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KeyState Holdings plays whac-a-mole with fraudsters’ domains

by — Policy & Law 3 Comments

After taking down one fraudulent site, financial firm goes after another.

Picture of a whac-a-mole carnival game with two hammers and multiple holes

Key Holdings took down one website, only for fraudsters to use another similar domain.

Financial services firm KeyState Holdings, LLC has filed a second lawsuit to take down a domain name that fraudsters are using to dupe people into sending money.

In July, the firm filed a lawsuit and requested a temporary restraining order (TRO) against KeyStateHoldings(.)com after a KeyState customer told it that it lost $231,000 through a fraud perpetrated on the site. The judge granted the TRO.

Now, KeyState has filed an in rem lawsuit (pdf) against the domain KeyState(.)holdings, which the company says is perpetrating a similar fraud. Similar to the first case, the fraudster copied the “real” KeyState’s physical address and Nevada IDs and included them on the fake website.

KeyState says a defrauded consumer contacted it on September 1, saying he had lost $1,000 through the fake site. Someone contacted this consumer via Telegram to get him to invest money and apparently pretended to be both KeyState and cryptocurrency company Coinbase.

The real KeyState Holdings uses the domain Key-State.com.

Man appeals after court orders Pru.com transferred

by — Policy & Law 10 Comments

The former owner of Pru.com has appealed after a court determined that he was cybersquatting on Pru.com.

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

A man in China has appealed a summary judgment ruling that forced him to transfer the domain Pru.com to the insurance and financial company Prudential.

Frank Zhang, a Chinese citizen, said he bought the domain from a Texas company in 2017 for about $100,000.

Prudential filed an in rem anti-cybersquatting and trademark infringement case against Pru.com last year. The company has trademarks for pru.

At the end of June, the judge found in favor (pdf) of Prudential’s request for summary judgment on the issue of cybersquatting. The domain was subsequently transferred to Prudential.

The judge found that the facts favored Prudential on all nine of the factors in the Anticybersquatting Consumer Protection Act (ACPA).

While there was certainly some evidence against Zhang, GoDaddy’s default landing page also hurt. The judge pointed to links on the landing page pointing to Prudential’s competitors and a message asking people, “Would you like to buy this domain name?”.

The links were default pay-per-click links that GoDaddy profits from, but the judge said he had the option to have them removed. And the “buy this domain?” link is a promo for GoDaddy’s domain buying service.

Making matters worse, the links didn’t show to visitors in China, so it would have been difficult for Zhang to know about them.

The case was appealed to the Court of Appeals for the Fourth Circuit.

USA sues to get GIBill.com domain name back after letting it expire

by — Expired Domains 1 Comment

Oops. U. S. Gov forgets to renew domain it won in a settlement, so now it has to sue to get it back.

A picture of the flag of the United States with the words "G.I.Bill"

The United States of America has filed an in rem cybersquatting lawsuit (pdf) against GIBill.com in an effort to recover the domain name.

The government obtained the domain name from affiliate marketing company QuinStreet in 2011 in a deal struck by the Kentucky Attorney General’s office.

But someone forgot to renew the domain name. It expired last year and sold on DropCatch.com for $4,000. As Elliot Silver points out in that article, GIBill.com remained in QuinStreet’s name well after the settlement.

In the new lawsuit, the government says it sent multiple cease & desist letters but has not been able to identify the owner of the domain due to Whois privacy. It says the owner switched registrars after the government sent one of the letters.

Hopefully, this time the government will remember to renew the domain name.

Stands4 sues Dan.com over Calculator.com transaction

by — Policy & Law 10 Comments

Company that bought a stolen domain name sues Dan.com and John Doe thief.

Screenshot of Calculator.com

A publisher is suing Dan.com after it paid $180,000 for a stolen domain name using Dan.com.

Stands4 paid $180,000 last year to acquire Calculator.com. It then spent $50,000 developing it, adding to its portfolio of sites including Grammar.com, Lyrics.com, and Scripts.com. (The current version of the site is pictured above.)

Shortly after publishing a new site on the domain name, Stands4 was sued in Florida court by Chloe Alston, who said she was the rightful owner and had not sold the domain. After looking at the evidence, Stands4 decided not to contest that she was the domain owner and that the person who sold the domain as Chloe was not actually Chloe.

This was the second time a thief tried to sell the domain. A previous attempt on Sedo was scuttled after the buyer questioned who was selling the domain. Surprisingly, after the first time, the domain was not fully locked down and apparently, the thief still had control.

Now, Stands4 is suing (pdf) DAN.com and the John Doe domain thief.

According to the lawsuit, Dan.com has a policy of not listing domains for sale that have active websites. It alleges that the company made an exception after the seller provided a screenshot of the domain in their Network Solutions account.

In its suit, Stands4 points to several representations on Dan.com’s website about its services, as well as emails from Dan.com employees during the transaction.

Stands4 also alleges that Dan.com paid the thief in bitcoin, making it impossible to recover the funds and difficult to identify the thief.

Stands4 is suing Dan.com for fraudulent misrepresentation, negligence, and unjust enrichment. It is asking for not only its original $180,000 back, but treble damages in an additional amount of $360,000, attorneys fees, and punitive damages.

Dan.com provided this statement in response to the lawsuit:

On February 24, 2021, we received a draft complaint from Stands4 LTD which contained a threat that they’d file this frivolous case if we didn’t settle with them. This lawsuit has simply one purpose only and that’s to attempt to shine a negative light on our company. They know that the case will be dismissed by the chosen US court because the company that instructed us (and paid for the domain) is based in Israel and our TOS dictates that in this case, this dispute should be settled in a Dutch courthouse.

On May 27th, 2020, Stands4 LTD in their own complaint indicates to have contacted the domain seller themselves via WHOIS, negotiated a sale price, and then they instructed our company to handle the domain ownership transfer between the two parties. Our team, spent a couple of days researching the domain and requested additional proof of ownership and representation (KYC) before we proceeded with the transaction. Seven days after the initial offer of the buyer; On June 17, 2020, 09:23 we received the payment for the domain and on the same day June 17, 2020, 17:59 we delivered the domain to the buyer. Weeks later, issues started to appear when the domain was locked by Godaddy. Our first reaction was to provide Stands4 LTD with everything we had on file and Godaddy then unlocked the domain for Stands4 LTD after reviewing the transaction documents. The painful irony, in this case, is that all “evidence” that they use in their lawsuit against us, they actually received from us when we were trying to assist them with literally everything we had. This has been the primary reason why we refused to engage in any settlement discussions with them.

Our domain ownership transfer process has proven its mark in the past 8 years. It has helped us handle close to 80,000 successful domain ownership transfers. However, this is an extremely unfortunate edge case.

We’re already working on an industry-wide solution to prevent stolen domains to be traded on marketplaces or distribution networks. It’s an API approach where we maintain a shared database of stolen domains and automatically prevent transactions before they can occur. However, even, when that system is in place, this transaction wouldn’t have been prevented because the “hacker” in question has had access to the domain via a prior hack for months and the domain was never reported as stolen before the lawsuit.

In conclusion: It’s unfortunate that Stands4 LTD makes numerous false and misleading allegations against us. We dispute each and every claim that Stands4 LTD makes, and specifically deny all allegations in the complaint. We’re confident that the facts, in this case, are on our side. And that’s all that counts in the end.

The stolen domain database sounds like a great idea. In this case, I’m not sure that anything was public about prior thwarted attempts to sell Calculator.com. It would be helpful to all marketplaces to share this data.

Former France.com owner continues fight

by — Policy & Law 21 Comments

Man who lost domain name to France files petition for en banc rehearing.

Picture of Eiffel Tour in France

Jean-Noël Frydman isn’t done fighting to regain control of France.com, a domain name he registered in 1994.

Frydman lost control of the domain name in 2018 after the French government presented a Paris Court of Appeals decision to Web.com, and Web.com transferred the domain to France.

The French Republic asserted the exclusive right to use the term “France” commercially, contending that under French law, the name “France” cannot be appropriated or used commercially by a private enterprise because doing so violates the French Republic’s exclusive right to its name and infringes on its sovereignty.

Frydman sued, but successive U.S. courts have delivered blows to his pursuit of getting the domain back. In a recent U.S. Court of Appeals decision, the court agreed that the French government has sovereign immunity under the Foreign Sovereign Immunities Act.

Now, Frydman has petitioned the appeals court for en banc rehearing. An en banc rehearing in appeals court is when the full court considers the case (rather than the three-judge panel) because the decision conflicts with other decisions by that court or a Supreme Court decision. [Update: the court rejected the request for rehearing.]

The new filing (pdf) states:

The Panel’s opinion conflicts with controlling authority and authoritative decisions in other Circuits and raises questions of exceptional importance regarding (1) United States citizens’ ability to enforce trademark rights against foreign sovereigns within the United States, (2) the supremacy of United States law, (3) the role of United States Courts in protecting United States-based property and property rights, and (4) the enforceability of United States intellectual property rights.

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