Appeals court confirms domain owner wasn’t cybersquatting with his purchase of TRX.com.
The Ninth Circuit Court of Appeals has affirmed a lower court’s ruling in a cybersquatting case involving TRX.com.
The lower court had ruled that the owner of TRX.com was not cybersquatting and awarded attorney’s fees as an exceptional case. That ruling will stand.
Loo Tze Ming bought the domain name trx.com for $138,000 in April 2022 at domain marketplace 4.cn.
In October 2022, Fitness Anywhere LLC, a company going through bankruptcy that claimed rights in TRX, filed a cybersquatting claim under UDRP. The following month, the panelist awarded the Complainant the domain name in a controversial decision.
Ming overlooked the dispute notice and didn’t respond, so he sued Fitness Anywhere in Arizona to stay the transfer. That case was stayed because Fitness Anywhere is in bankruptcy.
Then, in February 2023, a company called JFXD TRX ACQ LLC, which described Fitness Anywhere as its predecessor in interest, filed an in rem lawsuit against trx.com in Virginia, where the .com registry is based.
Given the ongoing suit in Arizona, it was odd that JFXD TRX filed an in rem suit against the domain name because it knew who the domain owner was and how to contact him.
Ming successfully petitioned the court to move the in rem case to Arizona, where he filed his original lawsuit.
Moving the case was key because Arizona is in the Ninth Circuit. There’s precedent in the Ninth Circuit that the original registration date of a domain is the relevant date for a case under the Anticybersquatting Consumer Protection Act (ACPA).
Trx.com was registered in 1999. The plaintiff got trademark rights in the second-level domain term TRX sometime after that, and then Ming bought the domain years after the trademark was established. However, according to the Ninth Circuit, because the original registration in 1999 predated the plaintiff’s trademark rights, the plaintiff couldn’t win.
The district judge found many discrepancies in JFXD TRX’s arguments, and found many of the filings unintelligible. (More details about those arguments and filings are here.) She ruled in favor of Ming, and ruled that JFXD TRX should pay about $40,000 in attorney’s fees.
JFXD TRX appealed to the Ninth Circuit Court of Appeals, asking it to review the lower court’s decision to dismiss the case for failure to state a claim, and to review the award of attorney’s fees
This month, the court affirmed (pdf) the lower court’s opinion. It ruled that only Ninth Circuit precedent applies, so JXFD had to show trademark rights dating to the original 1999 registration of the domain.
The appeals court also affirmed the award for attorney’s fees:
…The district court did not abuse its discretion in finding that this case was “exceptional.” … JFXD filed suit in the Virginia district court even though its attorney knew that Ming was already litigating in Arizona. Further, as the Arizona district court explained, “JFXD and its counsel were unable to present intelligible factual or legal arguments, leaving Ming and the [Arizona district court] to guess as to why JFXD believed its cybersquatting claim was viable.” Finally, JFXD ignored court orders, communicated with the court ex parte, and inexplicably shifted its position multiple times throughout the course of litigation. Because the district court properly granted Ming attorneys’ fees below, Appellees are entitled to attorneys’ fees on appeal.
Andrew, thank you for keeping the community to up to date on this case.
Big win for Domain investors in similar situations. The more precedents of this nature the better.
Since the France*com travesty of justice I’ve waited to see when the next domain case would reach the U.S. Supreme Court.
Will the hijacker appeal to the Supremes or stop while they are ahead?
In a brief, he said he plans to appeal to the Supreme Court. I think if the issue were just 9th circuit precedent vs. other precedent, it might be a more worthwhile case. But it’s more than that.
I think that it would be helpful if a TM attorney (other than I) could explain, in detail, how this convoluted case could help domainer with defensive arguments.
We’d all be eager to better understand how this decision establishes any useful precedent(s).
I don’t believe it sets any precedents. In fact, the Court of Appeals marked this as “Not for publication”, meaning it doesn’t have any thing in it that should be cited. Instead, it reaffirms current 9th circuit standing on the issues.
The useful part is “make sure you respond to the UDRP if you have a defense”. Two things went wrong with this case from the start. The first was that the domain registrant did not respond. Unfortunately, the UDRP is a somewhat arcane procedure which depends on people not using spam filters to eliminate emails from strangers with attachments, so sometimes domain registrants are not aware that they need to keep an eye on “spam” sent to their registrar contact email address. The second problem was that the panelist took the complaint at face value, and did not notice the asserted trademark registration was not owed by the complainant in the UDRP proceeding.
Beyond that, there was, as Andrew notes, nothing surprising about this 9th Circuit decision other than the fact that the TM claimant’s attorney wasn’t ordered to get a psych exam. His filings in at the District Court level were… unique.
The precedent I was referring to is another court case won by the Domainer owner. Not simply accepting a UDRP decision but fighting it in the Courts.
How many Domainers lose a domain and simply accept the decision?
The majority.
Since it is being appealed the Supreme Court who knows what kind of ruling could come out of those chambers, if the case is accepted.
The 9th Circuit made pretty short work of that looney-toon lawyer for TRX. Some of his filings read more like a cry for help of some kind – and not with the domain name.