By Steve Levy
Does the good faith registration and use of a domain name carry over to someone who buys that domain name from the original owner? Legal contracts of sale often include a clause saying that the buyer acquires all “right, title, and interest” in the item being sold. If that item is something intangible, like a trademark or a patent, the buyer may gain all of the benefits of that asset going back to its initial creation by the seller. This can be of great value if the buyer ever faces a dispute with someone that dates back to a time before they buyer purchased the asset.
However, this is not usually the case with domain names. Most domain name sales happen through registrar auctions and without any written contract between the seller and buyer. Sometimes the domain name simply expires and is picked up by someone with no relationship or even knowledge of the prior owner. The rare exception is where a domain name is transferred to a person or a company that has an ongoing business relationship with the former owner, such as a merger of companies, or where the former domain name owner is personally involved with the company acquiring the domain name.
In a recent UDRP decision, the Respondent unsuccessfully claimed the benefit of supposed good faith registration and use of a domain name by its former owner. The disputed domain name was originally owned by the Complainant’s founder and former Director who was engaged in unspecified litigation with the Complainant. However, the former Director then transferred the domain name to another person, the present Respondent, who eventually used it to publish a website claiming to solicit creditors of the Complainant to join a potential lawsuit. While this would arguably be a legitimate use of the domain name, the Complainant pointed out that the Respondent provided incomplete and possibly false contact details, the site failed to identify any law firms or provide any contact information, and is more likely engaged in phishing activity as visitors are asked to submit the email, ID, and other sensitive information for their registered accounts with the Complainant.
The Respondent asserted that its purchase of the disputed domain name from the Complainant’s former Director gives rise to a legitimate interest by its acquisition via a chain of title. However, the panel found that this argument is misplaced under the UDRP. Since there is no evidence of an ongoing business relationship between the former Director and the Respondent, the transfer of the domain name creates a new “registration” and does not provide the Respondent with any of the rights or legitimate interests that the former Director may have held or the benefit of any good faith registration or use the Director may have made. It also found that the current website did not appear to be a legitimate solicitation of the Complainant’s creditors but was more likely a phishing site.
When brand owners are considering a UDRP case against a domain name, it’s helpful to explore when the domain was acquired by the current registrant and whether there may be any ongoing relationship with a former owner of the domain name. This can help assess the likely success of the claim and, if the current owner acquired the domain name without any connection to a prior owner, that can increase the chances of winning a case, especially if the domain is now being used to target the Complainant’s brand in bad faith.