chain would never have gone after the domain.

    In my opinion, the poor appraisal on a generic name as valuable as Vanity dot com is enough to kill the custom appraisal system in the domain industry. Why order a custom appraisal that claims a super generic is worth $6-10K.

    IMHO, that is why the clothing store took a shot at the domain. What do they have to lose? The owner did not put up a fight like the two previous elite domainers who won their UDRP cases. Live and learn.

  20. Anon says

    The funniest part about blog comments are the people who habitually post under ‘other names’.

    The scariest part is, how anyone other than Berkens could possibly know…

  21. Grim says

    GoDaddy’s “Instant Appraisal,” (which can be found on the AUCTIONS pull-down menu), gives an even lower value. I just did one, and it valued Vanity.com at $802-$1,490.

    Out of curiosity, I valued one of my websites that gets over 500K visitors per month, and it valued it at $172-$517.

    Appraisals are a joke.

  22. Grim says

    @Anon

    Not sure if you’re referring to an earlier reference I made about GoDaddy’s appraisal, that is similar to what Overpriced wrote above, but I can assure you that Overpriced is someone else. (And Berkens would be able to verify that.)

  23. Overpriced says

    @Anon,

    Who cares who is who.

    @Grim,

    Why does it matter?

    @The rest

    The domain industry created this UDRP problem with asking insane prices.

    The main point is that any entity who is rejected in a domain deal should be exempt from filing a UDRP against the domain holder. Their motivation is to get what they can’t acquire the ethical way.

  24. says

    I’m not sure why the $1 million price would matter. VanityShops AKA eVanity decided to put a dictionary word in their company name “vanity” but it doesn’t give them the right to strong arm the owner for the single dictionary word domain vanity.

    If the current owner wants no less than $1 million, who are you or anybody else to say it’s not right? Maybe it was purchased as a piece of their retirement plan, so what!

    If a canned peanut company trademarks the word “heaters” wink wink “hint hint” does that mean they can go after heaters.com in a udrp and gain control of it if the current owner asks $1 million + ? The way it currently looks, yes they could.

    This is like a bad dream for current domain owners and a gold mine for complainants. Surely it will be turned over in Federal court but it’s a shame they have to spend their time and money trying to re-claim their property and then there’s the mental anguish n stress levels that must be through the roof worrying.

  25. Overpriced says

    Developing the website (i.e. Vanity) the right way and or parking it to serve up cosmetic surgery advertisers would have kept this domain out of the hands of a small clothing chain. They are bitter because the owner rejected their 4.5-10K offer. Same reason SaveMe.com got involved in a UDRP case. Coupon owners got rejected for $50K. Knew they would never get a fair deal.

    There is an obvious trend with end-users stealing domains to avoid paying a bundle (IMO). They won’t waste their time taking lower tier domains. However, the end-users will keep an eye on DNS, MWD, and DM to pick and choose.

    The only thing is these domain holders have money to fight cases.

  26. Overpriced says

    “This is like a bad dream for current domain owners and a gold mine for complainants.”

    Only a bad dream for people who lack the money to fight cases and those who own the top domains. Doubt any end-user will go after mediocre domain names or developed websites operating as online companies.

  27. says

    “let me guess the reverse hijackers dont even own vanityclothing.com which i would argue they have more right to than vanity.com”

    That is generic too, and owned or pointed at a parking page – by the 7mile.com guy.

  28. jontollefson says

    jason, bona vee and nat et al: you are all correct. Nelson Diaz was the one panel National Arbitration Forum (NAF) panelist for this decision. Diaz is a crook… literally. See
    http://en.wikipedia.org/wiki/National_Arbitration_Forum
    regarding the corrupt NAF and Minnesota Law Suit. Nelson Diaz corrupt decision in the AirFX case was reversed by the Federal Courts as will happen in Vanity. The NAF needs to be barred from UDRP!!!

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