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04|12|2008 09:29 pm EDT

WebMagic Keeps After Dispute

by Chad Kettner in Categories: Legal Issues

ACE Limited, an insurance company, made an attempt to take the domain name away from WebMagic Ventures, citing trademark infringement as it’s primary reason. The issue was taken to the National Arbitration Forum and denied due to several shortcomings in ACE Limited’s dispute.

This case not only unique because of the value of the domain, but also due to atrocious claims made by ACE Limited.

After repeatedly trying to buy the name from WebMagic Ventures, ACE Limited attempted to gain ownership of the domain through arbitration.

ICANN’s Uniform Domain Name Dispute Resolution Policy (UDRP) clearly states that three elements must be proven in order for a dispute to go through:

  1. your domain name is identical or confusingly similar to a trademark or service mark in which the complainant has rights; and
  2. you have no rights or legitimate interests in respect of the domain name; and
  3. your domain name has been registered and is being used in bad faith.

ACE Limited tried to challenge all three points of ICANN’s policy, arguing that…

  1. is confusingly similar to their ACE trademark,
  2. WebMagic Ventures is simply using a template for their landing page and has no interest in developing the domain,
  3. and was registered in bad faith.

ACE Limited argued that since they had used the name “ACE” for over 20 years and had trademarked the name in 2003, the domain name could be confused for their company. The panel agreed that is identical to the trademarked name, but that’s all ACE Limited had going for it in this dispute.

ACE Limited went on to assert that WebMagic Ventures was cybersquatting, stating: “The parking page template was created by Respondent for the dubious purpose of cybersquatting to generate click through revenue and to ultimately sell the domain for profit.”

While they claimed that WebMagic’s only purpose for owning the domain was to resell it, they hid from the panel the fact that they had tried to purchase it in the past – including an offer of $450,000 – but were not entertained by WebMagic Ventures who clearly stated they were not interested in selling.

The panel found ACE Limited’s accusations of cybersquatting easy to debunk, going on to say that buying and selling large amounts of domain names isn’t enough evidence for such a claim.

“Complainant characterizes Respondent’s business as cybersquatting. The Panel finds otherwise… Even if Complainant’s aversion that Respondent engages in a clear pattern and practice of trading in domain names might suggest some nefarious purpose and imply a similar purpose in the registration and use of the at-issue domain name, such evidence is in no way conclusive. In the instant case, there is clear evidence that while Complainant tried on multiple occasions to purchase the at-issue domain name from Respondent that Respondent repeatedly declined to bargain even in the face of Complainant’s sizable offers. Importantly, there is no per se proscription against buying and selling domain names. While such activities may be indicative of cybersquatting, without more they are in no way sufficient to prove cybersquatting or an improper purpose on the part of Respondent.”

While WebMagic Ventures owns thousands of domain names, their case was made stronger by their rich history of building successful online businesses.

“[WebMagic Ventures] created and operated, which after obtaining half the online marketplace in the U.S. for mail order toys and nearly all the market share in more than 20 other countries, merged with eToys. Respondent created the famous NASDAQ-listed company, whose logo was seen in Super Bowl ads, Macy’s parades and branded merchandise.”

Lastly, ACE Limited contended that WebMagic Ventures (who later trademarked “Auction Ace”) registered the domain in bad faith, but it is clear that the domain was registered over a year before ACE Limited attempted to trademark the term in 1999 – making it impossible for WebMagic Ventures to have knowingly acted in bad faith.

Since ACE Limited could not prove all three of ICANN’s required factors, their dispute was denied.

Although WebMagic Ventures won the dispute, the panel did not agree with their request to find that ACE Limited had engaged in reverse domain name hijacking. The company does indeed have limited rights to “ACE” and had reasonable believe that WebMagic Ventures may have acted in bad faith, although it was later proven false.

Nonetheless – whether this is officially considered reverse domain name hijacking or not – ACE Limited’s actions are appalling and a slap in the face to every domainer.

[National Arbitration Forum – Full Decision]
[Domain Name Wire – “ Owner Wins Arbitration“]


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