A dispute over IMI.com led to a jury trial with what many would see as an obvious verdict.
In 2017, concrete company Irving Materials, Inc. filed a cybersquatting claim under the Uniform Domain Name Dispute Resolution Policy (UDRP) to get the domain name IMI.com. The domain owner didn’t respond, but it was still surprising that Irving won the case given that it was easy to determine the domain owner had rights or legitimate interests in the domain.
Jeffery Black, the owner of IMI.com, subsequently sued Irving to block the transfer of the domain name. The court challenge went all the way to a jury trial, and the jury determined that Black did not violate the AntiCybersquatting Consumer Protection Act (ACPA).
The judge just issued a report affirming the jury’s verdict and outlining what happened in the case. It gives an overview of the story from when Black registered the domain in 1994, to Irving Material’s attempts to get the domain name.
Black registered IMI.com in March of 1994. One month later, he incorporated an entity named Internet Marketing Inc (IMI).
He created a business as IMI that was quite successful. He tried collaborating with Yahoo founder Jerry Yang. Yang wrote an email to Black stating:
To summarize, we are impressed by the resource and talent pool that IMI has pulled together. We share much of the vision that IMI does, and see a good potential fit. Of concern to us is the relative worth of Yahoo, the amount of resources Yahoo will receive from IMI in the short run and long run, the autonomy of Yahoo (both short and long term), and the pace at which things will be accomplished.
Black later took venture capital money for IMI and rolled it into another entity. He sold that company to AltaVista for $25M, but was allowed to keep the IMI.com domain.
IMI.com was not the only great domain Black registered back then. According to the transcript, he also registered “hiking, biking, scuba, tennis, recreation, hotels.com, [and] resorts.com.”
For hotels.com, Black built a booking reservation system complete with maps, and hand coded over 40,000 hotels into the database. Black ultimately sold resorts.com in 1999 for $950,000 and
hotels.com in 2001 for $11 million. He gave many of the other domains away for free.
Irving Material’s Overture
Irving Materials tried to acquired the IMI.com domain name in 1998. Here, the two sides disagree about the course of discussions.
According to Black, Irving offered to buy the domain for $500. He responded:
I said, I’m sorry. Hold on. Let me explain something here. My business is called Internet Marketing, Inc. It’s still running. I’m the biggest spider in the world for what I do. I track more
data than anybody else in the world as a data aggregator. $500 isn’t going to cut it.
Black says he calculated what it would cost to change over everything on the website, and it was $126,800. He said he wouldn’t consider anything les than $135,000 for thedomain.
Jerry Howard, Irving’s VP of IT, testified that he never offered to purchase the domain for $500, but instead offered $5,000 and then $10,000, and that black told him he’d turned down offers of $100k.
Black said that Irving refused the $135,000 offer price, repeated the $500 offer and threatened to sue for trademark infringement. It even sent him a draft complaint of a lawsuit it intended to file. Black hired lawyers and Irving never filed the lawsuit.
Because Black was able to keep the IMI.com domain name after the sale to AltaVista, he receive inbound offers for the domain. He said that between 2000-2002 he received offers of $2-$4 million for the domain.
Getting With the Times
Black didn’t hear from Irving Materials again for about two decades.
In 2014, Irving developed a new marketing and branding strategy under VP of Sales and Marketing, Jeffrey McPherson. It also hired an an ad firm called Heavyweights.
A lot had changed online since the late 90s, and Irving Materials wanted to get with the times. It wanted to upgrade its domain name to IMI.com again.
According to the judge’s report, when asked “between 1998 and 2017, why did Irving not say a word to Black about his registration and use of the [imi.com] domain name?,” McPherson responded:
…different strategy we have right now after going through the research and things of that nature that we’ve gone through. And also the way the website, social media apps and everything interact[s] with one another, it’s my job to make sure our brand is consistent throughout our footprint, consistent throughout the country, consistent everywhere we operate.
The dialogue continued:
Q. So you’re saying because the internet got bigger, it made it more important for you to have Mr. Black’s property as your own?
A. I’m not saying the internet. I’m saying marketing and branding in general to begin with. Branding is what people remember when the marketing stops.
Q. I’m asking you to explain all reasons that Irving Materials did not reassert its cybersquatting claim from 1998 for 19 years.
A. I would say the biggest reason would be the research that I did when I first got the Vice-President of Sales and Marketing role. And also the other thing is, when did the
UDRP start? We didn’t have any way of doing anything.
Q. Are you aware the UDRP went into effect in the year 2000, Mr. McPherson?
A. I am now.
McPherson said that Heavyweights told him he could hire an attorney and file a UDRP against IMI.com. Irving did.
Black didn’t respond to the UDRP, perhaps because he wasn’t aware of it until it was too late. Panelist Neil Anthony Brown, who often finds reverse domain name hijacking on behalf of Respondents, surprisingly found in Irving Material’s favor. That led to the lawsuit and verdict.
A verdict that is in line with what anyone who studies ACPA and UDRP could have told you a long time ago: It’s clear that Black didn’t register the domain name in bad faith to target Irving Materials.