Did Stands4 buy a hot domain?
A dispute over the domain name Calculator.com is getting messy, and I calculate that someone is going to lose a lot of money.
Chloe Tsakiris Alston filed a lawsuit in Florida court after discovering that the Calculator.com domain name was no longer in her control. She says that she and her father are the original registrants of the domain.
The judge in the case approved a Temporary Restraining Order to transfer the domain name back to Alston’s domain name registrar.
Now the “current” owner of the domain is fighting back, saying that it bought the domain from Alston.
Stands4 LTD, which operates Grammar.com, Lyrics.com and Scripts.com, says (pdf) that it bought the domain from Alston for $180,000 last month through DAN.com. The company says that DAN.com reviewed Alston’s passport and utility bill and compared this information against Whois before approving the transaction.
The company then spent $50,000 launching a new site on Calculator.com.
Alston disputes (pdf) that she agreed to sell the domain name.
There’s certainly something weird going on. The seller agreement from when the domain “sold” on Sedo listed another party, which raises alarm bells. And it doesn’t make sense that Alston would sue after selling the domain.
Which is all to say that this case is going to get messy. It certainly doesn’t seem that a Temporary Restraining Order makes sense. (Stands4 is asking the court to reverse it.)
I also don’t see how the case will remain in Florida. The initial filing there didn’t make sense; none of the parties are based there. The only reason I can see for it being filed in Florida is that the Plaintiff hired an attorney there who successfully got a stolen domain back for another company through a Temporary Restraining Order.
Alston’s lawyers made a somewhat amusing argument for keeping the case there, including that ads on Stands4’s website are geo-targeted to visitors from Florida…when someone visits from Florida.
David Weslow of Wiley Rein is working with a Florida attorney on behalf of Stands4.
Stay tuned.
That’s why you need to trademark your .coms.
You’ll always win.
Especially if you sell it on some shady exchange (like a forum).
Use crypto too…see how that works them in court!
Like the old trick of drilling a hole in your coin; tie a string, drop it in a machine. Yoink!
Really, only need to get away with it ONCE. Then you’re set for life.
(Not advice)
As an attorney who has litigated cases involving domain names and trademarks in federal court, I will not be surprised if the judge assigned to the case asks questions regarding the conflicting sworn affidavits on file. Additionally, there is case law that provides guidance on whether using the internet to operate a website to target consumers in a state meets the minimum contacts test established by the U.S. Supreme Court in International Shoe Co. v. State of Washington (1945).
If I was the owner of the website and spent $50,000 on launching that site I would fire the website designer and insist on my money back. The site does not even have a SSL certificate, which tells me someone is telling porkies.
It has been reverted back to the previous owner’s website already.
so someone was pretending to be Alston forged documents and sent then to DAN.
That’s possible.
Not a shocker if the case, more than possible it appears. I have seen people go to lengths even the largest criminal organizations in the world won’t to “prove” they bought it from the previous owner. One of those individuals went to jail. If I recall a Paypal needed to be contacted directly to disprove a receipt. Someone forging ID and DAN.com being tricked is not even that complex. However and this is a question I would have….
Did DAN.com merely compare WHOIS Andrew or did they at the least do some leg work in making a call or sending an email to whois history contact info to be sure a 6 figure trade was on the up and up?
Think about this for a moment. Assuming a wise thief would change some whois info like email or phone on docs sent to DAN if they called/contacted that still does not excuse DAN.com not going back like any good domainer would. If that one bit of due diligence was done would this even be a story?
After nearly 15 years of chasing domain thieves and getting names returned it never fails that a human element is a common exploit.
Nothing is 100% safe.
Dan.com said they were “100% sure”.
Holy Moly! (just sayin’ 🙂
“Dan.com has advised Stands4 that it is ‘100% sure that Chloe owned the domain at the time of the transaction and that we were dealing with her. She explicitly authorized this transaction as well.'”
Who knew that Dan.com provided title warranties?
Very true John, I like the way you think.
I wonder what the legal threshold would be to make such statements. I suspect the answer to that question is in the details, like having liability insurance of some sort.
Not sure how this will end but the buyer and or the victims are certainly going to be looking for monetary compensation should either fail to be victorious. As the broker who was 100% sure you really cannot hope either side wins.
Andrew, have you asked DAN.com if they have a policy in place for verifying ownership and is that something they would share publicly? Long shot but thought Id ask. I imagine if smart about it they would function simply like Escrow.com, never used DAN.com so unsure how hey operate or hold themselves out to the community in the handling of trades.
“unsure how hey operate or hold themselves out to the community in the handling of trades.”
Well, it seems in this one they held themselves out as warranting title. So, the buyer will have recourse against Dan.com if they lose the domain name. I don’t know about them, but many states require lawyers to have a set minimum of liability insurance.
Being “100% sure” of something is pretty impressive in this business.
This case smells a lot like Express Media Group, LLC, et al. v. Express Corporation. In that case, the domain purchaser had conducted a very long and extensive email correspondence with the seller. When the seller claimed the domain name to have been stolen, neither the domain registrant nor any of his attorneys believed a word of it. She confirmed that was her email address, and that she used that email address on a regular basis during the weeks over which the negotiation was conducted.
In that case, and in another situation of which I am aware that was privately resolved, the domain hi-jacker had obtained access to the email account which was tied to the registrar account. The hi-jacker was able to immediately remove (or had a script of some kind) relevant inbound email messages from the account inbox in order not to alert the account owner to the back-and-forth communications being conducted to negotiate the sale using the email account in question.
Sometimes, you run into some truly unexpected facts.
The notion that someone would have the moxie to sell a domain name for $500,000, and then go to federal court claiming theft, on the proposition that someone able to buy a domain name for $500,000 wouldn’t show up in court and expose the fraud, seems a bit far fetched. One would normally assume that anyone able to pay that much for a domain name is also going to survive a couple of rounds of litigation. Given the flimsy jurisdictional position of the plaintiff, then one wonders why any of thousands of lawyers in more appropriate jurisdictions were somehow less suitable to the plaintiff than the firm chosen here.
But, come what may, if the defendant relied on Dan.com being “100% sure”, then it will be interesting to see if they stand behind that warranty.
John, does the judge give leniency to the Plaintiff on jurisdiction questions at this point in the case? In the decision on vacating the TRO, the judge seemed to be very generous.
Jurisdiction in federal courts must be proven, and is not assumed. There is no presumption in favor of finding jurisdiction.
That said, the targeted advertising argument is interesting.
The better argument, if you want to stay in Florida, is that the name was allegedly stolen from Network Solutions (although that puts one in the Middle District of Florida instead of the Southern District).
Thank you for your answer John and of course your time in educating us all.