Domain was purchased in backorder; buyer wins arbitration.
Imagine buying a domain for $166,000 through a backorder only to be hit with a UDRP arbitration dispute a day later.
That’s exactly what happened to Xedoc Holding SA, which bought Shoppers.com at Pool in February. The domain was previously registered at Network Solutions, but was not auctioned at NameJet due to a glitch.
As we reported last month, a UDRP commenced on February 14, 2008 for the domain name. That put Xedoc and its $166,000 purchase at risk.
Xedoc won the case, and now we have all of the juicy details. The complainant was SUPERVALU, Inc, which owns trademarks for groceries and pharmaceuticals for the term “Shoppers”. Essentially it runs a chain of grocery stores.
According to its filings, SUPERVALUE knew of the backorder auction and even participated (but lost). It filed a UDRP and notified Pool.com, but Pool.com let the auction proceed:
At the time Complainant filed its Complaint, Pool.com, Inc. was the owner of the domain name and was holding an auction relating to the domain name. Pool.com was placed on notice of Complainant’s trademark rights to the domain name on February 4, 2008. Additionally, Complainant requested by telephone conversation with Pool.com’s attorney that Pool.com stop the auction so that no third party would obtain the domain name. Pool.com was not making a legitimate, noncommercial use of the domain name
. Pool.com intentionally allowed third parties to bid on the domain name despite the fact that the domain name is subject to federal trademark registrations. Moreover, Pool.com auctioned the domain name to the highest bidder, which cannot be considered a legitimate use and is indicative of bad faith. Pool.com failed to stop the auction, and awarded the domain name to Respondent on February 5, 2008. Respondent obtained the domain name on February 5, 2008, through the Pool.com auction.
Xedoc pointed out that SUPERVALUE was aware of the auction and submitted to Pool’s terms and conditions of the auction and thus the validity of the auction.
In the end, reason prevailed. The panel found that SUPERVALUE has a trademark to Shoppers for only its limited use, the domain was being used legitimately, and it was not registered in bad faith.
The panel looked at the final sale price as proof that the domain name is a generic term with wide use:
Involved here is a common, descriptive word. It is not, in fact, associated by most people in the English-speaking world with the trademark of a regional US grocery chain. This domain name is worth $166,000 at auction precisely because it is a popular generic term with commercial connotations.
So what happened here? A business wanted a domain name. When bidding got too high, it decided to go with plan B: file a frivolous complaint under UDRP to steal the domain. It may not meet the standard definition of reverse domain name hijacking, but it certainly appears to be the case.