In what could be one of the most important legal decisions of the year for domain holders, the US District Court for the Eastern District of Virginia ruled that a domainer hold acquired common-law trademark rights by simple ownership and usage in domain names he owned, even though they corresponded to well-known trademarked brand names.
The ruling for domain holders is a result of a default judgment.
Here’s the deal.
Warren Weitzman, is a domainer who owns and parks some 12,000 domain names.
He filed suit against his registrar, Lead Networks, over 22 domain names, 21 of which were .com’s.
Lead Networks is located in India.
He filed the case in Virgina claimed in rem jurisidication against .com registry and the .org registry under the Anti-cybersquatting Consumer Protection Act (ACPA).
He claimed that the domain names were “extremely valuable earning in excess of $2,000 a month from parking and were worth in excess of $2,000,000”.
In his complaint he alledged that the registrar had “taken control of his domains” and was in fact parking the domain names themselves.
It is not clear from the complaint why the domains were “taken” by the registrar so I guess anything is possible including for non-payment of renewal fees,” or taking them because they violated there terms of service.
Unfortunately because the complaint is silent as the reason of why the domains were taken and since the registrar never answered the complaint, there is simply no information in the court record on this.
The domainer simply alleged that the registrar took control of his property and was now parking his domains and making the money he used to make and asked the court to award him the domains back.
From the complaint:
“Weitzman through the use of the subject marks in commerce for many years has common law rights in the subject marks”
“Lead Networks is in violation of his rights”
“Weitzman property entered into contract with his registrar, is the owner of each of the domain names and used each domain in a lawful manner”
The court upon not receving an answer from the defendant regsitrar order VeriSign and PIR the .Org registry to transfer the domains back to the domain holder.
In effect, Weitzman had succeeded in arguing that his disputed names had earned common-law rights.
The issue that has the trademark groups all hot and bothered is that some of the domain at issue were typos of famous trademarks.
The domains at issue were
belis.com
epsun.com
helmsley.com
pirreli.com
vespas.com
gunit.com
reabok.com
redroof.org
daffy.com
fivebars.com
mascaron.com
livs.com
oncologics.com
profesia.com
remolacha.com
satz.com
sunlet.com
Vitallium.com
zire.com
For me the case raises a lot of questions.
Why were the domains taken by the registrar?
Why did an ICANN accredited registrar fail to respond to a lawsuit filed in federal court?
Does such action disqualify a registrar from being accredited and if not, why not?
How could these set of domains generated $2k a month parked and based on the set of 22, who valued them at $2 million dollars?
I believe that Lead Networks accreditation was not renewed last year and they were placed into receivership earlier this year. That may have something to do with why there was no response.
Kellie
Ok that answers some of my questions
thanks
The Ugland House looks like an upscale hotel, an angular, colorful building just blocks from the spectacular beaches of Grand Cayman.
But to Barack Obama, it is nothing more than a flophouse for thieves and cheats.
“You’ve got a building in the Cayman Islands that supposedly houses 12,000 corporations,” he said during a Jan. 5, 2008, debate in Manchester, N.H. “That’s either the biggest building or the biggest tax scam on record.”
good for us. god bless us all… everyone.
Interesting news, but will a default judgment really lead to any solid precedent for domainers? My thinking is no. Nonetheless, it’s nice to read about a little victory like this.
Registerfly deaja Vu …
At the request of the receiver appointed by the United States District Court for the Central District of California in the action titled Verizon California Inc., et al v. Lead Networks Domains Private Limited et al, ICANN has agreed to terminate the Lead Networks accreditation effective 19 August 2010.
Lead Networks will no longer be permitted to register or manage gTLD registrations once the termination becomes effective.
In order to promote the community interest
=====
ICANN accredited LOGO ..STILL UP on top,
looks like site is still resolving ….
Seems like they are still OPEN
for more monkey business > leadnetworks.com
If these names were making money we all know why.
This case reminds me of the case of the drug dealer who called the cops to tell them he was robbed and his stash was stolen.
Even if this guy got his domain name backs through an In Rem procedure he best be prepared to show how he has any common law rights in brand names that have been in existence years before the Internet. Apparently, Verizon sued him and others under ACPA but the case seems to be in the process of settling. Guess who the registrar was?
A little Birdie told me it was … Net…. Sol……. 🙂
“brand names that have been in existence years before the Internet”
names such as FrontierLand?
does Davy Crockett still own that one ?
“Zynga rides social wave with new CityVille game”
Computerworld
“Online gaming firm Zynga has made a name for itself by enabling Facebook users to grow crops, build criminal empires and clear frontierland.”
“Weitzman through the use of the subject marks in commerce for many years has common law rights in the subject marks”
Yeah, sure you do: Helmsley, G Unit, Vespa, Reebok, Red Roof…all your brands
Hey the court entered the judgment giving him back the domains
poetic justice at it’s best…
for all the reverse hijack attempts…
He fought this one for a long time… it happened at the same time he suffered another major theft, I believe out of Enom accounts … a case for true forensics.
Beware of Outsourcing abroad…. for what I understand.
(Funny for some people the USA might be their “abroad”)
MHB, that’s because no one contested it, wasn’t it a ruling by default?
Now Reebok etc might just knock on his door and ask for the names, profits made and $100K
Not sure that this would change anything for him under a UDRP proceeding. Hey may be able to point to the default judgment and say “I got rights!” but are they legitimate? Typo squatting on trademarks? Probably not. Still, interesting decision.