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OnlineNIC says it’s shutting down because of Facebook lawsuit

by — Domain Registrars 11 Comments

Registrar tells court it is ceasing business next week.

Image of Facebook with the words "Facebook Lawsuit" superimposed

ICANN-accredited domain name registrar OnlineNIC says it’s shutting down on July 26 after throwing in the towel in a lawsuit.

[See update, including new shutdown date.]

Facebook sued the registrar and its privacy service in October 2019, alleging that either OnlineNIC or its customers used domains such as www-facebook-login(.)com and login-lnstargram(.)com.

The social media company recently filed an unopposed motion for default judgment in the case. OnlineNIC told the court that it doesn’t have the funds to continue defending the case and will cease doing business on July 26, subject to any ICANN requirements.

Attorneys for Facebook say that OnlineNIC is trying to avoid paying the judgment. Its attorneys also filed for a Temporary Restraining Order (pdf), alleging that OnlineNIC is transferring some of its domain name assets (pdf) to another registrar. (When I looked up the same domains Wednesday evening, they showed they are now locked and not pending transfer.)

According to the most recent Verisign report filed with ICANN, OnlineNIC has many domains under management. It had over 500,000 .com domains at the end of March. It’s not clear how many of these are customers’ domains.

Update: on July 22, attorneys for OnlineNIC said they intend to fight the TRO. It said it indeed was transferring some domains to Ename, but with a goal of selling them to help pay the fees it owes the Special Master in the case. The attorney also mentioned a previous plan it had proffered to Facebook that would allow the company to be sold as a going concern to generate cash to settle the judgment. You can read OnlineNIC’s response here (pdf).

Why a company might file a lawsuit instead of a UDRP

by — Policy & Law 0 Comments

Sites causing imminent harm can sometimes be taken down faster through the courts.

An image of justice with scales and the words "lawsuits"

The Uniform Domain Name Dispute Resolution Policy (UDRP) was created as a faster, easier, and cheaper alternative to lawsuits to settle cybersquatting claims. For a filing fee of under $2,000 plus legal time, trademark holders can win the transfer of domains that cybersquat their brands.

But there are cases when it makes sense for a company to go straight to the courts rather than UDRP. One example is when a domain is causing so much harm that the trademark holder needs to get it taken down even faster through a temporary restraining order (TRO).

That’s the case with a lawsuit (pdf) KeyState Holdings, LLC filed this week in U.S. District Court in Arizona.

The company wants to take down the website at KeyStateHoldings[.]com. According to the suit, the site once offered solar tax credit services, which is something the Plaintiff offers. When I visited today, the site offers cryptocurrency services.

According to the suit, the address and corporate registration information at the bottom of the site are that of the plaintiff.

The site was registered in 2019, but KeyState apparently became aware of it when someone walked into KeyState’s offices a couple of weeks ago and showed that he had lost $231,000 through the website.

The judge has set the oral argument for the TRO for July 20. Assuming the judge finds in the Plaintiff’s favor, this will take down the site much faster than a UDRP.

Lawsuit alleges 509.com, sold for $106k in March, was stolen

by — Policy & Law 2 Comments

Chinese man who paid $295,000 says domain is stolen.

Picture of gavel with the words "lawsuit"

A domain name investor acquired 509.com through Sedo in March for $106,000. According to NameBio, the domain sold for $295,000 in 2018. Why did the domain seller take such a loss? There appears to be more to the story.

A Chinese man has come forward saying he’s the rightful owner of the domain name, and it was stolen from his GoDaddy Account.

Yin Sheng filed an in rem lawsuit (pdf) against the domain name in U.S. District Court on Friday. He says that he’s owned the domain since 2018 and alleges it was unwittingly taken from his account in March. That coincides with the six-figure sale on Sedo.

In the lawsuit, he states that upon investigation, there were suspicious logins to his account from Hong Kong starting in February.

It will be interesting to see if they can track down where the funds were sent upon the sale in March.

War IP Law PLLC is representing the plaintiff.

Right of the Dot responds in Bird.com dispute

by — Policy & Law 6 Comments

Auctioneer denies counterclaims in non-paying bidder dispute.

Right of the Dot has responded to David Lizmi’s affirmative defenses and counterclaims in a lawsuit stemming from its February 25 auction.

In that auction, Lizmi bid $2.5 million for bird.com and $1.6 million for fish.com but didn’t pay. As a result, Right of the Dot and the owner of the domains sued Lizmi.

Lizmi responded to the lawsuit and countersued. His main arguments seem to be that he wasn’t authorized to bid more than $2,000 in the auction and that he received outbid notices on the domains, so he thought he hadn’t won.

Last week, Right of the Dot filed its response (pdf) to Lizmi’s defenses and counterclaims. The response denies the claims and adds a bit more color.

According to Right of the Dot’s response, “The terms and conditions to which Lizmi agreed in order to participate in the auction state that the auctioneer’s decision and hammer price supersede any and all notices bidders receive during an auction.”

While I can’t find this specific term under such wording, bidding platform HiBid’s terms give wide latitude to the seller to determine the outcome of each auction.

Buying an expiring domain? Might want to check this

by — Expired Domains 3 Comments

The domain could already be subject to a UDRP.

logo for Solverde Casinos with a green background and image of a sun

A domain investor bought an expired domain that Solverde had already filed a UDRP against. The casino company won, and the domain buyer is suing to retain the domain.

Domain investors review a lot of data before buying expiring domain names. The more expensive the domain, the more data they check.

Sometimes I’ll Google the domain name to see how it’s used. I might even check a trademark database if the name seems like it might be a trademark. What I’ve never thought to do is see if the domain is subject to a current UDRP case.

After all, if a company decided to file a UDRP against a domain that was about to expire, wouldn’t they at least work with the registrar to make sure the renewal fee was paid?

Apparently not.

Turn Invest Group Ltd. bought SolVerde.com for $665 on NameJet in January after it expired. But the domain was already subject to a UDRP filed in November 2020. Despite being notified by the registrar of the pending expiration, neither World Intellectual Property Organization (WIPO) or the Complainant, casino company Solverde, S.A., apparently did anything about it.

So the domain expired and Turn Invest Group won a competitive auction.

According to the WIPO panel, the domain buyer should have searched to see if there was an active UDRP:

…The Respondent is a sophisticated domain name investor, and has been in this business since 2009.

Despite providing a detailed declaration, the Respondent did not provide any details of searches or due diligence the Respondent undertook prior to acquiring the disputed domain name at auction. A Google search of “SOLVERDE” conducted by the Panel resulted in many search results for the Complainant on the first page of the search results. Moreover, if the Respondent had searched the UDRP SEARCH database at “www.udrpsearch.com”, the Respondent would have seen that the disputed domain name was subject to an “active case”…

OK, I can buy searching Google to see if these two Spanish dictionary words are a well-known trademark used exclusively by one company. But checking for a UDRP?

The panel found in favor of Solverde, S.A.. Now, Turn Invest Group is suing to block the transfer.

The company filed a lawsuit (pdf) in U.S. District Court in Florida yesterday. It’s asking the court for declaratory relief that ownership of the domain is not infringing on Solverde S.A.’s trademarks and a finding of reverse domain name hijacking.

Howard Neu is local counsel for the plaintiff.

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