Early bidders will earn cash back.

Francois Carrillo, the guy behind Domaining.com, is getting ready to launch a new cash back program for bidding on his CAX.com domain marketplace.

The program will reward both the initial bidder in an auction and the second highest bidder with 2% of the sales price.

For example, if you are the first bidder and three people bid in an auction but you don’t win, you’ll get 2% of the sales price.

If you’re the first bidder in an auction that only attracts two total bidders, you’ll actually get 4% — 2% for being the first bidder and 2% for having the second highest bid. On a $1,000 sale this would mean $40.

If you’re the only bidder for a domain you’ll get 2% cash back since you were the first bidder.

The money is taken from CAX.com’s commission, not the sellers proceeds.

When I first heard of this deal I thought people would try bidding to earn money and walk away if they actually one. But CAX.com charges a one time membership fee that should reduce the incentive for people to do this.

The announcement about the cash back bidding is on a great domain in itself: Everytime.com.

The promotion begins July 4. Since Francois is French, I don’t think the timing has anything to do with the U.S.’s Independence Day holiday.

Australian company uses UDRP in bad faith.

I’m kind of upset lately over panels not finding reverse domain name hijacking, so let me applaud the three person panel in a case over Futuris.com.

The panel found Australia-based Futuris Automotive Interiors guilty of reverse domain name hijacking.

Even more shocking: Andrew Christie was a member of the panel.

Futuris Automotive Interiors certainly has trademarks for Futuris, but for the automotive industry. The issue here was that it had full knowledge that the respondent didn’t register the domain in bad faith.

Respondent X9 registered the domain name 17 years ago in 1994 when it was called Futuris Networks, Inc. The complainant was well aware of that and alluded to the business in correspondence sent to X9.

After receiving no response to the correspondence, Futuris Automotive Interiors filed the complaint.

The three person panel wrote:

The Complainant made two principal assertions regarding bad faith: (i) that the Respondent registered the disputed domain name primarily for the purpose of disrupting the business of the Complainant; and (ii) that the Respondent registered the disputed domain name primarily in order to prevent the Complainant and/or the Complainant’s parent company from reflecting the mark FUTURIS in a corresponding domain name.

As the evidence provided by the Complainant itself showed, however, neither of these assertions had any basis in fact….

…it is clear to the Panel that the Complainant knew or ought to have known that the Respondent’s registration and use of the disputed domain name could not, under any fair interpretation of the reasonably available facts, have constituted registration and use in bad faith. The Panel therefore finds that the Complaint was brought in bad faith and constitutes an abuse of the administrative proceeding.

As a quick note to domain owners, the respondent may have been able to avoid this UDRP by responding to the complainant’s inquiries about the domain. Of course the complainant could have tried to use any response against it in a UDRP as well. It’s a double-edged sword.

WIPO panelist doesn’t bother to consider a sure-fire reverse domain name hijacking claim.

I realize UDRP panelists aren’t paid much to handle cases, but there must be a minimum standard here.

Why the frustration? Take a look at the recently decided case for Cite.com.

The owner of the domain name registered it in 1997 and started a business called Cité Consulting. The complainant Systemware, Inc. didn’t start using the term “CITE” in commerce until 2011.

I understand that Systemware may not have been aware that the domain owner had a consulting company using the domain name. But the 14 year difference between his registration and the company’s first use of the term is enough to make this case a complete joke.

The respondent rightfully asked for a finding of reverse domain name hijacking.

But in one of the shortest UDRP decisions I’ve ever read, panelist Christopher J. Pibus didn’t even bother to consider RDNH.

Update: I have received a copy of the original complaint. Systemware’s lawyers cited Telstra v. Nuclear Marshmallows as rationale for how the domain could have been registered in bad faith if used later in bad faith. Also, the owner of the domain name belatedly discovered that the lawyers had sent an email inquiring about purchasing the domain, although he missed the email originally.

Amazon registers domain name flouting recent Consumer Reports rankings.

Earlier this month Consumer Reports released updated eBook reader ratings, declaring “Nook beats Kindle“.

That certainly didn’t go well with Jeff Bezos.

So the company just registered the domain name KindleBeatsNook.com.

When it comes to domain names, perhaps Consumer Reports should give Amazon a higher rating than Barnes & Noble. After all, no one (yet) has registered NookBeatsKindle.com. And no, I don’t think this is a trademark issue on a domain like this.

I’m not a fan of Consumer Reports’ ratings when it comes to newer gadgets, so I’ll stick to my Kindle…which I often times access via my iPad anyway.

KindleBeatsNook.com does not currently resolve.

Amazon cans its California affiliates. California loses, affiliates lose. It’s time for a bigger discussion.

Yesterday a couple California readers forwarded a message from Amazon.com saying that, should their governor sign in to law a new so-called “affiliate tax”, their participation in the Amazon Associated program would be terminated.

Hours later they received a message saying the bill was signed and they’ve been kicked out of the program.

I’ve written about the affiliate tax many times. Here’s the idea:

1. State wants to raise more money
2. It’s upset about missing out on sales tax from online purchases
3. Creates a law saying that a web site’s affiliate marketers represent a sales force, so the site has a “nexus” in the state.
4. This allows them to force the e-tailer to collect sales tax on purchases.

Except that it doesn’t work. It ends up being a lose-lose. As you see in this case, Amazon has decided to fire its affiliates instead of collect the sales tax. That means not only does California not get the sales tax it wants, but its citizens’ income goes down. With a hefty income tax of nearly 10%, that means California will actually get less revenue now that it has passed this law.

It gets worse. A lot of people are going to lose their jobs. They work for companies that get a lot of their income through affiliate programs. Heck, one of the biggest affiliate program networks, CommissionJunction, is located in California.

California tried to pass a similar law before, but then-Governor Arnold Schwarzenegger vetoed the bill.

This isn’t new. Amazon has fired its Colorado affiliates and North Carolina affiliates. Instead of firing its New York affiliates it is challenging the law there.

We had a related scuffle here in Texas. A newspaper reporter in Dallas noticed wrote about an Amazon.com flag flying outside a distribution center in the area and asked why Amazon wasn’t collecting sales tax on Texas purchases.

The Texas comptroller ended up sending a $269 million bill to Amazon for uncollected sales tax.

Fine, said Amazon: we’ll just close down the distribution center and fire all the employees.

So Governor Rick Perry, not one to like seeing jobs lost, said he disagreed with how the comptroller handled the situation. Then Amazon decided to try making something out of it by saying it would bring thousands of jobs to Texas if it wasn’t forced to collect sales tax.

You see what’s going on here? It’s like the economic incentive packages that cities and states dole out to attract business.

The “affiliate tax” is a bad idea for the reasons I’ve explained above. At the same time, it’s not fair to companies like Best Buy and Barnes & Noble that they have to collect sales taxes, even on online sales, when Amazon.com doesn’t have to.

The guidelines companies work with today were created in a catalog world. We’re in an internet world now.

It’s time for a national discussion on sales tax.