As someone who has been investing in domain names for over ten years now, I have tried to keep a close eye on UDRP decisions. Many people liken the domain name world to the Wild West but it’s important to remember that there are defined rules and regulations which, uh, the Wild West didn’t exactly have.
The UDRP process, and the decisions that are made through this process sets the standard by which all of us, as investors need to know, and well, to avoid losing domains that we buy as investments. In general the UDRP process is designed to prevent people from buying domains in bad faith to essentially extort trademark holders. While occasionally there are decisions that seemed to be biased on one side or the other, this process has generally done a decent job of protecting businesses and trademark holders and domain investors all at the same time.
That being said, like many legal decisions, future outcomes are heavily impacted by prior actions. Just like we’ve seen major court decisions set the standard for hundreds or thousands of cases to follow, the same is true of the UDRP process.
A recent UDRP decision was brought to my attention by the ICA, and honestly, it’s a scary one. If this sets a precedent it honestly could make it very challenging to invest in domain names going forward. Elliot Silver, author of popular Domaining blog DomainInvesting.com covered this controversial decision, here’s the gist of it:
“Respondent’s apparent belief at the time it registered <devex.org> that someone, at some time in the future, might cultivate trademark rights in DEVEX which Respondent could then exploit obviates any requirement that to succeed under the UDRP the respondent must have contemplated a particular trademark holder and/or a particular trademark.” (Source – DomainInvesting.com)
What this decision essentially said is that if you buy a domain name and years later someone decides, “hey I want to use that domain for my business but I don’t want to pay you for it” they could just get a Trademark and – poof – the UDRP process would give them the name. This is scary, really scary.
The ICA has issued a statement on CircleID that’s definitely worth reading and hopefully will help prevent this specific UDRP decision from setting a new standard. Still, the fact that this happened could send ripples through the domain investing world for years to come and honestly could change the dynamics of the entire industry forever.
Yes, I know what you’re thinking now. Morgan – you’re being overly dramatic, it’s just one lousy decision. To which I would say, think how you would feel if you invested in a name, maybe you bought it in a NamesCon auction for $50,000. You get offers on it over the years but nothing that matches what you think it’s worth.
Then one day, someone spends a few thousand dollars to a secure a trademark, files a UDRP, and now the domain is theirs. We can’t let that happen, and I am incredibly thankful to the ICA for speaking up and making sure that a decision like this doesn’t happen without bringing to light how massively the UDRP process has failed in this specific case.
Now only time will tell if this is remembered as one bad decision, or used as a basis for thousands of future decisions…