A recent court case does little to settle the “re-registration” question.
A Court of Appeals decision last month widened the gulf between different U.S. circuits on a critical question in finding bad faith under the Anticybersquatting Consumer Protection Act (ACPA): when the domain was registered. Or “re-registered”, as it were. On today’s show Ben Barlow, the lawyer who represented the owner of pru.com, discusses what the court decided and the impact it could have on domain name owners.
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Hopefully the original owner of PRU.com will push this case to the U.S. Supreme Court.
The domain industry has reached the point where a decision needs to be made to align all courts on the property status of domain names.
I would suggest domainers move any highly valued domains away from ANY registrar located within the 4th Circuit jurisdiction.
It is the job of SCOTUS to end the confusion.
Question for the legal experts.
PRU.com was purchased from SEDO on 17 October 2017, and the registrar was GoDaddy (Arizona). But (.com) registry is Verisign (Virginia) where 4th Circuit COA rules on cases.
Did the domain registrant have RIGHT to request the case be decided in the 9th Circuit where GoDaddy is located, or were they required to submit to 4th Circuit jurisdiction?
Either way, this ‘re-registration judicial activism’ could completely upend domain investing if this judicial activism spreads to other circuits.
Moving forward, auction platforms like GoDaddy, Sedo, etc. would seem to be at-risk of lawsuit without adding some sort of disclaimer about this ‘re-registration’ precedent.
If registrant PAID $100K for ,PRU.com, how do auction platforms avoid incurring punishment or reparation for allowing these sales and retaining commissions?
This is easily one of the more important recent cases after France .com. Much more discussion is needed on the repercussions of this terrible 4th circuit ruling.
Everyone asks, will domain investing be replaced by some new technology in the near future?
Maybe that’s the wrong question.
The biggest threat to domain investing my not be Silicon Valley innovation, but the Courts of the World.
This PRU .com ruling has done more damage to domain investor rights than any recent Internet technology has done over the last decade.
The biggest threat to domain investors is no longer the tech entrepreneurs, but the Courts.
Ben Barlow says
Jurisdiction in the Eastern District was challenged but the Court determined it was the proper place to determine the issue – the Fourth Circuit Court of Appeals agreed (unfortunately)
Thanks for this clarification.
The 4th Circuit is undermining domainers ability to purchase auction domains.
This ruling needs to be overturned, and I hope your client exhausts all appeals. Probably the 2nd worst decision over last 5 years I’ve noted, France .com being #1.
Would like to see how U.S. Supreme Court would rule on ‘re-registration’ question. If not PRU.com, there will be another test case to reach 4th circuit on the issue soon.
Ben Barlow says
I would definitely be interested in speaking to anyone who feels they have a case. I agree with you on the rulings – but admittedly I am a bit biased
I will share your invitation with others.
However, there was an article written by U of South Carolina Law Professor Ned Snow (2005) raises serious constitutional questions about the ACPA.
Ned Snows arguments are more important now than ever, and provide a legal theory to protentional test cases. I’m stunned Domainers, bloggers and domain legal experts have done so little to reach out to Professor Snow.
In fact, cases like PRU .com were bound to happen as the values of dot-Com domains a recognized necessity to TM holders.
The re-registration question must be answered by SCOTUS, we are only one test case away from finality on this question.
EVERY serious domain investor should want to see PRU .com decision overturned immediately.
In the 9th Circuit, PRU .com owner would have won, this case must reach the SCOTUS by Writ to end the circuit court confusion.
Has your client decided to move forward and appeal to SCOTUS or are they conceding to Prudential?
I re-read this case, and checked a counter analysis from Wiley Law. They seem confident they’ll be able to use this 4th Circuit ‘reregistration’ precedent to win cases against good faith sellers and buyers moving forward.
At a minimum, there will be another PRU.com case hitting the docket sooner than later.
Walking away from a $100K investment on the perfect test case would be a double blow.
PRU.com ruling could bring the ‘reregistration’ precedent into full alignment, specifically with the 9th Circuit ruling.
This case stinks so bad, and to see Prudential Insurance hijack this domain repels me on every level.
CS Watch says
The meaning of ‘registration’ circa ACPA enactment is verifiable within the ACPA’s congressional history.
Specifically, a fee is chargeable upon first “registration” and then a fee is chargeable for “maintainance” of that registration (renewal). ‘Registration and maintenance’ are not interchangeably used with other terms. (The terms ‘transfer’ and ‘sale’ are found throughout the comments solicited and summarized by Congress in 1997, but they are not found in the ACPA.):
“Testimony of Larry Irving
Assistant Secretary of Commerce for
Communications and Information
before the House Committee on Science
Subcommittee on Basic Research
September 25, 1997
As of September 1995, NSF permitted NSI to institute user fees for registration and maintenance of domain names.”
“[This is an extract from a longer document entitled “US Government
Information Policy” which was sponsored by the Office of the Assistant
Secretary of Defense (Command, Control, Communications and Intelligence).]
US Government Information Policy
Hal R. Varian
University of California, Berkeley
July 30, 1997
Private sector initiatives are greatly enhanced if property rights are clearly determined. Tragedies of the commons, congestion, and other externalities can be mitigated if property rights are clearly specified and enforced.
Example: For Internet infrastructure, it is important to clearly define and assign property rights to domain names, both to encourage users to invest in and promote specific addresses, and to prevent costly legal disputes over ownership.
Right of contract.
Property rights are important, but the right to negotiate away from the default assignment of rights is also of major importance. Voluntary negotiation among individuals with explicit default rules is an excellent way to discover mutual improvements to the default property assignments. In markets for information a great variety of contractual forms may be needed to achieve legitimate business objectives. Only rarely should government restrict the right of contract, e.g., by making certain rights inalienable. Default rights should generally be set to minimize the transactions costs of negotiating away from these defaults.
The Domain Name System (DNS) links up “domain names” such asinfo.sims.berkeley.edu with IP addresses such as 220.127.116.11. The purpose of this system is to allow users to refer to use meaningful names when referencing Internet sites rather than difficult-to-remember lists of digits. Originally domain names were assigned on a first-come-first-served basis by the Internet Network Information Center (InterNIC) at no cost. By the mid-90s, the size of this task had become quite larger and the InterNIC was allowed to charge a fee to register and maintain names.”
CS Watch says
*terms ‘transfer’ and ‘sale’ not found as ‘Registration.’
This is equivalent to someone putting a lien on your house without your knowledge or permission.
CS Watch says
Judge T.S. Ellis was pwned by Prudential, and 4th Circuit Appeals didn’t have the juice to correct him. There is not a single company on the Forbes big tech list in a jurisdiction where the reg date is *not* the creation date. Gawsh, why is that?
Well, for one thing, it would run counter to a century of US trademark and antitrust law, but for another thing, it’s because there are eight BILLION *other* buyers for prestigious .coms and most are outside of this country, you culture war clucks. Businesses in 4th Circuit states are now blackballed from acquiring the names they need to compete. Good luck with http://www.virginia-squirrelmeat.xyz.
Jennifer from SSN - original domain owner says
Details of this case ascertained the fact that we have disbursed a sum of one hundred thousand US dollars ($100,000) for the acquisition of the domain name. Prudential, however, endeavored to procure this high-value three-letter domain name for fifty thousand US dollars ($50,000), through a front company, evincing their malevolent intent. Given the eight aforementioned questions, one can contemplate that this judgment has opened a Pandora’s box, allowing US conglomerates and US judiciary to unlawfully expropriate high-value domain names from foreign entities. Any large US corporation that possess a US trademark can seize high-value domain names held by companies from other countries through US courts and the repository for US “.com” domains. The United States is known as a common law country, and we can see that this result will exert a huge impact on the global domain name industry.
SSN expended a hundred thousand dollars to procure the domain name. However, the ensuing legal dispute incurred several hundred thousand, greatly surpassing the domain’s worth. Our objective is solely to uphold justice, which is a universally cherished value. Regrettably, through this lawsuit, we have witnessed how the US legal system can be unfair, and allowed rich conglomerates to act with impunity, while smaller companies and average-income Americans are stifled by the exorbitant legal fees. The impact of this case will be profound, and those with even a modicum of legal acumen and a sense of justice can discern where the rightfulness lies. Prudential operates in the insurance sector and relies on integrity as its bedrock. Nevertheless, it has resorted to unscrupulous tactics to seize a domain name. In light of this, how can it guarantee the interests of their clients? As the Chinese insurance industry is currently preparing to open up completely to the world, Prudential’s shortsightedness will undoubtedly be celebrated by their Chinese competitors, because the Chinese people will prefer dependable insurers over those with a disreputable image. Fairness and justice are the most important values, and in pursuit of them, we will persevere in our struggle. Although losses have incurred to us, it is certain that we will not be the party which will suffer the most in the end.
Jennifer from SSN - original domain owner says
We are a technology company headquartered in Shenzhen, China, that specializes in financial and economic information. In 2017, we obtained the domain name PRU.com through the SEDO website for a sum of one hundred thousand US dollars ($100,000). Our selection of this domain name was clear, as PRU is an English acronym for Prussia, and we aspired to instill our team with Prussian ideals. During the period between 2018 and 2020, we actively developed our project named “普鲁士pru.com”, which we presented to the court with ample software development evidence.
In 2020, GoDaddy notified us by email that another party expressed an interest in purchasing the PRU domain name. Despite this, we did not respond to the email. Subsequently, as we were preparing to resolve the domain name to our website, we discovered that GoDaddy had frozen the domain name due to its alleged involvement in WIPO, according to GoDaddy. We retained the services of Chinese legal counsel to defend our position, supported by our comprehensive and irrefutable evidence. However, as WIPO prepared to make a decision, the counsel for Prudential, the US-based insurer, announced their intention to litigate in the United States, leading to the suspension of WIPO proceeding. As a result, subsequent legal proceedings concerning the PRU domain name unfolded as publicly known.
Jennifer from SSN - original domain owner says
We hereby raise the following inquiries with respect to the proceeding:
1. Prudential has no commercial presence or reputation in China, nor is it a globally renowned corporation like Google or Microsoft, as a China company, we are perplexed as to why a US judge would presume our familiarity with Prudential, particularly when the average Chinese citizen remain unaware of the company’s existence, in the same manner that average Americans are ignorant of Chinese insurance firms.
2. We question why the US court would admit indirect evidence from a third-party domain broker at GoDaddy, without requiring Prudential to furnish direct evidence of their alleged offer to purchase the domain name, given that such a practice enables companies to manufacture such evidence and may result in the admission of false or erroneous testimony.
3. We are perplexed by the US court’s acceptance of Prudential’s falsified evidence of our purported involvement in malicious domain name trading. The parked page for PRU.COM was a GoDaddy’s automatically generated ad page, which shows a normal domain parking page when visited in China but an ad page for GoDaddy when visited in the U.S, a fact that anyone with a basic domain knowledge could confirm that what the website shows is not the domain owner’s setting, but GoDaddy’s auto setting. Consequently, the assertion that we intended to engage in nefarious domain name trading is spurious and unsubstantiated. We wonder why the US court would accept such fabricated evidence when Prudential was aware of the truth of the matter.
4.SSN is, unequivocally, not a domain name speculator, and asserts that it is a company that specializes in financial information and has no history of engaging in domain name sales. Despite this, the US judge still seems to have concluded that our company had a malicious intent to sell the domain name.
5.It is important to recognize that trademark rights are jurisdictional in nature. Therefore, it is arguable that a US trademark claim should interfere with the legitimate domain name of a Chinese company. Such interference could be perceived as an extraterritorial application of US law and a breach of international intellectual property law.
6.We have been in possession of the Chinese trademark for pru.com since 2022, and we wonder why the said trademark has been invalidated in the proceeding?
7.It is to our understanding that there exist 45 classes of trademarks, and assuming that another US company holds the trademark for PRU in a different class, how would the judge weigh the facts and evidence presented by both parties to determine the rightful owner of the domain name, had such a situation arises? Similarly, if a company in another country holds a pru trademark earlier than Prudential Financial, to which company should the US judge award the domain name?
8.What about pru.org? Does this mean that pru.org should also be awarded to Prudential? Does a single US trademark grant ownership of all domain names with the same name but different suffixes?